The Human Stock Market
Replace “Human Being” with “Data Packet”. You may well have heard the oft used phrase that ‘data is now as valuable as Gold’. The question is how and if so, where is this heading? We will come on to that a little later, but for now it would be useful to familiarize ourselves with some other key issues in the world of human data first. We have already written about the problem, and what will likely be, the increasing problem of Bio Spoofing or Bio Leaks. In short, this is the stealing of a person’s biological identity in order to gain illegal access to money, data, facilities etc. The most well-known forms are recognition systems which use retinal imagery, facial or fingerprint identity, and perhaps fewer known sources such as your veins, heartbeat speeds and the DNA from your blood. All these systems are currently either being used or are in the testing stage. The “Spoofer” is simply a person who will try to pass themselves off as you in order to assume your identity for various reason. Bio spoofing is a term which refers to slightly more specific forms of identity theft. In our opinion there are only a very few, select forms of identity recognitions systems which can provide high levels of security, and this will be covered another time. Put simply however, fingerprint, retinal imagery, voice and even blood identity recognition systems are vulnerable to some degree because ultimately, they are easy to steal. It sounds crude but chopping off a finger or forcing someone to use ‘it’ or even an eyeball is not particularly demanding. Although maybe not as common as some sci-fi films would have us believe. Possible, nonetheless. Our article on “Blood Leaks” also highlights the vulnerability there. The point of mentioning this, at this stage, is to highlight how data (personal information) security is not only important, it may well define the quality of data sold on the open market at some point. To continue the Gold analogy, or indeed any other precious metal or substance, the value can be determined by grading it, which in turn is dependent on quality. So, as Data becomes a tradable commodity, so will the methods used for grading its quality, hence its price. Almost everything that is tradeable, has to have a value attributed to it. Even in the traditional sense where stocks and shares are traded on the various stock markets. Their medium to longer term value is, in the main, determined by what they refer to as “fundamental analysis”. A process of analyzing a company by looking at its accounts, management, profit and trading forecasts and other factors. In doing so, the company is given a fair price, often calculated on its earnings, and called a yield which in turn has a ‘multiple’, allowing a level comparison against its peers. Pretty mundane stuff maybe, but it is how systems have worked for centuries and therefore, it is highly likely it will continue to do so in the future. So, in the new cyber world, the tradeable commodity will be you. Or more precisely your data. Who knows, maybe after the trading of your data becomes regulated or legalized, we will find analysts in some form who specialize in valuing niche areas of that market. For example, the NASDAQ is a US market trading stocks in Technology only companies. What if we have a “UKYME” or a UK Youth Market Exchange? Let the imagination run wild if you like, but the concept is there. A tradeable market in data focused on ages 16-24 for example. There might be a Car Market or even the development of another form of “off exchange” transaction like Bitcoin which will attract illegal trading of data through 100% anonymous Blockchain (they should have cracked it by then).
So, these are just ideas of what may or may not happen. Some however are really almost there already. We only have to look at what has been in the press on the last few years with controversies surrounding Cambridge Analytica, and general fears over privacy brought to our attention by Messrs. Snowden and Assange. Looking at how things stand now however, one can already map out good quality or bad quality data based on the various commonly used sources such from the FANG consortium (Facebook Amazon Netflix Google). OK throw in Instagram, Twitter and YouTube for a better acronym (answers on a postcard please). By constructing a detailed map of personal data flow, it is fairly easy to attribute value to the quality of the data, or in these cases, the quality of the algorithms. So, as well as seeing the stocks of Google and Facebook trading on the exchanges, we could easily see their data traded (spun off) separately. When it comes to the illegal market for trading the commodity of privacy then, in the same way to how heroin might be graded, the ‘cut’ of the data will be valued too (as well as demand and supply of course). Will we have Data Quality Certificates in the near future? It might seem unlikely because it would depend on acceptance by the public that this is ok. In reality that is the easy part. One only needs to look at the re-legalization of alcohol after prohibition or marijuana in Europe and some US states. Liberalization is such that it will sit well alongside the factual arguments for legalization and regulation. Once people accept that having their data traded underground is bad for them and society, it will be an easy sell to have them accept regulated data selling. It is after all already happening anyway. It is just that the conglomerates and governments have to be discreet and more covert in doing so. That will not continue for much longer. There is one simply reason why exchanging private data will never stay private and remain a process carried out behind closed doors…. that reason is money flow! It is generally how nearly all markets of some description, over time, have started out. By commoditizing data, giving it a grade, and therefore a price, market forces will determine fair values. It will create a new source of liquidity that will be of use to all…especiallythe intelligence agencies. We all know the best lies are the ones that are nearly all based on truth….so credibility is the intelligence agencies (and therefore the criminals) best friend.
We have produced a comprehensive report on the methods for valuing data for the purposes of sale titled "The prospect of a Human Stock Market - Valuations and Market Practice".. For a free copy of the report please click here.