How NFT Tech Will Allow us to Own our own Data. Interview with Mark Paul, Founder, Itheum (Data NFT Company)

Transcript

Nick Abrahams:
The concept of NFT technology expands far beyond the idea of board apes and crypto punks. In fact, the very nature of this technology lends itself to an extraordinary number of uses and potentially in the area of how we control our data. And I am delighted today to welcome Mark Paul, who is the founder and CEO of Itheum. Mark, welcome to the show.

Mark Paul:
Thank you for having me, Nick, really looking forward to this.

Nick Abrahams:
Well, I mean, I love your company and what you are doing and not just because it’s based on, or it’s not based on, but it was a thought that I had some time ago about how NFTs technology might be applied to data. And I’ve put something out on LinkedIn and I’ve got a surprising amount of hate for it. I’m no stranger to a spot of hate on social media, but I was surprised, people were like, oh, this technology will never work in the personal information space. And Itheum is a great example of exactly the opposite that in fact it will work and is working terrifically. So before we jump into to that idea, maybe just a little bit about your background. How did Mark Paul come to be looking at this space?

Mark Paul:
Sure. Yeah. So I totally get it when you said you got a lot of hate, because I’ve been getting a lot of hate myself on this for many years.

Nick Abrahams:
Oh, we’re kindred spirits in that regard.

Mark Paul:
Absolutely.

Nick Abrahams:
It is like a support group.

Mark Paul:
So I mean the story of Itheum is actually a six year old story, right? So I come from a very traditional tech background. So I worked in a range of traditional tech ranging from broadcasting to social media all the way up to health and government. But I think around seven years ago is when I started working in the health tech space. And something became very evident to me that this area specifically had so many issues around data silos. Right? You can see everywhere, right? It’s all just locked up data totally disconnected. And there’s so many issues in health that I could directly connect to the fact that this data has been locked up. And what was really annoying me even more was the fact that all of this data that’s locked up is personal data, individual patient data, like you and me, our data was locked up in silos.

Mark Paul:
So this is when the idea formed, right? I wanted to just build a platform which could somehow connect to people in the real world, collect their data, create really high value personal data sets. But as a point of differentiation in the platform we built initially six years ago, which was just a traditional web 2.0 Platform. You still get to own your data, even though we never used crypto or blockchain or anything, it was a traditional web 2.0 Platform, but it protected your data. But it was this ideas. Of course, I spent six years trying to get this into the market, trying to raise investment, and almost every single conversation went along the lines of this is not going to work because this data sets are too valuable to give it to an individual to oversee or to look after, what if it’s hacked? What if it’s breached?

Mark Paul:
So I did understand that point of view, but I felt like the whole point was missed, right? The idea was to unlock these data sets. And I think it was last year when it became very evident to me that web 3,0 is the tool set that you could use to solve that problem. So we pivoted to complete crypto native and Itheum became a web 3.0 Platform. We no longer focused on health, so now we became a horizontal web 3.0 Data platform.

Nick Abrahams:
Right.

Mark Paul:
But the objective is still the same. How do we bridge high value data from web 2.0 to web 3.0, lets you and me as individuals take ownership of it and how do we trade this in the open metaverse?

Nick Abrahams:
I mean, it’s such a grand vision and maybe to get a bit of a flavor of things, how are you rolled out in the gaming space? Some examples around how it works in gaming.

Mark Paul:
Sure. So yes, you’re right. It is a very grand vision. So we say that we are building the core data protocol for the open metaverse, right? So yes you can imagine that’s like saying I’m going to build this new infrastructure, but that’s effectively what we are doing. Right?

Nick Abrahams:
Yeah.

Mark Paul:
But we are being very pragmatic about it. And the fact that we come from very traditional tech for 20 years, we want to reasonably get this out to market. And our go-to market is around gaming. And as you would know, gaming is where all the real innovation originates from because they have less friction to get their tech out.

Nick Abrahams:
Yes.

