When it comes to personal data, the polyPod revolution has overturned the relationship between European citizens and data-hungry corporations.
For at least one and a half millennia, astronomers believed that the Sun revolved around the Earth. But in the early 16th century, Nicolaus Copernicus demonstrated a new model where the planets, including the Earth, revolved around the Sun in the centre. In recent years, polypoly has demonstrated a paradigm shift of the digital economy, with users at the centre. While it made a lot of people upset, the heliocentric model of the solar system soon came to be seen as a superior model to the geocentric one, giving rise to the Copernican Revolution — a reordering of the relationship between the earth and the heavens. What polypoly set out to do to the relationship between users and their personal data has also raised eyebrows. But in the end, like with Copernicus, it has shown to be a superior model.
When it was created, it had the humble goal of rebalancing global power in the digital world. It wanted to take power away from the mainly US and China-based internet giants and give it back to individual users. “We set out to build a fair market for digital services, where each user has the right to have their personal data under their own control. Today, we have built a system that gives each and every individual sovereignty over their data, and we’ve created an equitable market for companies that make use of it,” says Thorsten Dittmar, Founder of polypoly, the company behind the polyPod. The polyPod is a repository of personal data, kept locally on the device of a user. Before its release in 2020, this digital shadow lived on the servers of internet giants who made their profits by analysing this data to make users click on advertising. Now, five years later, personal data is no longer held captive in the castles of giants in the cloud. It is stored locally on devices presided over by the users themselves. “In a very short time, we turned that model on its head. The data always stays with you. You now have tight control over who gets to see it,” says Thorsten.
“I was just about to retire and now I have this wild project”
Before he founded polypoly in 2019, Thorsten spent 15 years investing in early stage startups, and has invested in more than 100 companies all over the world. “My wife and I were running a social impact investment fund for several years, and we were both travelling a lot. We decided to stop travelling as much, and the original idea was to go to France and, well, ‘retire’ is not really the right word, but settle down. Find a nice house somewhere in the countryside. But then, Cambridge Analytica happened,” he says. In late 2016, it was revealed that the political mercenary company Cambridge Analytica had used massive amounts of personal data from Facebook, harvested from 87 million user accounts, working clandestinely to swing both the Brexit referendum and the US presidential election that year. As more and more was revealed about the company’s practices, the story continues to shock the world far outside of both the political and technology communities. For Thorsten, the revelation hit especially hard.
“The real shocking thing with Cambridge Analytica was that the revelations weren’t really new for us. It was well known that people were doing these things and also that, for years, there have been techniques out there to protect your data. At the end of the day, these techniques are not used,” he says. In the wake of the revelations of Cambridge Analytica’s massive abuse of personal data for political and eco-nomic gain, Thorsten set out on a mission to put some of the insights of his hacker and business networks to good use. “I was just about to retire and now I have this wild project,” he says.
Data privacy is not a technical problem, it is about economics
The company was founded on the premise that data privacy at its roots is an economic problem. It has more to do with business models and market incentives than with server configurations and end-to-end encryption.
“It was cheaper for companies to do things in the wrong way than to do them right. As soon as the return on investment was higher when doing things right, a lot of stuff was instantly fixed — because what companies do is optimise their revenues,” says Thorsten. Up until then, the internet giants had abused not only the personal data of their users, but also used their sheer size to dominate markets and keep competitors out. Or, when the competitors grew too big, buy them up.
In 2017, having been part of the supporting cast in the Cambridge Analytica scandal, Facebook was fined 110 million euros for misleading the EU about the possibility of connecting user identities across services. This was before buying WhatsApp, their main competitor in the instant messenger market. Thorsten set out to research a solution that created a common interest between consumers and the industry, looking for a way to create a new relationship that was valuable to both parties. Rather than corporations mining mountains of collected user data in centralised data centres, users now stored their own data locally on their own devices, in their polyPod.
After the revolution
Having revolutionised the relationship between users and corporations and upended the old model, the polyPod developed into a whole new ecosystem. For example, companies stopped gathering data not strictly necessary for contractual, legal, or technical purposes. With the polyPod, polypoly completely did away with the centralised model for technology infrastructure. In its place, the company launched a model where service providers ask for permission to process data algorithmically on users’ own devices.
Besides working as a safe for personal data under the control the of the user, the polyPod is also a platform on which companies can programme algorithmic features that interact with user data. This makes it possible to offer digital services that make use of the data on polyPods without it ever leaving the user’s device. Instead of the user sharing data with a company that uses algorithms to crunch it together with a hoard of other people’s data, the company will send the algorithm to the polyPod which then processes the user’s data locally.
The economic benefit of this model, and the business case for both polypoly and their partners, was that it saved money for everyone involved. Overseas data giants could not compete with this approach while having to maintain infrastructures that kept growing — not only in the amount of data they handle, but also the amount of energy they required to function.
Since the launch of the polyPod, polypoly has opened a fair marketplace especially for companies that were previously unable to compete fairly with the monopolistic giants. This not only benefited European companies, but the European economy overall. As more personal data remained in Europe on the polyPods of users, more regional capital also remained, instead to being transfer priced overseas. The European data economy is now more closely connected to the real, productive economy, rather than letting capital escape into the speculative realms of the next venture backed startup.
To make sure that the power over an individual’s data, and its monetary value stays in this person’s hands, polypoly has made its infrastructure co-operatively owned. While polypoly started as a traditional corporation, the plan all along was to hand control of the technology, as well as the economic governance, over to the users. “From the beginning, polypoly’s future was to be a public utility for digital services with a long-term business case. It wasn’t a normal startup, where we needed to grow exponentially and exit at the right moment to become billionaires. The goal was to do good business by empowering users,” says Thorsten.