Most Internet users still probably do not realize how valuable their personal data is. But the reality is, data monetization is the primary stream of revenue for tech giants like Alphabet (parent company of Google), and Facebook. They have been harvesting our data and monetizing off our data for over two decades now.
What is happening in Web2 should prompt us to realize the power of data in our modern economy. Even artificial intelligence (AI) will be empty algorithms without data. Thus, we as Internet users must realize we are actually the ones that are feeding the powers of the tech giants and AI. It is ultimately the Internet users who are forging the digital future of this world.
So, let’s take a deeper look into the data monetization topic. In this post, we will explore the potential of using blockchain technology to transfer data monetization power to Internet users.
State of Data Monetization in Web2
In Web2, companies like Google and Facebook collect and sell user data for targeted advertising and analytics. As such, Internet users have little control over how their data is utilized.
Thus, after two decades of having the tech giants monetizing valuable users’ data, we should ask some questions as stated by the authors of Internet of Things, Technologies and Applications For a New Age of Intelligence’ :
- Is data monetization off users ethical?
- Do companies like Facebook and Google really have the right to own their users’ data and profit from it?
- Should we not as Internet users be given full ownership rights of our personal data?
As of 2025, it is still the tech giants that are monetizing off our data. To counter the tech giants’ self-claimed right over users’ data ownership, we have regulations that try to limit their powers. Privacy centric browsers like Brave and DuckDuckGo are also freely available to the use, which can better protect our data privacy. However, the regulations and browsers seem to have limited impact taking into account the huge sums of profit that the companies are enjoying.
As also pointed out in ‘Internet of Things, Technologies and Applications For a New Age of Intelligence’, regulations focus on data privacy. However, the missing piece on the rights of data ownership is tradability.
If we do not possess the right to trade our data, ultimately, the value of the data can only be capitalized by the companies. When tradability is achieved, then data privacy becomes less of an issue. Only then we can regard our data as an economic asset.
How Data Monetization Can Work in Web3
In general, the decentralized Web3 aims to give more rights to the individual Internet user. By decentralizing the current form of Internet which is mostly controlled by companies, Internet users can gain more power in deciding what they want to monetize.
Web3 holds the potential to disrupt the Web2 business model of monetization off the users’ data. By leveraging blockchain, smart contracts, and decentralized storage to give individuals ownership over their digital footprint.
Key Mechanisms for Data Monetization in Web3
- Self-Sovereign Identity (SSI):
Users should possess sovereign control over their personal data and choose who gets access to it. The SSI concept itself is still in its infancy but holds much potential to be a reality. - Data Marketplaces:
Imagine a public marketplace like eBay, but instead of physical goods, users auction off their data. From a technological perspective, such a marketplace is already able to exist but ethical and governance issues is hindering progress. - Tokenization of Data:
In addition to a data marketplace, a company with the right resources can also develop a system where the individual user data is tokenized. With NFT (non fungible tokens), users can prove that they are the rightful owner of the data. - Privacy Preserving Technologies:
Preserving privacy is still very important even if the users possess the right to trade their data. Each individual user will likely have strict requirements on what type of data they are willing to trade. Privacy centric cryptos like Monero and ZCash have already proved that privacy can be preserved in Web3.
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Data Monetization in Web3: Can It Work?
Opportunities in Web3 Data Monetization
Financial Incentives for Internet Users
Opportunities in Web3 are plentiful but there remain much challenges to capitalize on the opportunities. By providing financial incentives to Internet users, we can attract more users to to enter into the Web3 space.
Currently, most Internet users go online to either consume entertainment or seek for information. Thus, just imagine how an entire new digital economy can be born if more users go online to participate in data monetization projects.
Greater Transparency and Security
One of the problems with allowing the Web to be monopolized by just a handful of companies is lack of transparency. Internet users scantly know how their data are being used as most people cannot understand the privacy policies filled with legal jargon. Many Internet users also fall prey to online scams because they do not understand how digital money is moved across the Internet.
Therefore, a decentralized blockchain system that advocates for greater transparency and security will enable more Internet users to be more tech-savvy. For example, since Bitcoin as a decentralized blockchain emerged, it has proven to be capable of acting as a medium that can speedily and safely conduct transactions across the world. Blockchain thus holds the potential to be a revolutionary technology that can transform how our world conducts transactions.
New Business Models
Enterprises will surely be interested to acquire more data about their customers to remain competitive in the digital era. Even now, businesses of all sizes are constantly offering incentives to their customers in exchange for their willingness to divulge some of their personal data to them.
Blockchain and other Web3 technologies therefore can play a significant role in stimulating the economy. By emphasizing on transparency, ethical data acquisition along with offering fair compensation to users, enterprises can expand their businesses instead of relying on intrusive tracking. When there is more trust between enterprises and consumers, it will foster a win-win situation.
Artificial Intelligence and Data-Sharing Economies
As we have mentioned above, artificial intelligence (AI) will be just empty algorithms without data. Henceforth, our technology and AI-driven world will definitely need more data in order to advance. In fact, without sufficient or high quality data, our future technologies and smart cities will not be beneficial mankind.
As we advance into the future, we can expect a major portion of big data to be gathered from the IoT industry. However, our ever data-hungry smart systems will also need personalized data. This latter form of data will be even more crucial if households mass adopt humanoid robots in their private homes.
Therefore, beginning now, we can expect the data-sharing economy to evolve and expand. Rather than allow a handful of tech companies to dominate and monopolize data acquisition, data-sharing should be an open world where consumers get to decide for themselves how they can benefit by sharing data.
Challenges of Data Monetization in Web3
Privacy Concerns
While monetizing data can be lucrative and even benefit the user, it raises concerns about how much privacy individuals are willing to sacrifice. Even in decentralized systems, the risk of data misuse remains.
Scalability and User Adoption
Many Web3 project including data marketplaces are still in very early stages. Mass adoption would require seamless user interfaces, regulatory clarity, and infrastructure scalability. While Web2 and social media in general had rapidly gain mass adoption, we cannot expect the same to happen with Web3.
Legal and Regulatory Uncertainty
There still lacks regulatory clarification in terms of how blockchain systems can be utilized. Strict policies like GDPR and CCPA may limit how personal data can be monetized, creating compliance challenges for Web3 projects.
Fair Valuation of Data and Ethical Dilemmas
Determining the value of individual data can prove to be a highly complex issue. Data is unlike a physical object that is distatched from the person’s being. For a physical object, the seller may just lose a sum of money if they are cheated. Misuse or unethical use of an individual’s personal data may however cause much more dire consequences.
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Conclusion
Data monetization in Web3 presents a groundbreaking shift in how personal data is controlled and valued. While challenges like privacy risks, regulatory uncertainty, and adoption hurdles remain, the potential for users to profit from their own data is immense.
Nonetheless, with increasing concerns about surveillance capitalism, users and regulators may push for stronger privacy-first frameworks. Data monetization models will likely emerge but may face challenges in mass adoption. While Internet user may find monetary compensation for their data attractive, less tech-savvy users may prefer free services without having to manage complex data transactions.
For now, data privacy-focused solutions are taking priority, but as the decentralized economy evolves, data monetization could very well become a norm. When that moment arrive, businesses and Web3 developers must balance ethical data practices with innovative monetization models to create a sustainable digital future.
