In ancient times, everything from salt and peppercorns to sea shells and dolphin teeth were recognized forms of currency. By today’s standards, these border on strange, if not bizarre, ways to pay for something.
However, in the most basic sense, a currency is really nothing more than something that a group of people agree has some value. Loyalty points and frequent flyer miles are forms of currency. So are baseball trading cards. Barter deals, which are often used for convenience or to avoid taxes, are also a form of currency.
Of course, in the digital age, the concept of currency is changing. Bitcoin has become a poster child for digital interaction. And computer games, such as World of Warcraft and League of Legends, use their own forms of digital currency.
Today, a far more powerful form of digital currency is radically redefining business and IT. The currency? Data.
Obviously, companies now buy, sell and trade data like wampum beads. As the Internet of things and big data take hold, data points are proliferating, and the value of data is growing seemingly exponentially.
A 2013 paper from Deloitte University Press, “Data as the New Currency,” reported that 90 percent of the world’s data has been created within the last two years. Between then and 2020, the global volume of digital data is expected to multiply by a factor of 40 times or more.
All of this is spawning an array of data aggregators, service providers and data protectors. It’s also introducing new concepts, such as data philanthropy.
“The market continues to evolve, and new approaches have emerged that more efficiently store and process data, while also providing access to those that need it to analyze it and gain business insight,” noted Matt Aslett, research director for the Data Platforms & Analytics Channel at 451 Research. In fact, the technology forecasting firm predicts that the total data market—consisting of data platforms, data management and analytics—will nearly double in size between the end of 2014 and 2019.
Not surprisingly, cyber-thieves have also taken notice. A new report from IBM and the Ponemon Institute, “2015 Cost of Data Breach Study: Global Analysis,” points out that the average cost of a single lost or stolen record containing sensitive information swelled by 6 percent over just the past year, from $145 to $154. Moreover, the average cost of a data breach has increased 23 percent over the last two years, to $3.79 million.
To be sure, the data economy has arrived. So it’s wise to put your money on data.