Data is neither oil nor currency. It’s much more serious than that

A post rescued from my draft folder

Some rights reserved by Sam, W

An invitation to speculate on “data as a currency” at the Leeds Digital Conference forced me to crystalise a long-held unease with metaphors that cast data as any kind of commodity or medium of exchange.

It has become commonplace, even among people I trust and respect, to say things like,

“Data is a currency – The trade in data is only in its infancy.” – Edd Dumbill


“If ‘Data is the New Oil’, the money is in refining it to create valuable services that we cannot live without.” – Ben Reason

These analogies trouble me and this post is to explore the reasons why.

In economic parlance, oil is a fungible good. That is to say, nothing changes if one unit of the black stuff is replaced by another. When I stop for fuel, any litre of unleaded will power my car.

Oil is just one of a large class of commodities that behave like this. Many other things, such as copper, wheat and pork bellies, have been similarly standardised to make for easy comparisons and transactions. You can even buy the pork bellies of the future today, free from the risk of ever having to sully your hands with raw pig meat.

The most refined form of all is money itself, a medium of exchange that has value only because people are generally willing to exchange it for stuff you want. If you owe me £50, I’ll accept any £50 note – even one bearing the face of notorious patent troll James Watt.

We can easily see why these are appealing metaphors. If you can commoditise something, you can exploit it at scale, using repeatable business processes which require no attention to each instance of the object.

  • “Targeted” and re-targeted advertising is bought by the thousands “impressions”.
  • Spammers trade our email addresses and phone numbers by the millions.
  • Whole start-ups are valued based on assumptions about the potential monetisability of their user bases.

“Give me your tired, your poor / Your huddled masses yearning to breathe free… I lift my [algorithmic] lamp beside the golden door!”

But I think it is misleading to see data this way.

As a store of energy, data is less use than oil. It is more perishable. Oil can be hoarded by the barrel; data starts to slip from our grasp the moment it enters a database. It is a snapshot of a world that is always changing. We shift our interests and opinions, we move house, we grow old and die. This urgency often seems to be lost on those who would gather data first and work out what to do with it later.

Phase 1: Collect underpants, Phase 2: …, Phase 3: Profit

At the same time, data is much more than oil. It is infinitely reusable, knowledge is the ultimate renewable. One can use oil efficiently or inefficiently, but there will always be a ceiling on the amount of energy it can surrender before it is used up. In the domain of data, the word “consume” is meaningless. The more you do with it, the greater the value may be realised. It may be even be combined with other data to create synergistic new value that could not exist without the combination of data from multiple sources.

Those who would refine data like oil do people a disservice. They reduce the so-called “data subjects” to so many compressed, dead sea creatures, a lowest-common denominator mush that values only similarities, never the things that make us unique. Real data is made of the real actions and real stories of real people. Data visualised can be a beautiful, rich tapestry. Oil visualised is a slick.

NASA image courtesy the MODIS Rapid Response Team

As a medium of exchange, data is a very poor currency. At best a trade in data is a sort of barter, in which a specific piece of information has value to you, and you will do something for me in return. Its perishability means you cannot hoard my data; its infinite copiability means you can never be sure of exclusive title to it.

The value of my data to you may be quite different from the value of the same piece of data to someone else. By definition, every bit of it is different. As Claude Shannon framed it, and James Gleick recounts in “The Information“, information is difference. This is what makes data far more than a currency.

This is not to say that aggregated and derivative data – the promise of so-called “big data” – has no value. Rather, when we think of data as a commodity, we mistake the nature of that value. Someone who sees data as a commodity is doomed to look at big data only as a matter of volume – never mind the quality, feel the width. On the other hand, if we see data as difference – the opposite of commodity, we can concentrate on where the true value lies – in the growing complexity and sophistication of associations to be made between the contents of the big data soup. It’s not size that matters, it’s what you do with it.

But the differentiated nature of data also means that I can never wholeheartedly “give” my data, in the way I would transact with money. I have no claim over what happens to money after I spend it. With data, I never cease to care. I may trust you with my contact details, or my credit card number, or my real-time heart-rate. But if I do so, my interest in what happens to that data is heightened not diminished.

To treat data as a mere medium of exchange, absent of its intrinsic information value seems a terrible waste, an act that short-changes the data processor as much as the data subject. To act only on data as an aggregated, homogenised medium is to miss out on the value that could be created by treating each individual data point on its own terms.

How then should we treat data, if we are not to commoditise it? I think the key is moving from product-centric to service-centric thinking. Think of data as a wave, not a particle; as something never posessed but always shared between people who trust each other.  Its value is not in its intrinsic existence but in the way, once aware of it, we act differently together and towards each other.

  • Data is confidence – something given and received in trust.
  • Data is curiosity – the desire to understand the quality of the information, not just its quantity.
  • Data is care – the commitment to do something differently for ourselves or others based on the things the data is telling us.

Data is neither oil nor currency. It’s much more serious than that.

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