Data & Tech

These groups want to collect your data in exchange for crypto

Data unions like Swash want people to make money from the personal info advertisers collect online.
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Illustration: Dianna “Mick” McDougall, Photos: Getty Images

5 min read

As the old adage goes, if you’re not paying for the product, you are the product—every decision is a small data point that’s collected, bought, and sold. Now, the products—uh, the people—want a cut. Calling themselves data unions, crypto enthusiasts have started projects that give individuals payments in exchange for their data.

Data unions are quite unique in the sense that you don’t necessarily need to know about crypto, you don’t need to know about how blockchain works. But, everyone has data—everyone has that as an asset that they can benefit from,” said Chloë Diamond, CMO of Swash, which calls itself a data union.

Swash, which raised $19 million from investors as of October, says it has roughly 250,000 users who have downloaded its browser extension, which collects data about users’ online browsing habits in addition to personal information like their age, gender, and household income.

In exchange, Swash gives users a Swash token, currently valued at $.02229. Like with other crypto projects, the belief is that the more the token is adopted, the more the price will rise. Ultimately, Swash imagines selling this data—with user consent—to individual brands, agencies, or data marketplaces.

Payments vary. Diamond told Marketing Brew that payouts have averaged “a few Swash per month,” with all members receiving an “equal distribution of tokens,” according to its site. But that is changing. Recently, she said Swash is updating its payment structure to ensure “active users receive more.”

Still, she was vague. Despite decrying a lack of transparency in the data industry, Diamond didn’t say how much Swash members make per week in exchange for their data, besides pointing out that Swash had distributed roughly 1,078,580 tokens as of writing, according to their website.

Let’s do some math: Equally distributed across 250,000 members, that’s about 4.31 tokens per member. Multiplied by $.02229, that’s about nine cents.

Swash has already found one client for its data, an “insights” company that Diamond declined to name.

Surf’s up

Paying people for their online data is not an original idea. During the 2020 presidential election, Andrew Yang pitched the “Data Dividend Project,” but as Wired noted, the idea harks back to the 1990s, when pay-to-surf companies paid people to browse the web, then tracked their browsing behavior for advertising purposes.

The problem: People were, and are, happy to surf for free.

“It required a real unicorn type of consumer who was hyper-geeky and really wanted some money for their data, and there were so few of those people,” said Myles Younger, VP of go-to-market and data at Media.Monks.

Now, leveraging the phosphorus glow of crypto culture, data unions are plying customers with tokens, suggesting that one solution to incentivized data-sharing exists within the next iteration of the internet, Web3. It isn’t totally unbelievable.

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In April, Mastercard CMO Raja Rajamannar, called consumers getting paid for their personal data “inevitable,” specifically pointing to cryptocurrency and blockchains as viable use cases.

Swash is built on a protocol, or framework, created by the Data Union DAO. Six other data unions are using the same infrastructure. Though Swash and other members would need to agree to sell their data, the DAO is currently pitching itself to data marketplaces like Amazon’s AWS marketplace and Snowflake, where the data can be bought and sold—just like how advertisers buy from data brokers like LiveRamp, explained Marlene Ronstedt, a co-founder of the Data DAO.

Though individual data dividends may be insignificant, if stacked, they could add up to fatter checks. So, someone already selling their data to Swash could also join Dimo, a Web3 project that collects and sells vehicle data from consenting drivers.

“Our assumption is that there’s going to be sort of like a cross-pollination,” Ronstedt said.

“Lipstick on a pig”

Brave, an internet-browsing tool that strips sites from advertisers and blocks trackers, has been paying out cryptocurrency since as early as 2016, first paying users in Bitcoin, then in its own token called the Basic Attention Token.

It pays users for opting in to Brave’s own advertising, with users getting up to five dollars a month, said Luke Mulks, VP of business operations at Brave. He declined to say how much advertising revenue the Brave browser has generated but said that Brave has minted around 10 million crypto wallets, which hold the currency.

Mulks was adamant that Brave isn’t creating a data union, which he called “lipstick on a pig.”

“The core of the problem is that it shouldn't require all this user information to show you an ad,” he said. “People are starting to recognize that users have value in this scenario. But, I still think you’re kind of approaching the problem in a way that doesn’t really get to the root of the problem.”

Still, many of the payment principals are the same—exchanging audiences for cryptocurrency.

The concept of paying people for their data has its detractors, though. The Electronic Frontier Foundation, a digital rights nonprofit, “strongly opposes data dividends and policies that lay the groundwork for people to think of the monetary value of their data rather than view it as a fundamental right.” Instead of worrying about payments, consumers should be concerned about the fact that their data is collected in the first place, the argument goes.

If an infrastructural shift is around the corner, one without as many third-party identifiers, advertisers should be paying attention to data unions, said Younger. “If I'm The Trade Desk, or if I'm Unilever….If I’m forward-thinking, I need to keep my eye on what the next infrastructure change is going to be.”

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