Mark Paul:
So in gaming, we launched our first products called the gamer passport and effectively what it does is that it enables a gamer as they move between web 3.0 games and web 3.0 gaming guilds to collect their data footprint. And I’m talking about on chain data like their gameplay, their earnings, as well as their off chain data, how well they interact in their Discord communities, how interactive they are in Twitter, their social metrics. So we have built data adapters that bridge this web 2.0 data on chain and off chain, attach it to a web 3.0 identity and then effectively we have a Dow based mechanism for bulk trading the data sets. Now this is not all just in the white paper, we are actually releasing this next month. And this is in collaboration with the WonderHero, which is we feel like one of the best web 3.0 games. At the moment, we’re growing very fast, very solid game economics. They do a wonderful job of being cross-chain. So they’re across two block chains. They leave a very nice data footprint on chain, which is great for us.

Mark Paul:
And they have an awesome team that loves data and insight so we work very closely with them. And just three days ago, we announced a partnership with Polkastarter Gaming Guilds, thousands of scholars, WonderHero gamers within it. So we have a three-way partnership where we install our gaming passport within the Polkastarter Gaming Guild Discord, where there are thousands of participants and they got WonderHero gamers. And we are literally collecting all this data and giving it back to the gamer, it’s never been done before. It’s quite mind blowing when you think about what kind of use cases this will unlock from terms of personalization in web 3.0, but very excited about it.

Nick Abrahams:
Oh, it’s fantastic. And we probably might need to back up a little bit because people may not quite get what a gaming guild does. And I think that obviously informs the use case that you’re talking about, but maybe could you just explain a little bit about what a gaming guild is and why they would be interested in this information in the game or passport?

Mark Paul:
Yep. Great question. So gaming guild is nothing more than… Think of it as a community of people who like to game, who are interested or who are interested in gaming. In web 3.0, most of these communities hang out in Discord. It’s just a social tool for you to build communities in. Gaming guilds in web 3.0 specifically, they themselves operate as a Dow or a decentralized autonomous organization. So, a lot of these gaming guilds are crypto projects by themselves. They go to market, they raise some private investment, then they launch their token trough an IDO, and then they raise a pool of crypto money. And what they do with this money is they purchase gaming assets. And in web3 gaming, most of the games require you to own gaming NFTs, characters and stuff within your-

Nick Abrahams:
Your sword, your skins, your persons-

Mark Paul:
Absolutely.

Nick Abrahams:
All that stuff. Yeah.

Mark Paul:
So everything in web3 gaming is an NFT, which is the big difference between web2 and web3 gaming, right?

Mark Paul:
Now, the guilds fund and buy a lot of these assets and then the guild effectively has one job to do. They need to optimize the income from the use of these assets. And they do that through basically two things. One is they have their asset liquidity, a pool of assets. They need to find the best player liquidity. In other words, the best gamers who are going to use these assets and earn the most. And the more that the best performing gamers earn the best for the guilds, the more revenue the guilds earn based on their dial based mechanisms, they share that back to the community. So you can see the cycle here, right? Now, it just so happens that what’s at center of this cycle and at the center of this whole economy to function is they need data. They need insights about who are the best gamers, of the history of the gamer. And at the moment you would be shocked to see the tools they used to do this. So they literally use-

Nick Abrahams:
Not spreadsheets.

Mark Paul:
Spreadsheets. Absolutely. They have-

Nick Abrahams:
We will never get away from spreadsheets.

Mark Paul:
I know, right? So if you start talking to web3 guilds, and these are huge organizations. 30, 40, 50,000 gamers in them. They literally have a team of operational staff who are filling spreadsheets, getting gamers to send screenshots of their gameplay. There’s this mess of data. And we said, “Okay, wow, Itheum just plugs in here.” And we can solve such a valuable use case. And guilds love it, right? They are waiting for a tech like this.

