Where have we heard this before?
Our discussion about the democratization of data is starting to spread. Naturally, this has nothing to do with what was posted here. However, it is a mindset that is being adopted.
Web 3.0 has no future unless data is decentralized. This is a sentiment that is echoed by the co-founder of Flare, Hugo Philion.
His focus is upon the financial aspect of things, placing attention on the value of the crypto industry. Because of Hive, my scope is a bit wider than this.
Nevertheless, we can see the similarities with not depending (or feeding) the traditional platforms.
Image generated by Ideogram
The Value Of The Crypto Industry Dependent Upon Decentralized Data
The Hive blockchain has the ability to store any text. It is a database that is more than simply a ledger. This is one of the things that separates it from many blockchains.
We are still mired in an industry where the primary focus is upon the financial aspect of cryptocurrency. Web 3.0 development is still based around market activity, due mostly to the fact that "the green candle" people. However, for this to be successful, we need the Web 3.0 infrastructure to operate without the centralized entities.
This is what Phillion is focusing upon.
By now, most are aware of the value of data. Without it, we are dead in the water as they say.
“There are really only very few things you can do without data,” Philion explained during his recent sitdown interview with Decrypt. “Data powers pretty much most of the value of the current use cases, and we think most of all of the future value,” in the crypto and blockchain industry.
My view is the future value of any entity is going to be based upon the data it has and how it is used. This holds for a platform, company, or industry.
Whether we focus upon social media, finance, or entertainment, it all is the same: we are overwhelmingly centralized.
Even the DeFi world falls under this umbrella.
However, he explained, the industry’s reliance on off-chain oracles poses risks. “The problem with having an external entity providing the data is that you can't be certain how that works,” he said, adding that, “today's oracles have not really been looking strongly at security and decentralization and usability.”
What is off-chain is most likely controlled by someone else, usually an entity. This means we have a vulnerability point that could be solved with decentralization.
Flare is looking to become an infrastructure provider for the industry, offering the data on-chain which can be utilized by Oracles.
That infrastructure makes Flare a “third generation blockchain,” Philion said. Where Bitcoin represents the first generation of blockchains, capable of simple transactions, and smart contract blockchains like Ethereum and Solana are the second generation evolution of the technology, Flare “takes that a step further by integrating data into the blockchain.”
Data Democratization
In a world of rapidly advancing AI, the democratization of data is one of the most important services that blockchain provides.
The fact we are dealing with permissionless systems means that anyone can write to the database. Even more importantly, anyone is free to utilize the data as seen fit.
When it comes to AI training and the building of models, this will be crucial going forward. Companies realized how much their data is worth, leveraging what their platforms generate for financial gain. This evolves into a situation where "the rich get richer". It quickly becomes an exclusionary system.
We already see this with LLMs. The cost of training precludes most entities from getting involved in a major way. That said, we see things changing as computing costs keep dropping.
This means that models can be trained using less compute. What cannot be overlooked is the continual need for data.
Basically, the future value of any entity depends upon data. How are Web 3.0 application or platforms going to generate value if they are dependent upon Web 2.0 data?
My guess is they will not survive simply due to the fact companies are not sharing without payment. OpenAi is scrambling to get its hands on as much as possible.
Hive does offer a bit of a solution since text data can be stored. This means that social media activities can feed into the database. It is something that OpenAI is missing. This also provides an advantage to X, Google, and Meta.
Whatever is written to chain becomes available. We can think of this as Humanity's Database. When we view it from a commons standpoint, it is not different than the air: it is available to all.
There is also the fact that nobody controls it. This is crucial. We already saw a corporations shut down sites where decades worth of data is cut off from the world. With the situation around Internet Archives getting murkier, we could see the reality where decades of data instantly disappears.
If data is the new oil, who is going to have the massive fields?
As it stands now we know the answer to this. Hugo Philion sees the need to alter this.