The NFTs Are Coming! The NFTs Are Coming!
What the Heck is an NFT Anyway?
First, before we dive into why data NFTs matter so much, let’s highlight what NFTs actually are. We can start by describing what NFTs aren’t. Contrary to popular belief, the image of the monkey is not actually an NFT. Huh?
Let’s break it down more simply. Let’s say you hit up the mall (because it is 1999 and brick-and-mortar stores are still very cool). You’ve been smashing it on Tony Hawk’s Pro Skater and you’re looking to land some bulky skate shoes to maximize your ollie vertical as well as the prevalence of your foot sweat. You find some sweet Vans, shell over some cash, and you’re on your way. But, before you go, the cashier hands you your proof of purchase (aka ownership). The cashier hands you your receipt. The receipt in this instance is the NFT. It’s not the Vans.
Just like the monkey pictures. It’s not the monkey pictures. The NFT is the digital receipt that confirms you own that specific monkey picture located at a specific place on the internet. That’s it. A bit less glamorous, but a lot more topical and relevant, especially when it comes to what we are doing at TIKI.
What is a Data NFT?
Alright, so if Data NFTs aren’t monkey pictures, what are they then?
Simply, a data NFT is just a digital receipt that says someone owns a specific data point. Inside each NFT consists of two elements: the fingerprint and the proof key. What are those? Let’s go back to the shoe example. (Yes, I know, I am slaying it with the references right now.)
You got your sweet Vans and you’re ready to tear open your shin trying to kickflip and then never skateboard again. But before you do, let’s talk about your receipt, or, your proof of ownership of those shoes. The fingerprint would be the part of the receipt that says “Vans Half Cabs, SZ 10, BLK” or something like that. If we wanted to get more specific, the UPC code for that specific model would fit the bill for what we’re describing.
Well, alright. Let’s now say all the Size 10 black Vans Half Cabs out there are recalled because they have faulty aglets on the laces. You send your shoes to a factory and the aglets are replaced. Now there’s a ton of identical shoes in a warehouse. How do you know which ones are yours? In comes the proof key. Each pair of shoes has a specific “password” (aka key) attached to it that only you, the owner, would know. It’s a very long string of letters, numbers and characters that would be impossible to guess. The combination of the fingerprint and the proof key proves that that specific pair of shoes belongs to you. For the security nerds out there, we use a zero-knowledge proof to prove ownership.
Data NFTs are essentially the same. The receipt (NFT) contains the UPC (fingerprint) to prove ownership of a higher-level occurrence (for example, an email from Amazon) as well as a secret key (proof key) that proves ownership of a specific occurrence (the exact email someone received from Amazon).
Okay, So Why Does it Matter?
The Importance of Ownership
At TIKI, one of our primary jobs is to assign users ownership of their data. We technically already own our data, but until now we have had no real way of proving it. Now, ownership can be proven safely, anonymously, and securely through data NFTs. Data is a hard asset, meaning there is value attributed to it beyond speculation and perception. Traditionally, the monetary valuation of data has been very one-sided. Businesses who are good with data know generally what they would pay for it. Users essentially just give it away in exchange for “free” services. Even if users were selling their data, businesses are pretty much calling the shots on the prices.
Now, a fair market value (FMV) can be arrived upon. This is a mutually agreed upon price between a buyer and a seller, or in this specific case, a licensor and a licensee. You can’t be a licensor if you don’t own the thing you’re licensing. With data NFTs you become the owner, and therefore inherently obtain the ability to become a licensor.
Why NFTs?
There’s multiple way of solving the problem of data ownership, so why settle on NFTs? Well, much has to do with the foundational pillars of TIKI: user-centricity, trust and transparency. The solution to the data ownership problem needed to have specific elements valued by TIKI, including anonymity, safety, immutability, decentralization, and open-source/public. NFTs were a category fit for us, as the versatile technology encapsulates all of the above.
Anonymity: With data NFTs, the owner of the NFT is public, however, what data the NFT owns is always anonymous.
Safety: Anonymity + immutability + open-source software = safety
Immutability: The “NF” of NFT is for non-fungible, which just means it can’t be changed. Once an NFT is minted, it becomes immutable. Once you own something, it can’t just be “taken from you.”
Decentralization: Practically centralizing the world’s data would be difficult and scary as hell.
