Originally published in Portuguese by Projeto Draft.
Saying that “data is the new oil” has become a widely accepted truth, repeated so often that few question it anymore.
But how much is all that digital information companies collect about us truly worth? And why doesn’t the user – you – receive any monetary benefit from it?
These questions have long occupied André Vellozo’s mind. Originally from São Paulo and now based in the United States for over a decade, the entrepreneur is the CEO of DrumWave, a company founded in 2015 in Palo Alto, California – one of the core cities of Silicon Valley.
DrumWave focuses on refining the tools of the so-called Data Monetization Ecosystem, a type of digital marketplace designed to empower individuals with the tools and security needed to organize, authenticate, and commercialize their data with third parties.
Today, DrumWave’s flagship product in development is the dWallet app, a digital wallet that enables users to manage their personal data. Developed in partnership with IBM, the app certifies users’ data and assigns value to it. The concept is to create a data savings account that users can leverage as a means of payment for goods and services.
In an interview with Draft, André discusses the dynamics, challenges, and future of this market, expresses skepticism about cryptocurrencies, praises Brazil’s pioneering role in establishing a legislative framework for data ownership, and shares his belief that a new data economy can help reduce social inequality.
What is a data savings account?
Your data is valuable – that’s no secret. We know companies buy and sell data and that everything we do generates value.
Even while we sleep, we produce valuable data. Yet, at present, consumers are the only stakeholders who cannot benefit financially from their own data. While we can save money, we cannot save data in the same way.
A Data Savings Account offers an alternative form of savings, independent of government programs or employer-sponsored pensions, allowing individuals to securely organize their data and monetize it appropriately. With this tool, you can manage the value of your data as you would your finances.
Today, your money is stored in a bank, giving you full autonomy to deposit, transfer, or withdraw it as you see fit. In contrast, your data resides in the cloud, and you lack control over how it’s used. You cannot leverage it to benefit yourself, your loved ones, your community, or even the planet. Meanwhile, others profit from your data – sometimes even to your detriment.
Looking back, savings accounts in the 1970s were often a collective effort, not solely an individual one. Family members contributed to a child’s savings account. Reflecting on this, I believe the next generation of grandparents will play a crucial role in helping future generations navigate these challenges and instill values that support a sustainable future. Perhaps I’m starting to feel old! (laughs)
Is there a difference between data monetization and data selling?
When people hear “data monetization,” they often equate it with buying and selling data, as that’s what we’ve experienced so far. This limited understanding is one of the first hurdles we face. At DrumWave, we propose a significant leap forward.
Monetizing data involves more than just buying and selling. It’s about assigning currency-like attributes to data, such as divisibility, transportability, and fraud resistance. This shift requires rethinking contracts, technology, user interfaces, and even regulatory frameworks. It’s an imaginative and complex undertaking that takes time for people to fully grasp.
At its core, data monetization raises two key questions: What is data? and How much is it worth?
To answer these, we must acknowledge that data behaves differently across layers of the technology stack. For instance, when data is structured into datasets, it becomes a product that can be bought and sold. This has been happening for years, leading to issues ranging from data sovereignty to AI regulation.
At DrumWave, we view data as potential, much like money. For us, data monetization is not about selling datasets but about giving data new dimensions of utility. To achieve this, we had to address five critical challenges: data sovereignty, data fragmentation, data discovery, data valuation, and data ownership.
While privacy regulations have laid the groundwork for protecting individuals’ data, the next logical step is data ownership. Ownership not only provides a clearer foundation for privacy but also has the potential to regulate AI and drive one of the greatest cycles of wealth distribution in history.
How can we measure the value of someone’s data? Who determines it?
This is the question everyone wants answered. People are curious about the value of their own data compared to others’. Additionally, they want to know if factors like income, race, or gender influence data valuation.
Opinions vary widely. Some claim data is worthless, others insist it’s invaluable, and some argue that recognizing data ownership could disrupt billions of dollars invested in AI.
For us, it doesn’t matter who you are – if you’re alive on this planet, you matter. If you agree that we’re heading toward a data-driven economy, the best step you can take is to start saving your data for personal, professional, and financial benefits.
But how do we determine data’s value? In any transaction, value is what you receive, while price is what you pay. Data has intrinsic processing value, but its price is market-driven. Depending on the use case, data can range from fractions of a cent per second to thousands of dollars per month.
Personal Data as Currency?
What we currently understand as currency must evolve, and I’m not referring to cryptocurrencies. The global challenges we face today – from AI to climate change – stem in part from how we define and utilize currency.
Currency, at its core, is a tool for exchanging value. Historically, it was closely tied to productive activities. Over time, however, we began treating money as a commodity, and it drifted further from its roots. Similarly, as we transitioned into the digital age, financial systems became increasingly abstract, creating new inequalities.
Data could play a transformative role in addressing these disparities. By incorporating data’s value into financial systems, we could lower risks and reduce the costs associated with uncertainty.