Nick Abrahams:
Yeah. It is fantastic. And I guess for folks who may not be super focused on the gaming world, the way that guilds work, if we think about it in a traditional sense, is it’s just like an investor collaborative, I guess, that have bought an asset that someone else wants to use, i.e. the gamer, and then they do a revenue split on the earnings that gamer makes in game. And so, for the more traditional minded, you’re actually getting to very standard or conventional business cases where you’ve got an asset, you know what your return on that asset will be, you want to optimize that return, as Mark said, by getting the best gamers.

Nick Abrahams:
And it’s the first, I think, digital asset business model, where you could do a discounted cash flow analysis and valuation on it. So I think it’s very much, as Mark said before, as you said before, the idea of this notion of in gaming, we are starting to prove out the business models of the future for digital assets. So I think we’ve got the gaming, and so it sounds like the gamer passport is well on its way. How about in the health space and some of the projects that you’ve been working on with health related data?

Mark Paul:
Yeah, sure. So health, it’s a personal connection for me. I always wanted to solve this issue and help. So gaming is the way we get our tech out, we show that it works, right? And health is probably where we could have the biggest social impact. So I spent a lot of time going around talking about this, because for me, this is the problem to solve. Okay, so what are we doing in health? Now, as we were actually designing the gaming use case, the gaming passport, looking at the different ecosystem participants, the data creators, the data consumers, the database, bulk trading of data. We actually very quickly realized that we had come up with a framework that we could apply to any vertical industry.

Mark Paul:
And gaming is one, but second and most excitingly is in health. So we started talking with a few partners who immediately got what we were trying to do. I’ll talk about a couple of projects, one particular, which we’re going to announce very soon. I think I’ll hold off from mentioning the name. And only because we are planning a big announcement in three weeks time about it. But this is one of Europe’s largest preventative health service providers. They have about 20,000 subscribers to the service, they’re based in Romania. I’ll give you guys that much.

Nick Abrahams:
Okay. So we’ve got some hints-

Mark Paul:
Some hints [crosstalk 00:13:04]-

Nick Abrahams:
Hopefully we don’t get doxxed.

Mark Paul:
And they are the most well known provider in Romania. So how they work is you get a subscription service, and then you get access to their preventative health services, as well as their clinical health services. So you get access to telehealth, their doctor network, gyms, and all of this, right? Now, they actually quite web3 savvy. So they launched an NFT collection that provides you access to the same services. So you can go to the open market, buy one of these NFTs and walk into their gym, scan it and walk in. Or you can literally use that to get a telehealth consult. Now what their ambition was, “Okay, what does the next generation telehealth and telemedicine platforms look like in the metaverse?”, right? Could we walk into a clinic in the sandbox or some of these platforms? Could there be some interaction between the clinic building and the provider within it? Could we share some data? Could we launch a personalized telehealth platform? And that’s what we are working with them for.

Mark Paul:
So in health, and in specifically this use case, we are building a metaverse health passport. So our same technology stack, basically retrofitted to another industry. We are getting access to their preventative health data sets or of their subscribers. We are attaching it to the individual. The individual owns a data NFT within Itheum. The data NFT happens to be fully interoperable in the metaverse and they’re able to then share their data for more personalized healthcare experience. So this pilot project starts off next month as well. And we intend to deliver this within 10 to 12 months.

Nick Abrahams:
Okay. It’s fantastic. What’s the user experience of that going to be? So just say with the example that you gave, you’ve got an alternative health provider. So my information will go in, it presumably sits on a blockchain, I imagine. It’s encrypted in some way, so it can’t be viewed by people, but it sits on the blockchain. And then I get an NFT, I imagine, in relation to my data. And then how do I determine who else I want to share that with? Because obviously I’m already sharing it with your particular partner, but if I wanted to share it more broadly, and is there an economic incentive to do that? Or is it just the convenience of having that data stored in a public access that’s secure blockchain solution.

