The Information Trust Problem
Tags: Icommerce, Blockchain, Marketplaces, Ecommerce

Information is one of the most valuable things on earth. It starts wars, saves lives, and gets spread and shared on a daily basis as knowledge. Yet information is one of the last commodities that is not openly available to buy and sell in internet marketplaces.

The reason for the disparity between physical goods and information markets is that information is easy to manipulate and can be hard to trust. Information is not valuable unless it is authenticated.

In the primitive information marketplaces we have today, that information must always be authenticated by trusted third parties. Groups like Dun and Bradstreet have made a titanic fortune building a reputation for trustworthiness, and their position as an information oligarch hasn’t been significantly challenged. The necessity of such a middleman, however, increases cost dramatically and makes information sales slow and inefficient.

Let’s take an example and see how it would enter the marketplace in a third-party authentication model. Suppose you had a list of people who had expressed interest in purchasing workout supplements. This information had been gathered by a marketing firm in an effort to market their information to supplement suppliers. Now, supplement suppliers would have a monetary interest in this list of names and email addresses being legitimately acquired and useful to market to.

In the old schema, a third party would acquire this information from the marketing firm for free, and would even be able to charge that firm a fee for authenticating it. And what would the third party really do? They would possibly verify that the people on the list were real people, and that the email addresses worked. That’s it. Going further to verify that these people had interest in workout supplements would be a terribly expensive add-on to the verification process and would likely not be something that would be included in the verification process. So what supplement vendors would be paying for is simply the third party’s assurance that the list of names and email addresses were real people.

But the third party verifier would be in possession of this information in total. They would continue to possess this information after a supplement provider had already purchased it. They might even sell it to multiple customers in an effort to maximize revenue, which would necessarily damage the value of the information — as more parties have access to the information, the less the information is worth.

The need to keep the information out of the hands of multiple parties is based on the principle that the fewer hands the information is in, the more valuable the information is. This is where the concept of zero-proof authentication comes in, and it works like this:

Instead of submitting that batch of information to a third-party verification firm, the marketing company submits the list to an anonymous network of multiple verifiers, each member of which gets a small chunk of the information batch, with a simple question attached to the chunk. More specifically in this case, the verifiers would each receive a small batch of names and email addresses, with the question “could this list of names be associated with this list of email addresses?” with a simple yes/no schematic. If the verifiers unanimously agree that the information chunks are all authentic, then the entire batch is automatically marked authentic and the system marks it good for market.

The benefit of zero-proof authentication is clear: without a centralized third-party in possession of the information, the information is 1) less expensive for the purchaser and 2) more valuable in the aggregate.

Now that blockchain technology is starting to mature, such information marketplaces are more than just a conceptual fantasy. AtlasChain, the world’s first i-Commerce platform, uses just this method for authenticating all sorts of information bundles. The possibilities are endless.