Data is an extremely valuable asset in today’s economy. It’s estimated that the total value of consumer data that has been generated exceeds $1 trillion.
Marketing companies buy data from data providers to advertise their products towards more specific consumers, and it’s never been easier for companies to collect data from platforms like Facebook, Microsoft and Google.
Ocean Protocol (OCEAN) tokenizes consumer data on the blockchain to allow for safe and secure data usage. The protocol has created a decentralized marketplace to transact data while holding it securely on its network.
What is Ocean Protocol?
Ocean Protocol is a market for data that operates in the decentralized finance (DeFi) industry. The protocol operates on Ethereum’s blockchain –– Ethereum is the largest network for developing decentralized platforms through smart contracts.
Smart contracts are code that is uploaded to the blockchain, but what makes the code unique is that it can hold cryptocurrency assets in escrow.
Making data an asset class is Ocean Protocol’s goal. On the marketplace, users can buy and sell data. There are many large institutions that buy data, some of which include:
- Artificial intelligence companies use data for training programs.
- Research institutions use data for various research studies.
- Marketing companies buy data to determine consumer demographics.
But what prevents these companies from selling your data to other companies after they’ve analyzed it? Ocean Protocol keeps tokenized data behind a firewall, and the platform runs data analysis as a 3rd party. The company buying the data never actually sees your data, rather it benefits from the outcome of the data analysis.
Brief History of Ocean Protocol
Ocean Protocol was founded in 2017 by Bruce Pon and Trent McConaghy. Before they founded Ocean, Pon started BigChainDB, a blockchain database company, and McConaghy worked as an AI specialist. Artificial intelligence is predicted to be the biggest buyer of data, so McConaghy’s background is relevant to the platform.
The Ocean Token had its initial coin offering (ICO) in May 2019. The token was 1st put on sale for 19 cents, and it’s currently trading for around 91 cents. These are good returns, but they don’t beat the returns of Bitcoin or Ethereum in the same timeframe.
It’s also important to note that the maximum supply of Ocean Tokens is 1.41 billion, and only 419 million are in circulation. This makes the token more at risk for inflation than other cryptocurrencies on the market. You can earn Ocean Tokens by providing and curating data, or by acting as a node in the network.
Step 1: Open an online account.
In order to buy your Ocean Tokens, you need to open an online account with a cryptocurrency exchange or brokerage that supports it. Since Ocean is an Ethereum-based token, you could send them Ethereum to a decentralized exchange to convert your crypto to ocean directly from your software wallet. The most popular decentralized exchange on Ethereum is Uniswap.
If you don’t already own any Eth tokens, you’ll need to make an account with a crypto exchange. The most well-known exchange that supports Ocean Protocol is Binance. To open an online account with Binance, you’ll need to provide them with personal information to comply with the IRS, similarly to stock brokerages.
Binance is the only exchange in the U.S. that trades over a million dollars of volume per day in Ocean Tokens. If you’re using a centralized exchange, you should use Binance to make sure there is enough liquidity to efficiently trade Ocean.
Step 2: Buy a wallet (optional).
You shouldn’t keep your crypto assets on an exchange due to the risk of being hacked online. Instead, transfer your Ocean Tokens to a hardware wallet or a software wallet.
Both are good options, but hardware wallets are the most secure because they store your cryptocurrency offline on a physical device offline. Since hardware wallets aren’t connected to the internet, hackers have no way to access your crypto funds.
Best Hardware Wallet: KeepKey
Keepkey is a hardware wallet that is simple-to-use and cost-effective. It’s about the size of a thumb drive and connects to your laptop or computer through a USB port.
Keepkey also shows you a one-time recovery phrase when booting up your wallet –– you’re able to use this to recover your cryptocurrency if the hardware wallet is physically lost or stolen.
Best Software Wallet: Argent
Since Ocean Token is an ERC-20 token, you can use any Ethereum software wallet to store your tokens on. There are a ton of options on the market, and most wallets are free-to-use. Argent is a great Ethereum wallet because it has many unique features like social recovery and DeFi integration.
Argent lets you interact directly with DeFi protocols on Ethereum’s blockchain. The main function of this is to earn interest on your crypto assets directly from your wallet. You’re able to stake the funds in your wallet on Compound, Uniswap or other DeFi projects to earn interest on your tokens.
Generally, losing your crypto wallet’s private keys makes your funds inaccessible. However, Argent has a unique feature called social recovery which allows you to assign guardians to your Ethereum wallet. Guardians can grant you access to your crypto wallet in case you lose your private keys.
Step 3: Make your purchase.
After choosing where to store your Ocean Token, it’s time to make your purchase. On centralized exchanges like Binance you can place an order as a limit order or a sell order.
Market orders will purchase Ocean instantly at market price, but limit orders will only be filled if a sell order is inputted at a specified price. If the price of Ocean doesn’t decrease to the price you specify on your limit order, it won’t be filled. If you decide you no longer want your limit order to be filled, you can cancel it any time before the market price reaches your limit price.
Trade or Sell Your Cryptocurrency
Unless you use a decentralized exchange, you can’t sell your cryptocurrency from your crypto wallet. You’ll need to transfer your crypto back onto an exchange that supports Ocean, and then you’ll be able to sell your tokens as a market or limit sell order.
Argent is unique because it lets you interact with DeFi
Current Crypto Prices
As of February 2021, the market cap for all cryptocurrencies surpassed 1 trillion dollars for the first time in history. Cryptocurrency prices have been extremely volatile, so it’s a good idea to keep an eye on the market for buy opportunities.
Here’s a list of some of the top cryptos by market cap, so you can get an idea of how the markets are moving.
Ocean Protocol’s Outlook
Ocean was the 1st DeFi protocol to create a market for data. Most data today never gets analyzed, yet the value of data is estimated to be trillions of dollars. If Ocean is able to capture even a fraction of the market share for big data, it could become an extremely valuable cryptocurrency.
The protocol is still extremely young, and the concept of a decentralized marketplace for data has yet to be proven at scale. Competitors are also emerging on more scalable blockchain networks like Datapace on Hyperledger.
If Ethereum fails to upgrade it’s network to solve its scaling issues, decentralized marketplaces like Ocean would be unlikely to succeed.
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