VC and EigenLayer Founder Debate Heatedly on "Data Ownership"
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VC and EigenLayer Founder Debate Heatedly on "Data Ownership"
Is "Web3 Data Ownership" a False Proposition? Here's How a Multicoin Partner and an EigenLayer Co-Founder See It.
Navigating Web3 tides with focused insightsCompiled by: Alex Liu, Foresight News
Kyle Samani, Partner at Multicoin:
I once believed in "owning your data," but I no longer do.
"Ownership" is really about "exclusivity." This is clearest when it comes to assets:
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a) I have a $5 bill, and you don’t. Therefore, I can spend that $5, and you cannot.
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b) I own a piece of art worth $1 million. I won’t lend it to a museum for others to enjoy; instead, I hang it on my wall to please myself.
Ownership — i.e., exclusivity — is why cryptocurrencies are tightly linked with finance.
Now let’s consider what it means to “own your data.” Frankly, I don’t know what that means. Advocates of data ownership often accuse big tech companies of holding our data and manipulating us through targeted ads. I disagree with this view.
Running services like Facebook or Google is expensive. They need to make money. The vast majority of people are unwilling to pay for
1) the ability to speak
2) the ability to read what others say
So if you want to build a *mass-market* service, you need advertising. And to run effective ads, you naturally need content targeting.
Proponents of data ownership might counter: “The problem is you can’t actively choose different algorithms. Each major platform offers only one algorithm, and they keep changing it.”
This criticism has merit. But this isn’t an argument for “owning your data”; rather, it’s an argument for either
1) legislating to force platforms to make algorithms public/flexible/bring-your-own (X has taken a first step here by open-sourcing its algorithm, but it’s not enough)
2) keeping data open so third parties can choose to access it
I’m not the first to suggest this solution. @albertwenger has written about this in his excellent blog Continuations.
I think it’s far more likely that legislation will force big tech to offer algorithm choice (similar to how you choose a browser on Windows) than it is to expect new networks based on shared, open data—which require many developers—to take off, given how strong existing network effects are. But even if I’m wrong and the Farcaster model does achieve “escape velocity,” the crucial property isn’t “owning your data,” but enabling third-party developers to build on top of it.
You could argue this distinction isn’t real—that to enable third-party developers, you must own your data. I agree, technically speaking, that’s correct. But that misses the point. The important part isn’t “ownership.” The important part is third-party access (which, as noted, can already be achieved under the current model via legislation).
This isn’t to say there’s no such thing as sensitive data. Clearly, financial and medical data are sensitive. There are already clear standards today for exporting electronic health record data to patients so they can possess a copy.
Saying you should “own your data” sounds important, but when you dig deeper, you realize the concept doesn’t actually make sense. You can only own things that are naturally excludable. Data can always be infinitely copied. Assets are scarce.
Alright, rant over. Bring on the rebuttals, everyone.
Sreeram Kannan, Founder of EigenLayer, responds:
Owning data means you have “property rights” over the data:
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1) Others cannot use it without your permission (i.e., security), and
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2) You can use it at any time without needing anyone else’s permission (i.e., liveness).
Ideas, software, and media can be infinitely copied, yet we have intellectual property to protect creators’ rights. Data rights are similar.
All viable business models, including advertising-based ones, can be built upon data rights.
Why do we need data property rights? Market economies transform things without property rights into things with property rights. The issue isn’t whether data property rights can exist—enterprises already have strong data property rights, while individuals effectively have none. Cryptography emerged to ensure individuals can claim data property rights by reducing enforcement costs.
Kyle Samani responds:
You’re being way too generous calling things like tweets “intellectual property.” You can delude yourself into calling them whatever you want, but they’re worthless.
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