Open-source/public: Publicly declared NFTs on a blockchain means NFTs that can outlive even TIKI. They can be audited, verified, and backed up without any shadiness.
Why is Our Take on NFTs Cool?
A Unique Problem
Due to the specific use case of TIKI’s data NFTs, a unique problem has been created. Data NFTs exist already in other protocols such as Ocean, but not with the degree of granularity and volume that is required with TIKI’s data NFTs.
As humans, we are creating unprecedented amounts of data points (millions) per day and that number is growing. Let’s use an extreme example. If TIKI had 1,000,000 users generating and sharing 1,000,000 unique data points per day, each represented by one singular NFT, 7 trillion NFTs would need to be minted per week.
Using the same numbers, even if one NFT owned 1 million data points, 7 million NFTs would still need to be minted per week. Any way you cut it, our use case means we need to mint more NFTs than the world has ever seen.
Mike’s the type of guy who has a massive email inbox. For the first beta, we extract only four data points (aka signals) per email. Eventually, this number could be dozens, or even hundreds. For the sake of the example, let’s stick to four data points. Mike has 200,000 emails. Therefore he’s got 800,000 data points. He has to be able to mint 800,000 NFTs.
Now, extrapolate this out over the 30,000 users in our beta app, or the 140,000 users on our wait list. Naturally, everybody isn’t as much of an email hoarder as Mike. But the fact still remains, if even 30,000 users were generating 500 data points each, that still amounts to 15 million data points, and therefore 15 million unique NFTs. When TIKI is fully open to the public, that number will quickly rise into the billions each day.
So how the heck can so many NFTs be minted in a timely and cost-effective manner?
This Ain’t Like Bitcoin or Ethereum
This could get really tech-y really quickly. Let’s try not to get too, too deep here. If we do end up going there, it will come from Mike and not I.
A blockchain is a chain of blocks (heh). Each block is a record in an explicit order. Once it’s in the chain, it can’t change. An NFT is just a block on a chain. Non-fungible just means it can’t change. By making the blockchain decentralized, any computer can add the next block to the chain. Then the chain is shared among computers. So no one entity is ever in control.
In usual decentralized networks like Ethereum or Bitcoin, there is a blockchain shared among a network of computers. Each computer is competing to figure out who is going to add the next block to the chain. This is called consensus. We don’t need to get into elaborate detail here, but this process is very labor-intensive and uses a lot of compute on PCs. This, of course, uses actual energy and it’s the reason why minting an NFT on Ethereum costs an amount of money (gas) that would be completely unsustainable if we were to adopt the same model at TIKI.
If it cost $1 in gas fees to mint that 15,000,000 data NFT number above then it would cost TIKI $15 million to mint the NFTs, far more than the data is actually worth.
Luckily, with data NFTs, the there’s no need for this complicated and energy-intensive distributed consensus protocol. The order doesn’t matter, and nobody technically needs to see anyone else’s data NFTs, only their own. No one else needs to validate your data. You did it yourself by logging into your own Google/Microsoft account and linking it with TIKI.
So the only compute required is the compute required on the individual user’s mobile device to mint the NFTs, which is a negligible amount. A modern iPhone can mint approximately 25,000 data NFTs per second without breaking a sweat. The only real cost is storing a back-up of the users’ blockchains in a public cloud, which costs a few bucks per petabyte.
Immutable, Public, and Anonymous
When talking about why we chose NFTs to solve the data ownership problem, we mentioned anonymity, immutability, and open-source/public as three driving forces NFTs allow for us to utilize.
It’s worth doubling down on why these are so cool and powerful when combined.
Immutability makes it so the data can’t change. It makes it extremely difficult to steal or alter the data can now prove you own. Once ownership is declared, nobody else can take it or declare ownership of the same thing. You yourself can only exercise your ownership rights.
Public/open-source means no shadiness. Anyone can check, verify, or audit the blocks (NFTs) on the chain. If anyone ever messes with the chain, everyone can see it. Additionally, making the NFTs public allows for them to outlive TIKI, much like any hard asset can outlive the companies transacting it.
Anonymity seems quite obvious. It’s your data, so it’s important to keep the data anonymous. With NFTs, public/open-source and anonymous are possible simultaneously.
So, there you have it. NFTs are an extremely powerful and simple tool that align with what we’re doing. The problem of ownership is now solved.
Neat, huh?
What's our profit, what we have gained from this.