Accounting Technologies for Anti-Rival Coordination and Allocation

The data markets and markets for other digital goods are failing

At the same time, Distributed Ledger Technology (DLT) has been suggested as a means to create new value and new economic structures. However, the underlying economic phenomena, especially the structural characteristics of the traded digital goods, are poorly understood.

For over half a century, economists have made a distinction between rival and nonrival goods.

Rival goods lose value when consumed, while nonrival goods may be used repeatedly, without losing value. In Nobel laureate Elinor Ostrom’s terms, the value of rival goods gets subtracted upon use; their subtractability is positive.

But, during the last two decades, there has been increasing indications that many information and digital goods are anti-rival in nature. Anti-rival goods gain value when used; their subtractability is negative.

Therefore their economics is also fundamentally different from that of rival or even nonrival goods. Firstly, full social allocative efficiency of anti-rival goods cannot be reached within current economic structures and institutions. Secondly, creating a market price — or, more precisely, open market valuation — for them requires, beyond open markets, additional regulative or technological constructions, such as intellectual property (IPR) or digital rights management (DRM), in addition to the market mechanisms.

We believe that this structural and institutional disparity is a root cause for the market failures in the digital goods and data markets, behind the advent of social media monopolies, poorly working or nonexistent markets for industrial data, and many existing data markets (such as municipal ones) reducing to effectively near-zero price.

In ATARCA, we will create Bitcoin-like but anti-rival cryptographically protected tokens and test their applicability to governing industrial data markets on one hand and fostering cooperation in community driven currencies on the other hand, aiming towards removing the market failures in the long run. If successful, this technology will not only help to properly organise the markets for data and other digital goods, but provide the structural fundamentals for a new type of economic growth. This baseline will allow the societies at large to more widely explore structurally new incentives for systemic sustainability and scalable systemic intelligence.

Objectives

Our vision is to create new decentralised technology, “anti-rival tokens,” and scientifically founded proposals for new policies to enable efficient, decentralised, market-style trading and ecosystems for anti-rival goods.

Excellence

Coordination of action and resource allocation is one of those traits that make us human. The global economy is our largest technology-enabled coordination system. As a result of the universality of ICT, and especially of internet and decentralised technologies, we are able to coordinate our economic activities in a far more dynamic and efficient manner than ever before. This has led to unprecedented efficiency, but also unprecedented brittleness on the global scale, as the ongoing COVID19-pandemic has amply demonstrated. 

The foundational structures of our economy are still based on concepts that far predate the modern era. The roots of accounting can be traced back some 5000 years to Mesopotamia. Ownership and private property have descended from Roman patria potestas. Money and banking are very much the same as in the original double entry and fractional reserve models in renaissance Italy. Even the words for bank and bankruptcy come directly from the bank teller working behind a banca — a bench. The banca was ruptured on insolvency. Even the cryptocurrencies are based on the same concepts: ownership and exchange.

With ICT, the potential ways to coordinate have proliferated. However, there has been surprisingly little work on systematically studying on what would be the most efficient ways to organise and institutionalise such coordination of digitally conducted activity and related digital resources. Many of the main street economists have the position that the current means are sufficient and the best approach.

Our project, ATARCA, starts with respectfully disagreeing with this notion. As our early work strongly indicates, the economic structures and institutions need a fundamental reform to fully leverage ICT and digital resources.

The ATARCA project is designed to create a scientific foundation for anti-rival compensation and governance technology. Through participatory design, prototyping and intervention based action research, and data analysis, we will design, implement, and deploy initial anti-rival systems, and analyse their initial effects.

ATARCA has received funding from the European Union’s Horizon 2020 research and innovation programme. The content of this website does not represent the opinion of the European Union, and the European Union is not responsible for any use that might be made of such content.