Mark Paul:
Yeah. Okay. So to explain the user journey, let’s go back to the gaming example. The same user journey in any vertical. The first thing to note is that the data itself doesn’t get stored on the blockchain because there’s a lot of this data. And how internally we store it. So, we have this concept called a regional decentralized hub. And what that basically means is we pick storage based on the use case. So if it’s gaming and it’s not PII data, we’ll store it IPFS and file coin. But if it’s PII data leaking in here, we take that very seriously. We enable on premise storage.

Nick Abrahams:
Okay.

Mark Paul:
So if you are generating the data set, and this is very applicable to help in that example of the partner we are talking about, they have very sensitive data. Their data never leaves their premise. So they’re literally leveraging our protocol on premise, right? And I’ll explain how it all works together. So going back to data at the gaming use case. In gaming, we are collecting the gamer’s data. So if you think about it, if you are playing games, we know how much you’re earning, how active you are, how interactive you are in discord, who you’re helping, all of this.

Mark Paul:
So it’s not very sensitive data, right? So it’s a nice, useful data set. We store this in file coin. So we have a concept of a data adapter.

Nick Abrahams:
Yep.

Mark Paul:
You consent to join the gaming passport and basically what you’re doing now is consenting to link your data, adapt it to your address. We get this data, we store it in IPFS, we encrypt it using per user encryption. So every data set is encrypted in a unique way to the user. So this is the first part of the puzzle where we are bringing in the web two data into web three.

Nick Abrahams:
Right.

Mark Paul:
The second piece of the puzzle is you as the individual have to go into our data DEX, which is a product that we have.

Nick Abrahams:
Okay.

Mark Paul:
And you have to claim ownership of your data set. And…

Nick Abrahams:
Okay, so maybe just explain a data DEX for people. Yep.

Mark Paul:
Sure. So the second product as I was mentioning is called the data DEX. Now deck stands for decentralized exchange. People are familiar with the DEX from a trading token perspective, but we created the same concept for data. This is a peer-to-peer exchange for trading data. So if you say decentralized app, you log into it, and once you log in with your address, which is your wallet, which is something that you own, it’s able to identify all the apps that are built on Athium that are linked to this address and it pulls all the data sets in. Now, once you do it, there’s something here that’s very pivotal. And it’s a very important step. You have to claim ownership of your data set.

Nick Abrahams:
Right.

Mark Paul:
Right. And once you go in there, you see this nice data sets that you, so if you’re a gamer, you see your gamer passport data set, you claim ownership by minting it into a data NFT, which is…

Nick Abrahams:
Oh, okay.

Mark Paul:
Construct within Athium.

Nick Abrahams:
Right.

Mark Paul:
Right. So data NFT wraps ownership of your data, all right? So you own the NFT in your wallet. And that indicates that you own this data. And then the next step is now we’re heading into the third group of products Athium has. This is where it really gets interesting. Now you are at this point, owning your data. Now you need to enable certain things that get people to firstly, trust you. As an example, in web three, there is a lot of scam and lot of fraud and a lot of civil attacks. So we have a concept in Athium called NFMe ID avatars. And what this is is this is an avatar of yours. Think of it’s an avatar version of itself.

Nick Abrahams:
Okay.

Mark Paul:
And you can’t just mint it like you meant any other NFT.

Nick Abrahams:
Right.

Mark Paul:
There’s a certain governance that goes into minting it. So you have to effectively prove that you are not a bot. And then you get the ability to mint this. Now, the reason you’re doing all of this is because what we are trying to do is let you take ownership of your data, prove that you’re not a bot or trying to attack the system, and then own some identity, which is our avatar. And now we have a high value data set linked to an individual, even though we don’t want you to expose your entire data identity, we have some idea that you’re an individual and the next final step is the bulk trading of this data, right?

Mark Paul:
So you want to be able to bulk trade this data. And this happens through a data coalition DOW. This is the next concept that we have where you basically, people who have the gamer passport aligned to a single DOW. And the DOW now has delegated rights to bulk trade this data and share in the revenue that comes from it.

Nick Abrahams:
Right.

