Full disclosure: This article is not intended as investment advice. It is just my personal opinion about Covalent Protocol. You should always do your own research #DYOR. I am part of “the article group”, which rewards me for writing this article and encourages me to express my own opinions.
In my previous article I wrote a detailed overview of the Covalent Protocol project and in this article I want to go one step further and discuss several possible use cases of the Covalent Protocol. However, before we get to the use cases I first want to explain what Covalent is all about.
In 2017 a total of 22 zettabyte (ZB) of data was created (1 ZB = 1,000,000,000,000 gigabytes); yet only 1% was actually being utilized. Several reasons exist why this percentage is so low, but perhaps the biggest reasons are: 1) privacy, data owners are hesitant to trust third parties with handling their data and 2) a value network is lacking, which would incentivize data owners for sharing their data.
Covalent aims to tackle the above problems by leveraging the power of blockchain technology and building a privacy-protected, decentralized computing platform and protocol, that is able to extract/analyse specific information from data without compromising privacy. This means that via the Covalent protocol data owners stay in control of their own data and are able to specify which particular piece of data they want to share and with whom. Since the use of data is traceable on the Covalent network, data ownership guarantees that data owners are fairly compensated at every stage of the dissemination and usage process. So now that we have a decent understanding of what the Covalent project tries to do, we can look at some of the potential use cases of the Covalent Protocol.
Let’s assume that data about your medical condition exists and that you wish to share this data for research purposes. However, you want to share the data without compromising your privacy and you only want the data to be used for one specific research project. How do you know that the research institution is not re-using or even re-selling your data? Can you trust this third-party with handling your data?
To solve this problem, Covalent has developed a decentralized application (DApp), on top of the Covalent protocol, called Medata. Medata acts as a medical data marketplace, where patients can specify which data they want to share and how this data can be used. When a researcher requests a dataset, only the relevant patient data is selected and anonymized or aggregated (so the values can no longer be traced back to one individual). The researcher can then use this dataset to analyze/run prediction models in order to answer his/her research questions. Through the use of smart policies (which are similar to smart contracts), the Covalent Protocol guarantees that data can only be used for that specific research project and not be redistributed to other parties. In addition, the patient also gets rewarded in Cova tokens (the token that drives the Covalent ecosystem) for sharing the data.
In short, the researcher benefits by gaining access to large amounts of previously untapped data; whereas the patient gets to help advance scientific research without their privacy being comprised, whilst also being rewarded for sharing his/her data. Hence a win-win situation.
Have you ever felt reluctant to share your credit card number with a third-party (I know I have). With the current system we have no clue what third-party companies do with our credit card information. For all we know, they may re-use or re-sell our credit card information and before you know it, it could be used by someone else without your permission. The Covalent Protocol provides a solution to this problem. By utilizing smart policies, the Covalent Protocol can enforce that your credit card number may only be used once for a one-time charge and be erased from the server after the payment is completed.
Let’s assume that you have written a great new story and that you want distribute your literary masterpiece online; but you want to keep it exclusive and only allow it to be shared 100 times. With current technology this will not be possible, since everybody could just replicate the document redistribute its contents. However, by utilizing the Covalent Protocol it is possible to set up a smart policy that keeps track of how many times a certain document is shared and block the sharing option when the number of shares has reached 100.
So there you have it, three potential use cases for the Covalent Protocol. This is by no means an exhaustive sample of all the possibilities that the Covalent project offers in terms of data sharing and data control; but I wanted to provide a small indication of the power of Covalent and how they envision to disrupt the existing data industry by building a privacy-protected, decentralized computing platform and protocol.
Sources for more information on Covalent:
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