Market Mad House

In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule. Friedrich Nietzsche


Is Consumer Data Really the Oil of the 21st Century?

At least two blockchain-based platforms intend to drill for “the oil of the 21st Century.” The modern-day black gold is personal or consumer data, and Opiria (PDATA), and Measurable Data (MDT) are designed to harvest it.

The idea is simple, big business needs your personal data; such as history and shopping history, for a wide variety of reasons. Those companies want to pay you for the data, and platforms like Measurable Data and Opiria want to facilitate the transaction.

Giant corporations like Daimler (ETR: DAI), Proctor & Gamble (NYSE: PG), BMW (ETR: BMW), and General Motors (NYSE: GM) are already buying such data from Opiria, the company’s co-founder and co CEO Dr. Christian Lange claimed. Lange estimated the size of the global data brokerage market at $250 billion a year and claimed it was growing at a rate of 30% annually.

The Oil of the 21st Century                                        

“You might have heard of the term that personal data is the oil of 21st Century,” Dr. Lange said at the Gibraltar International FinTech Forum 2018 in February 2018. “The reason for this is companies all around the world need that personal data. They really need it and today data brokers are making big money with our personal data.”

The German-based Opiria grew out of an early company of Lange’s called Ergoneers GmbH which collected data about drivers for the auto industry. Lange’s plan is to build a blockchain marketplace where Opiria will pay consumers for data in the ERC20 PDATA token and resale it to giant companies for fiat currency.

The data will be collected by devices like smartphones and traded through Opiria’s marketplace. Lange envisions monetizing all personal data including information from monitors like the Fitbit and search information. Consumers will participate because Opiria will pay them.

The money that can be made from such data mining is huge; an Opiria press release estimated the value of the average person’s data at $5,000 a year. An example of the use of that data would be Proctor & Gamble attempting to see how much Tide a typical consumer buys each year. More detailed data; like which varieties of Tide sell best, can help Proctor & Gamble make more money.

Are Opiria and PDTA a Good Investment?

Opiria is using the blockchain and Ethereum Smart Contracts in order to comply with the General Data Protection Regulation (GDPR), Lange admitted. The GDPR is a European Union law that regulates how personal data can be collected and stored. Among other things, it mandates strict security and high levels of encryption of the kind offered by the blockchain.

This will obviously make many investors skeptical of PDTA because Opiria is simply using it as a tool for regulatory compliance. Opiria did raise around $2 million with through a presale of the PDTA tokens, a press release indicates.

Opiria is currently selling around 450 million PDTA tokens for 10¢ each in an attempt to raise around $30 million in an initial cryptocurrency offering (ICO). Interest in Opiria has been high but it is unclear if the interest involves the tokens or the data mining efforts. The Opiria & PDATA Telegram Community had 14,568 users on 7 April 2018.

Is Personal Data a Good Investment?

It is not clear if Opiria and PDTA are a good investment but there is another blockchain platform with a very similar business plan: Measurable Data (MDT).

Like Opiria, Measurable Data plans to pay consumers for data in its MDT token and sell the data through a blockchain-based marketplace. The MDT token is actually designed as “a decentralized data exchange ecosystem connecting users, data providers, and data buyers and denominates the value of data.”

The question investors should ask is this data really as valuable as oil? Not according to Coinmarketcap. That website had the ERC20 (Ethereum-based) MDT Token a Coin Price of .08¢ (0.0001 ETH) on May 10, 2018, or slightly more than the ICO price for PDTA.

The MDT Token did have a Market Capitalization of $23.876 million (31,372 ETH) and a Market Volume of $1.499 million (1.97-million ETH) on May 10, 2018. So there is some market interest in this concept.

The MDT is not a bad cryptocurrency. It is part of the Bancor Network’s (BNT), liquidity network. That means it can be easily converted into Bancor and sold for Ethereum.

Unfortunately, Measurable Data’s platform is not available yet, it is not scheduled to begin testing until July 2018. Unlike Opiria, Measurable Data does not appear to have an app for the Android and Apple IOS available yet. Opiria’s app is available but it only allows users to participate in surveys.

This means investors in both MDT and PDTA are buying into a concept and a business plan, not a product. Both products have a lot of potential value, but it has not been realized yet.

How much is Personal Data Really Worth?

Personal Data is worth a lot of money, but nobody knows exactly how much. A Medium post by Wibson gave a figure of $240 a year per person; which is good, but at odds with Opiria’s estimate of $5,000 a year.

Wibson’s estimate is only based on advertising data, rather than specific information collected by companies. Estimates for Big Data are a little lower; its value was estimated at $125 billion in 2015 by Forbes.

Statista forecast big data revenue and business analytics revenues at $42 billion for 2018; those revenues are expected to grow to $49 billion in 2019, $56 billion in 2020 and $103 billion in 2027. It is not clear how much of those revenues are personal data, but a large chunk of it clearly is. Data is definitely a valuable commodity in today’s world; Lange’s personal data is oil remark is more realistic than you might think.

The potential profit from data is vast, 50¢ invested in Big Data had a return of $3.50; or a seven increase in three to five years, Syncsort estimated. That indicates Measurable Data and Opiria might receive a seven-fold increase on their investment.

Unfortunately, there’s guarantee that increase would be reflected in the Coin Price of MDT or PDTA. Something to remember is that those companies will make their money by selling data to big business in fiat currency. Much of what they earn will undoubtedly have to be returned to the individuals that provide the data in the form of reward points.

Despite that, the concept is potentially a lucrative one. If I were to buy a token right now I’d purchase PDTA because Opiria has big corporations for customers and a management with a proven track of selling data to large corporations.

I would wait on buying these tokens until at least one of the companies behind them has a working exchange that is actually paying real consumers for data up and running. A good way to find out when this is happening is to sign up for Opiria and Measurable Data’s apps when they come out. Then use them to see if they work and really pay like their creators claim.

Personal Data is a very valuable commodity in today’s world. Unfortunately, the theory that it can be monetized through the blockchain is unproven. A good method for tapping and selling the oil of the 21st Century has not been demonstrated yet.