Mark Paul:
I have to point out, I know this sounds really complex from a user journey perspective, but this is all of this happens under the hood.

Nick Abrahams:
Right. Right.

Mark Paul:
Right. So from a user’s perspective, you are interacting with things that you are very familiar with.

Nick Abrahams:
Right. Right.

Mark Paul:
Yeah.

Nick Abrahams:
Yeah. Now I would imagine, yeah what will be critical is obviously a seamless user experience and but at its core, it makes sense. It’s the idea of, so you’ve got your personal information, which you claim you wrap it in an NFT, that’s your NFT or your NFMe, which I like. And then you effectively, should you wish to trade it, then you would sort of enable that to be traded as a particular category. I imagine that in the bulk trading that goes on, because my own information is not worth terribly much by itself, but large organizations will pay more money for bulk data. So, okay. So it truly does put the power or the control of our personal information back to us.

Nick Abrahams:
And it’s that sort of concept of digital twinning, whether, digital twinning of our gaming, what we do with our gaming and social media habits, as well as digital twins of health, I imagine, we can apply it same to finance as well. Can I ask, so the big issue with personal information is always how can people be comfortable that their data is safe? So do we get comfort around the encryption and the rigor of the smart contracts and so forth?

Mark Paul:
Yeah. Yeah. So the fact that we are focusing on personal information, we have to take this elements very seriously, right? So this is the reason why we, our first version of it stored everything on IPFS.

Nick Abrahams:
Right.

Mark Paul:
And then we were like, “Okay, probably not a good idea.” Because if we want a branch off into health and we store your health profile in IPFS, and you want to, at one point, forget yourself from the system, GDPR, it’s almost impossible in a peer to peer storage system. So then we came up with a concept of, okay, let’s do on-premise adapters. So in other words, you keep the data on premise if you have sensitive data, and then you just plug in to the rest of the functionality that we provide. In other words, the ability to tokenize data as a data NFT, as effectively creating a license to use, enabling royalties on retrades

Mark Paul:
So this is the protocol level concepts you can leverage, but the data itself never leaves your premise, right? That’s one item we looked at. Now, what we are working on right now is actually taking this a step even further. And this is the ability to enable access control using on chain conditions on the data set, which is encrypted per user. So, as an example, I am a gamer. I collect all this data. The moment I claim ownership of my data as a data NFT, it’s encrypted with a key that’s specific to me, not my wallet or anything, because I could lose my wallet. It’s an independent key that’s specific to me and access to this key is based on an on chain condition. So if somebody wants access to my data NFT, they need to buy it from me or take it into the Dow. And the fact that it’s in another person’s wallet, that person has access to the key to look at the data. So what we have done is we said that, okay, the ultimate view of this is every human who joins Etheum’s products or products built on Itheum will have a data set encrypted specific to them.

Mark Paul:
So even if a breach were to happen, it’s a complete gibberish of a data set because every single row… It’s almost akin to every single row in a database being encrypted in a different way. So this is of course something that we’re working on right now. But the initial version is we provide the option. If you want to protect your data, if you’re in healthcare, you don’t even leave it, you move it out of your premise. You give it on premise, but you plug into the rest of the tech stack that we provide and you can protect your data as you’re normally protecting your data right now.

Nick Abrahams:
Fantastic. It seems like this is a new paradigm, really, which I think if we think about what happens with our personal information right now is effectively we go to any organization’s website or wherever. And we put in our personal information and then pursuant to privacy regulations as obviously we have to consent to various things and click the I agree that we’ve read the privacy policy and agree with it, albeit that none of us have ever read any of those privacy policies, but we immediately tick that. So we don’t really know what we are signing up to in many of those privacy policies, unfortunately. And then that information goes to the organization. And then we trust, I guess, A, that they deal with it in accordance with the privacy policy. And B, that whatever we’ve agreed to in terms of the way they’re allowed to use it is fair and reasonable.

