Most of us are aware that the world is seeking data. This is something that is mentioned each time something like ChatGPT is talking about. In fact, we are facing a period where we are looking at a data shortage.
How can that be if we are producing an ever increasing record amount of data?
This is one of those situations where supply simply is outpaced by demand. The need for data to train artificial intelligence system is growing at an incredible pace. This is causing companies to look for more.
We are starting to get some idea how valuable it is, in monetary terms.
Reddit Agrees To $60 Million Per Year Deal
Reddit is not the largest social media companies. Actually, when we mention social media platforms, rarely does its name come up. Instead, we talk about Facebook, Instagram, X, YouTube, and TikTok. Heck, even Snap is talked about more.
That said, Reddit is a legitimate platform with an estimated 50 million daily users making it the 10th most popular social media network. It was starting in 2005, putting it at around 20 years old. Source
In this era, this makes the database the company is housing very valuable. How much is it worth?
Evidently, to train a simply AI system, it is worth $60 million per year.
Of course, here is the kicker: this does not have to be a one time deal. It is something that can be repeated.
The company behind Reddit still owns the data. It is providing access to this other entity yet still retaining the ownership. Unless there was something in the contract where Reddit agreed not to let anyone else use the data, it can simply duplicate this agreement elsewhere.
What this means is databases have enormous value.
Of course, this should come as no surprise.
Web 3.0 Needs To Learn This Lesson
Each day, we see billions flocking to Web 2.0 platforms to enrich those owners. Web 3.0 promises a new structure in this regard. Yet, still, we see it lacking.
There are many reasons for this. However, as I stated in the past, there is no way Web 3.0 is going to succeed if it depends upon Web 2.0 data. Another way of phrasing it is we have to stop feeding those entities.
Many within cryptocurrency understand that each time they remove a dollar from the banking system, and move it to crypto, there is a small shift. With each move of this, we see the crypto world getting stronger.
How come, then, people do not see this with data? It is really simple. The values are starting to emerge and yet we have people residing on Web 2.0.
By now, many are aware the NY Times sued OpenAI over the unauthorized use of its data. We will see if the Times can win this one but the message is clear: data can be monetized is ways not seen before.
What Is In The Database?
There was a commercial for a credit card some time back that asked "what is in your wallet". We can adapt this to Web 3.0 by asking "what is in the database"? Essentially, what does Web 3.0 have that is worth anything?
In my mind, this is something that is massively overlooked. Distributed ledger technology basically generates databases that look like banks. Notice how we do not see technology companies seeking to use the data from Bank of America or JPMorgan. Financial data doesn't have much value outside a short window. It certainly isn't very useful for machine learning engines.
Social media platforms, on the other hand, seem ideal. Here is where Google, X, and Facebook (Meta) are excelling. They have a growing amount of their own data available to them. Each day, users simply add more to the database.
Of course, much of what is in there is nonsense. That said, there are two pathways they follow.
The first is how language is used. For this, most of the data is applicable since it does show how people interact and the systems can learn some of the nuances of language.
Our second factor is information. If we want to ask a chatbot the years Winston Churchill lived, that data has to be available. Obviously, scraping the Internet would do this. However, that is getting harder as companies, including Reddit, secure their APIs.
A well developed database is a gold mine. Here is a basic level of where Web 3.0 can develop value in a short period of time. Unfortunately, it seems most do not focus upon this.
Reddit is now cashing it. Over the next couple years, if the platform remains strong, it will have more value as the database gets larger.
It is unlikely the need for data will disappear.
This is something Web 3.0 has to consider.