Serial Entrepreneur: Digital Ecosystem Favors Data Distributors Over Creators

According to Victor Yu, co-founder of Carv, the current digital ecosystem favors data distributors over data creators. While he acknowledges the usefulness of regulatory frameworks like the General Data Protection Regulation (GDPR) and California Consumer Privacy Act (CCPA)in overseeing internet users, Yu believes these frameworks fall short because they do not translate into full user control of their information.

Existing Regulations Insufficient

Yu told Bitcoin.com News that these frameworks, while giving users more say in data storage, do not make them the ultimate decision-makers. Similarly, while legal grounds and enforcement bodies exist to encourage compliance, Yu claims these frameworks rely on businesses “honoring consent and preferences, which does not always happen.”

When asked about strengthening existing regulations, the Carv co-founder argued that achieving this within Web2, which he sees as favoring platforms over users, might be difficult. While not outright rejecting the idea of developing user-protective regulations in Web2, Yu contends that real data transformation will only occur in Web3.

Despite the likely slow transition to Web3, Yu envisions it giving users “unprecedented agency in managing their online identities and personal information.” He even foresees Web3 “surpassing what regulations alone can achieve, or rather, enforce.”

In his written responses to Bitcoin.com News, Yu also shared his views on claims of organizations profiting from user data without explicit consent and the state of data decentralization in six years.

Bitcoin.com News (BCN): It’s widely believed that some organizations are profiting from internet users’ data without their explicit consent. How did this situation arise, and how are these organizations able to do so legally despite government oversight?

Victor Yu (VY): Data conglomerates have managed to make this the status quo. Companies like Facebook and Google disclose their data practices in extensive terms and conditions documents that users “agree” to upon signup, often without reading. They justify these data collection and profiteering practices by offering free services and allowing users to opt-out if they disagree.

But, it’s crucial to remember the saying: “If the product is free, you are the product.” Users are viewed as both customers and resources in web2, fueling massive advertising empires and targeted enterprises. These businesses thrive on consumer data, the new “oil” of the digital age.

While privacy regulations are evolving globally to address these issues, it’s important to note that the deep-rooted data imbalance isn’t a bug – it’s a feature. It’s fundamental to how web2 platforms were created and how they generate revenue.

Despite government efforts to supervise and regulate data practices, the rapid pace of technological advancement often outstrips the speed of legislative change, allowing companies to operate within legal boundaries while still raising ethical concerns about data ownership and user privacy.

BCN: The GDPR and CCPA are the two most popular data regulation frameworks governing various categories of internet users. Despite these regulatory frameworks, users continue to seek more robust systems that could protect their data and offer substantial benefits. Do you believe frameworks like the GDPR fail to address users’ concerns about their data privacy? If so, what are the limitations of the GDPR, CCPA, or other traditional data regulatory frameworks?

VY: Legal doesn’t always mean ethical, and it’s encouraging to see governments attempting to address this issue. However, the current digital ecosystem favors data distributors over data creators. While regulations like GDPR and CCPA offer some protection, individuals still lack full control over their information. Instead, they share preferences and hope they’re respected.

Take GDPR, for example. It gives consumers more say in who saves their data, but the fundamental flaw remains: consumers aren’t the ultimate decision-makers. They have legal grounds and protective bodies encouraging compliance but still rely on businesses to honor their consent and preferences – which doesn’t always happen.

Web3 presents a more robust solution. Backed by blockchain’s security and irrefutability, users become the true arbiters of their data. Take CARV, for example, the key shift we advocate is transforming data creators into data deciders and removing the middleman altogether. This approach aligns with our vision of a digital landscape where individuals have genuine ownership and control over their personal information.

BCN: Are there legislative routes to patching the loopholes in the existing regulatory frameworks or is it only possible to fix them via technological solutions?

VY: Data regulations are undoubtedly a positive development. They’ve finally forced tech giants to be transparent about their data practices, compelling them to explain how they collect, use, share, and sell personal information. This transparency has been long overdue, and we should acknowledge the significant strides made by governments and advocacy groups.

But, a broken system is a broken system, and there are some things regulations can’t fix. Web2 inherently favors platforms over users, with centralization posing inherent data privacy and consent issues. In contrast, Web3’s decentralized nature allows users to better control their own data and online interactions.

