Why is Data the Currency of the Future?
Data is everywhere, and for better or worse, small businesses and multinational corporations alike are having an easier time getting their hands on it. Those who mine data do so from multiple sources, and it’s no secret that your data is collected wherever you step online.
Whether you sign up on a social media site or agree to let your favorite retailer track your shopping habits, you’re essentially granting permission for these sites to take your data and use it as they see fit. Data is sourced in many ways, some more “ethical” than others, but there’s no question that as we head further into the future, data will play an even more prominent role in business operations.
Many people don’t realize that data acts as a sort of digital currency. They tend to imagine paper dollars or online monetary transfers when they think of currency.
Data fits the bill—no pun intended—because you can use it to exchange economic value. In this way, we can define currency as anything that you can trade for goods, services, or actual money.
But why has data become such a hot commodity, and in what ways might this new form of currency shape the digital landscape?
The Rise of Data
To understand the “data boom” and its implications, it’s crucial to understand how our world became so data-driven in the first place. How is it that, in 2020 alone, over 50 billion smart devices were interconnected to collect, analyze, and share data? The answer lies with big data, a relatively new science that uses advanced analytic techniques to make sense of enormous data sets.
As big data entered the scene, data evolved from siloed information stores to deeply connected knowledge pools that businesses could use to make more informed decisions and ultimately drive revenue.
Once businesses discovered the value of data, they started looking for ways to collect as much of it as they could and working to understand its meaning within a broader context—and thus, the Data Era was born. It’s no coincidence that this shift occurred simultaneously with the advent of smartphones, social media, and the digitization of business.
More people online allowed data to explode like never before. Even with the heightened awareness around security, businesses took advantage of the treasure trove of information at their disposal, coming up with new, innovative solutions for collecting and managing this data.
Now that data is used for almost everything by virtually all companies, and it has grown in value and become a type of digital currency that can be traded and sold.
How Data is “Priced”
Your data has value like all forms of currency, but that value depends heavily on several factors. To accurately assess your data’s worth, you might consider it in terms of a data valuation cycle. First, you must understand what data you have and how an entity could use it.
Next, understand the value of the data you own, and then use that information to make smart investments with the data. Use your data to identify how to create value for yourself and your stakeholders and act on those insights to deliver value. Finally, you can reflect on the process, exploring what you have learned and determining how to improve going forward.
It’s also important to note that meaningful data is valuable data. In other words, data that simply exists does not hold as much value as data that provides actionable insights.
Ask yourself what your data is actually telling you. How can this information be used to make smarter business decisions? What have you gleaned from your data that you can’t find elsewhere? Taking these questions into consideration can help you better understand what your data is worth.
An Expanding Digital Footprint
While it’s inevitable that a growing number of businesses will come to rely on data as a currency, individuals could soon be swapping personal info for profit as well. Imagine this scenario: at some point in the near future, you are shopping around for good travel deals.
Instead of paying money for a booking package, you “cash in” a chunk of your digital data to receive travel assistance services that are personalized according to your interests, preferences, and habits. You benefit through these services; the travel agency benefits by gaining access to your data, which can be used within a larger data pool to understand customer behavior better, and it’s a win-win for everyone.
Just as you carry cash and credit cards in your wallet today, you could be carrying a form of data currency on your smartphone tomorrow. While maintaining a connected digital footprint can prove helpful to both businesses and consumers, we must address some downsides as we consider data a future form of currency.
Should there be limits regarding what data can or should be collected? How might people be able to opt out of data sharing? Are there certain privacy lines that entities should not cross under any circumstances? Understandably, having so much of your data floating around in the open can be worrisome, so businesses must seek to mitigate risk as much as possible.
Data That Pays
Perhaps ironically, one of the main reasons to invest in data as a currency is to generate revenue and help reduce business costs. This means that the “money” you exchange with others has the potential to eventually circle back around to you in the form of actual cash. But how does this work? For one, certain businesses and individuals may be willing to accept data as payment, saving you dollars—needless to say, more valuable data equals more leverage in terms of monetary gain.
The data you purchase from others can be helpful in its own right. You might, for instance, pull a crucial piece of information from that data that can be used to improve your existing business practices. By treating data as currency, trading it for money and additional data, you can expand your options in terms of both payment and knowledge.
Join the Data Revolution
Data is now the lifeblood of the digital world and is likely to grow in relevance over time. Although data is destined to become the currency of the future, some are working to ensure sustainable management and transparency within the space.
Used improperly, data can do more harm than good, which is why it’s critical to improve your stake in data before allowing it to take off as a new form of currency truly.
Of course, quality tech solutions are necessary to maintain data infrastructure and keep track of the day-to-day business tasks that make data collection and project management possible. Teksetra is a single-source technology solutions provider that offers access to IT support, project services, repair and maintenance plans, third-party logistics, and more. With Teksetra, you can supplement your staff, decrease non-billable time, complete more projects, and get the expertise you need with on-demand support.
Teksetra offers service solutions, audiovisual solutions, and hardware solutions—all of which can be used to help you achieve your business goals. Reach out today to learn more about how our services can help your business.
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