Fysical is a decentralized market for location data. The project is code-complete and is already marketing collected data, like foot traffic and store visits to its clients. The company estimates that it sells over 15 billion data points each month.
“Fysical allows data suppliers to share and monetize their location data, while maintaining transparency, ownership, and control,” according to the development team. “At the same time, Fysical provides data buyers with the optimal way to access and validate data and its sources.”
The market is tokenized via Fysical’s FYS token. Though the ERC20 token is not yet live, an initial token sale is slated for mid-June. The price of the token will be pegged to a fixed Ethereum price.
How Does It Differ from Centralized Data Exchanges?
Fysical maintains that current geographical data are hoarded by centralized providers who charge high rates to collect data in an inefficient way. These centralized providers also lack transparency in how data are actually collected and distributed. Fysical’s blockchain system leverages the inherent strengths of blockchain technology when it comes to parallel processing and information distribution to make the market for location data more democratic and better at its overall job.
Fysical also claims that its blockchain network democratizes the very production of location data. Because barriers to entry are significantly lowered by the presence of an easily accessible blockchain system, low-level data providers can upload their proprietary data and shop around on the open market without having to go through a large conglomerate. Essentially, the economies of scale that currently dominate geospatial location data are eliminated by giving each data provider an equal spot on the blockchain in terms of client access. Likewise, clients can pick from the data provided instead of paying for large packets of possibly irrelevant data. This data buffet allows custom packages to be tailored from the client side instead of bulk packaged by the data provider itself.
Why Are Location Data Valuable?
Location data act as a lubricant for business operation and strategic marketing campaigns, so it possesses value on several different levels. Hard data on foot traffic or customer behavior can be used to tweak operational performance. For instance, if the location data appears to show heavy pedestrian foot traffic during evening hours, it might make sense to keep a business visible to that foot traffic open later than usual.
It can also be used to create targeted marketing campaigns. If the location data from a given area appears to show a preference for a certain product or service, it makes sense to offer that product or service somewhere in the general vicinity. Location data, in essence, put a digital face on demographic data to show how prospective clients are interacting with the market in real-time. Location data also have potential applications in the autonomous vehicle industry. Autonomous vehicles rely on large amounts of location data to adjust vehicle performance and actual driving. This can include road conditions, traffic patterns, traffic signals, and more.
How Does It Work?
Fysical’s FYS tokens act as a utility for moving data around on the blockchain and provides a medium of exchange for both buyers and sellers. The tokens are exchanged via atomic swaps, which are a modified form of smart contract that either fully executes or fully aborts, depending upon the conditions set by the prospective buyers and sellers.
“The use of FYS tokens also provides numerous advantages over the traditional means of exchanging data; some examples include: verifiable audit trails in the form of factual records of transactions, reliable market participant reputations, the real-time trade of data, a global market rate for location data to enable efficient international data trade, and incentives for data suppliers who are often also date buyers on Fysical,” the team stated in Fysical’s white paper.
How Does the Exchange Work Across National Borders?
Location data, despite its necessarily local focus, has value on an international scale. It might be useful for a multinational company to learn what exactly its prospective consumers are up to on the other side of the globe before building a new factory in the region or releasing a targeted marketing campaign. Traditionally, buying data across national borders involved exchanging the data along with native currencies. As with any cross-country transaction, these data transactions were subject to currency exchange rates and potential slippage. With low margins for data that may not turn out to be useful in generating a profit, it’s essential to keep the overall cost of data as low as possible.
“For the first time, the value of location data will be expressed as a utility with worth that is determined solely by free market conditions of the location data trade,” the developers said. “By utilizing the FYS token to purchase data, international businesses express trade conditions in identical terms and enable transactions that otherwise might not have occurred.”
To illustrate, the team offered the example of a U.S. business who wishes to buy a data set in U.S. dollars one day and sell it in Yuan the next. The margin profit of that data set could easily be lost in the conversion of U.S. dollars to Yuan.
The risk is compounded by the growing presence of the so-called Internet of Things, in which machines conduct data transactions between themselves without human input – and potentially without regard for very human concerns, like profit margins.
“Accounting for this risk becomes more important as machines and automated systems begin buying location datasets,” the team explained. “That is, by expressing trades in the same currency, exchange rate risk doesn’t exist, and machines and autonomous agents are free to purchase data at the global rate when they need it.”
How Many Data Providers Does the Market Have?
As of June 2018, Fysical boasts more than 1,000 separate data providers. The more than 15 billion data points collected each month are bought by a pool of about 20 buyers.
As an example of the kind of live data that can be collected and bought, Fysical conducted a foot traffic survey of the November 2017 Blockchain Expo North America event in Santa Clara, California. The results of that case study are available on the Fysical website as an example of the kind of data that exchange users can purchase or provide.
Fysical has not yet held its token sale, which is slated for June 16–21. During the sale, the team plans to sell about 40 percent of the total supply of 1 billion ERC20 tokens at a rate of 1 ETH for every 18,888 FYS tokens. The ETH price, in this case, is pegged at $850.
Who Is the Team Behind Fysical?
The CEO and co-founder of Fysical is Ben Smith. Smith resides in Singapore, Fysical’s home base, and previously worked with SunGard Financial Systems. The company’s chief technology officer and fellow co-founder is John Livingston Foley III. Foley previously served at Zoom Telephonics and TimeTrade Systems Inc.
Where Can I Learn More?
You can visit the Fysical website here.