A relatively new form of currency is being used on a daily basis by nearly 3.5 billion people world wide. No, this is not another article on cryptocurrencies, although it would be nice if they had that large of a user base. Do you think you might know what currency is being referred to in the first sentence? To be fair, most people are not familiar with this currency, even though they use it on a daily basis.
Rather than outright telling you the name of this currency, it would be most beneficial for your understanding of it to try and answer a riddle. How can large and small tech companies alike, produce expensive, culturally relevant, tech services for the world to use, while offering them for free or at reduced costs, and still expect to be highly profitable? This is quite the capitalistic conundrum!
Believe it or not, you utilize the answer to this riddle nearly every time you click, type, or talk into any devices connected to the Web. These actions create trails of data linked to you. In essence, every time you click, type, or talk into the Web, you are sharing your personal data. Some of this data you voluntarily share and identifies you formally such as name, date of birth, address, etc. There are other types of data you don’t intend to share, some highlighting your personal tastes, others detailing your daily habits and routines.
All of this personal data speaks to who you are as an individual on nearly every level and is very valuable to the tech industry. It is because of this value that our personal data acts as a form of currency, what I will refer to as Personal Data Currency (PDC). This now brings us to the answer to our riddle; the 3.5 billion people in the world using the Web pay for the free services, or those offered at a reduced cost with their PDC. I emphasize again that our personal data is a form of currency, because you cannot participate in the Web, or anything connected to the Web, unless you share your personal data, thus giving you access to the Web.
Unfortunately, knowing this fact won’t allow you to rush off after reading this article and buy yourself a new car using your PDC. It must first be converted into Fiat Currency (government backed currency such as the US dollar). The companies that have been paid in PDC use data mining techniques to extract patterns and knowledge from data sets. This is where your data is stored after being collected. The patterns and knowledge extracted from data sets results in actionable information, which then is sold to third parties for fiat currency. Therefore, data mining acts as a currency exchange, converting PDC into Fiat.
Here is one simple and brief example of how this industry works. In essence, Google and Facebook are really advertisement companies. They collect, mine, and sell your data for huge profits to third parties which act upon that data, hence “actionable information,” by placing specific products on your viewing screen that highly correlate to your interests and tastes. Google and Facebook’s tech products are designed to gather as much information about you as possible. The products they offer, that collect your data, are highly profitable, culturally relevant, and free to use. And you can’t participate in them unless you share.
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