While we should continue developing regulations to protect users in web2, especially as billions of users continue to operate in this environment, the real data transformation lies in web3. As these technologies mature and gain adoption, users will inherently enjoy far more rights and control over their data. This ecosystem offers built-in privacy protections and data ownership through blockchain technology and decentralized apps. The transition will be gradual, but ultimately, web3 promises users unprecedented agency in managing their online identities and personal information, surpassing what regulations alone can achieve – or, better said, enforce.

BCN: Your project Carv Protocol claims to be building the largest modular data layer for gaming and AI applications, where users supposedly retain sovereignty over their personal data and actively engage in the economic ecosystems built around it. Could you talk about the mechanics behind ensuring that the ownership and control over data remains firmly in the hands of individuals?

VY: A solution like this has been a long time coming and we’re now, technologically speaking, in the right era to make it happen. At CARV, our protocol is designed to facilitate seamless data exchange and value distribution while prioritizing user privacy and control. The mechanics behind achieving this are multifaceted, managing the data lifecycle across six layers including identity, storage, computation, training, execution, and verification.

By integrating these layers, and having the community oversee that data is processed as intended via verifier nodes, we create an ecosystem where users can truly own, control, verify, and monetize their information. This addresses many of the concerns we’ve discussed about data ownership in web2.

The CARV Protocol goes beyond just storing data securely – it creates a fair and transparent data ecosystem that benefits both business partners and the gaming community. For users, our protocol grants data control, unites digital identity, and enables them to share this information securely and privately. On the other hand, for businesses, it provides access to high-quality, privacy-preserving, and regulatory-compliant user information, something that drives business development and marketing efforts.

We’re pioneering a win-win future where data generates value for all participants, not just centralized platforms.

BCN: Most internet users believe achieving personal data control amounts to fighting against the establishment, whom they assume is benefitting from the current structure. Do you anticipate a pushback from the establishment to maintain the status quo and continue benefiting from the existing structure, or has technological evolution reached an irreversible point?

VY: While we anticipate some pushback from established players to maintain the data status quo, technological evolution has likely reached an irreversible point. We’re already seeing attempts to regulate blockchain and cryptocurrencies, but simultaneously, major web2 companies are experimenting with these technologies.

Facebook, Google, and Telegram are all exploring web3 capabilities, indicating an “if you can’t beat them, join them” mentality, especially as they closely watch the emergence of data-forward social media platforms and try their best not to get left behind.

Telegram is probably the most instructive example of this evolution – integrating crypto wallets, co-opting a blockchain ecosystem, and launching in-platform mini-apps show how these platforms with huge, traditional audiences are moving the needle toward web3 revolution.

Moreover, user sentiment strongly favors change. A recent survey by Consensys found that two-thirds of respondents believe they should own their online creations, while over 80% prioritize data privacy. Only 38% feel adequately compensated for their online contributions.

This combination of market leader adaptation and user demand suggests we’re at an inflection point. Web3 offers a chance to evolve yesterday’s data dynamics into something fairer and more accessible. While there may be resistance, the momentum towards data ownership and control appears unstoppable.

BCN: With the decentralization of data and full control in users’ hands, where do you see the Internet in 2030?

VY: We believe we’re heading towards a user-owned internet by 2030, one where individuals not only retain sovereignty over their personal information but actively engage in and benefit from the economic ecosystems built around it. At CARV, we’re working to be at the forefront of this transformation, particularly in gaming and AI applications, by revolutionizing how data is used and shared.

Consider this: 90% of the world’s data has been produced in just the last two years, with each of us generating approximately 146GB daily across various applications. This data has become the foundation for entire ecosystems, particularly in rapidly evolving industries like gaming and AI. Yet, the creators of this data see little of the resulting financial gain.

By 2030, blockchain technology and decentralized systems will have matured, offering privacy and control without the current complexities. Users – armed with united digital identities and data across platforms – will decide what to share, with whom, and under what terms – and importantly, they’ll participate in the value created from their data. Through projects like the CARV Protocol, we’re building infrastructure to support this vision, allowing individuals to own, control, verify, and monetize their data.

This user-owned internet will foster innovation and competition, as businesses will need to offer genuine value to access user data. We’ll see new economic models emerge, where users can earn passive income from their data contributions, fundamentally altering the relationship between individuals and platforms.

Ultimately, the internet of 2030 will be more equitable, transparent, and aligned with user interests, marking a return to the web’s original promise of decentralization and individual empowerment. We can’t wait to help spearhead this sea change, making CARV an integral part of this user-owned internet.

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