Is Data the Oil or the Currency?

Lately I have seen again the notion that “data is the new currency” and similarly „data is the new oil“. We are quick to put out these metaphors because they seem to illustrate the importance of data in business today.

But there is a fundamental difference between oil and currency as a model for what data is and this difference is sometimes lost in the discussion.

Oil is a limited resource that only can be found in some places. Whoever gets his hand on these places first or who happens to own the land (or the country in some cases) that oil is found on gets all the benefits from the oil. A fact that many middle east countries have been living on nicely.

While currency is also a limited resources, at least to some degree and with economic consequences when too much is created, it has a number of important features. The functioning of a currency is based on transparency: the value is visible to or can be determined by everybody and availability: everybody can acquire it at an agreed value.

Going through this description than data today is more like oil, where a few companies, by virtue of their business model, their execution excellence, their right time to market have gained access to a lot of data.

Data today is not transparent and tradable like a currency. While people may trade their personal data for free applications involuntarily, they can not determine the real value of their data. And data can not really be traded openly or actively. A lot of companies have created an infrastructure for themselves to sell data and the holy grail of many companies and new business models is created around such an infrastructure. But those people that provide the data for such business models are not involved in the creation or control of those systems.

Whether this will change in the future or data will always be stuck in the „oil corner“ of the metaphors is to be seen.

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