Nick Abrahams:
And we’re not going to get spammed from people we don’t know, et cetera. And so is the proposition that you are saying that [inaudible 00:26:16] hints to is where we come up to that I agree box. So we want to interact with a particular organization, be it a healthcare company, financial services, or game. So rather than that information, that being, I guess, subject to that particular organization’s privacy policy, the information will be made available pursuant to the terms of the smart contract that underlies my NFT. So if my NFT says this information, the smart contract, this information can only be used by this organization, can’t be shared, et cetera, is that where we’re headed to we get to dictate sort of more around how organizations can use our data?

Mark Paul:
Yeah. So the ultimate goal, let’s imagine a world with Itheum now as the core data protocol for the open metaverse is you as an individual go about your daily life, generating your petabytes worth of information that’s coming out of your daily. And you have effectively all of this is being per user encrypted, encrypted with something that’s specific to me. It’s been tokenized as individual data NFT. So if you think of your social data as one data NFT, buckets of data NFTs that represent different thing. And now is where the problem that you mentioned, right? Like at the moment in the world we live today, I use use a service. I agree to terms of use of an app or whatever I’m getting for free. I don’t read it. And my data is stored somewhere and sold to data brokers, right?

Mark Paul:
So data brokerage is a huge problem. It’s a $200 billion dollar industry in the world. Now what we are envisioning the future is individuals like you and me, we care about our data and we care about how it’s used, but it’s a very complex topic, right? So to try to simplify, who’s going to use it? How do I stop you from using it? How are you going to pay me for this? This is why we brought in the concept of the data coalition now. Data coalition’s job is to effectively, you can delegate this complexity too. You go ahead, collect your data, meet your data NFTs and your NFE to prove your identity. And then all you have to do is find a coalition that you trust.

Mark Paul:
And the reason you trust it is because it has open governance. It’s transparent. It has its chart on how it’s going to use the data, how it’s going to share its profits, and then you align to it and then let it trade your data on your behalf. If you don’t like it, exit any time, or you can, as of now, you can bring up a [inaudible 00:29:09] to have a no confidence word to get rid of them.

Mark Paul:
But if you really think about what Itheum’s is doing, and this was actually our first tagline before we changed, it was we are building the world’s first decentralized data brokerage platform. Because what’s happening right now in the world with centralized data brokers, trading your data in a $200 billion industry, we have created an alternate to decentralized tech to do it. The reason we don’t talk about this is because we find that it confuses people when we talk about decentralized data brokerage. So we’re trying to simplify the message a little bit, but from a technology standpoint, we have a built a mirror to what’s happening in the real world, but in a decentralized way.

Nick Abrahams:
Fantastic. It is a bold and exciting vision, Mark. I’m very, very excited about it. So what’s next Itheum. So you’ve got the gamer passport coming on. You’ve got the Romanian partnership work. What are sort of the next steps?

Mark Paul:
Yeah, in the last four weeks, we’ve announced three partnerships. In the next three weeks, we are going to announce another three partnerships. So we have no shortage of people who want to try this tech out, but we are the first to acknowledge that what we are doing is super ambitious, but we are also very pragmatic. That’s why we are approaching it as let’s get the gamer passport out next month. Next month, you’re going to see the tech. You’re going to be wowed by it.

Mark Paul:
The month after that is going to be huge when we release the NFT ID avatar, and we are going to have whitelisted minting. In other words, you could, as an individual apply to get whitelisted to mint your metaverse avatar. And yeah, it’s basically our strategy is pilot partnerships. So in gaming first, health with the Romanian company. We have one that’s very exciting in Metaverse eCommerce. So they have already doing retail in Metaverse, taking a same tech stack and then putting it in these different sort of verticals is something that gets us very excited.

Nick Abrahams:
Terrific. Well, thank you very much for sharing the Itheum story so far, Mark. It’s a fantastic vision and wish you all very best with it. And thanks for very much for being on the show.

Mark Paul:
Thank you for having me. That was a great conversation.