Author: claire

While the global economy is increasingly centered around data, the data economy and markets remain flawed. We still depend on centuries-old assumptions of scarcity that do not hold for digital goods, which are abundant. The H2020-research project ATARCA suggests that many digital goods are anti-rival by nature: they gain value the more they are shared. Therefore, they fundamentally challenge current economic structures and institutions. Anti-rival goods also pose untapped potential for more sustainable socio-economic structures, such as local cooperatives. However, current economic and political structures and institutions are not prepared to handle anti-rival goods. That’s why we gathered around 30 researchers, policymakers and experts to the first ATARCA Policy Observatory session on 25 November 2021 to discuss these issues. 

Three lighting talks provided inspirational openings on fundamentals of anti-rival goods, practical experimentation with them and how the current European policy landscape facilitates this.

Dr Sonja Amadae, the Co-Principal Investigator of ATARCA discussed the project’s anti-rival use cases and defined their policy implications. Dr Amadae highlighted how the concept of anti-rivalry can enable data sharing for a greater purpose: for example, environmental sustainability in the food supply chain. She introduced ATARCA’s Food Futures Index, a self-curated database that gathers data on food production and its impact on air, water, nutrition, and animal welfare. The FFI supports more informed decision-making on sustainable food consumption by consumers. It also incentivises user contributions to the index through tokens earned for positive impact, which can potentially be turned into environmental certificates, discounts or subsidies on a community level.

Jordan Hall, founder of multiple disruptive technology companies and decentralised governance expert, underlined the transformational nature of anti-rival goods. He argued that anti-rivalry is not an invented concept but something that exists naturally in reality—just like rivalry and non-rivalry. Despite this, society is not entirely ready to accept anti-rivalry yet; this requires a profound shift. He likened this shift to riding a new type of bicycle: we must accept that we will fall but we have to keep trying. The central question is: what does it mean to cultivate anti-rival relationships?

Dr Joachim Schwerin, a Principal Economist in DG GROW, Unit G/3 Digital Transformation of Industry, shed light on the EU Commission policy perspective on the token economy. The decentralisation of data requires a whole new approach to policy and regulation. Emerging Commission policies, such as MiCA (Markets in Crypto Assets), support regulatory sandboxes to foster innovation in distributed ledger technology (DLT) such as blockchain. In a nascent field like this, policymakers must look at local projects, like REC, to further their understanding of the needs that arise. The need for experimentation is also reflected in the emerging understanding of the nature of data, spearheaded by policies such as the GDPR that aim to empower citizens to control their ‘own’ data. To end, Dr Schwerin called for a need to keep the approach radical as ATARCA moves forward in experimenting with digital assets.

Challenges of the data economy

These insights and the following discussion eased the participants into group work on the current challenges of the data economy:

First, many of the identified challenges gravitated around artificial scarcity, in other words trying to apply existing economic logic to data and other abundant anti-rival goods. Anti-rival resources are unlikely to be governed well with systems used for scarce resources. Paywalls in news sites were raised multiple times as examples of digital product features that artificially create rivalry to fit the existing economic paradigm.

Second, the anti-rival goods connectedness to other digital technologies emerged in the discussion as one of the key points. Anti-rival innovations and decentralisation are tied to other emerging initiatives—like ethical and transparent data, trustworthy AI and privacy preservation techniques. Similarly, anti-rivalry is linked to data portability, missing incentives to share data (while also considering privacy and inclusion of marginalised citizens) and technological investment for these purposes, especially within SMEs. Due to these parallels, one has to look at anti-rivality holistically, not merely focusing on blockchain-specific policies like MiCA.

Third, existing cultural norms, expectations and conceptions of data arise as one of the central challenges. Participants noted that data and tokens are a residue or historical record of action, thereby putting the focus on anti-rivality of the underlying action. Decentralised systems function quite differently from the current centralised ones, making decentralised solutions difficult to implement. This mandates a shift in mindsets. Moreover, even in the Blockchain space, the discourse revolves around Bitcoin and ETH mining, overshadowing new protocols and advancements such as Proof of Elapsed Time.

Anti-rival opportunities to solve the challenges

In the group discussion, many participants focused on how the tragedy of the commons could be alleviated—especially in the case of environmental degradation. Anti-rival attestation systems like open CO2 registries or markets could increase transparency through decentralised records based on DLT, thereby helping to tackle climate change while empowering local communities in the process.

Some participants considered DLT-solutions an anti-rival technology per se because of its decentralised nature, while others were more sceptical of the whole concept: data-driven business models are founded on scarcity, and data sharing removes the incentives to provide service at all. To what extent can anti-rival thinking challenge monopolies or escape the existing rival practices?

Implications for policies

According to the workshop participants, one of the possible policy implications of anti-rival technologies could be tax reform. As anti-rival economies and non-payment currencies expand, they challenge the current national taxation systems by legitimising the informal economy. The existing policy regimes cannot keep up with disruptive technologies, so governments need to adopt a vision-driven approach to applying DLT rather than purely reactive regulation. For example, they could first identify existing social problems that blockchain can solve, for example by fostering local data commons and currencies and only then building a political strategy to that end. Governments could also prioritise funding (e.g., through Horizon Europe) that focuses on the ‘evolvability’ of technological systems by the users themselves.

Finally, the discussion illuminated ATARCA’s links to existing EU priorities, such as bolstering data economy and data sharing. Better sharing of industrial data within the single market is already one of the main goals of policies such as the Data Governance Act, yet the incentives for such altruistic sharing are still largely missing. This is where the anti-rival goods and economy can play an important role. This was also echoed by J. Scott Marcus, a Senior Fellow at Bruegel, who in his closing remarks drew parallels between anti-rivalry and concepts of conventional economic theory such as network effects and natural monopolies. Traditional economics can teach us a great deal about anti-rival services, such as how to approach the adoption curve, tendency to monopoly and network effects of platform companies.

The ATARCA Policy Observatory brings stakeholders together to explore anti-rival economics

The disruptive potential of anti-rival economics and tokens need to be explored through extensive stakeholder engagement. The ATARCA Policy Observatory sessions aim to create and share policy understanding of anti-rival economics in the context of data economy and tokens. The process consists of four Observatories that address different dimensions of ATARCA’s core questions:

The session marked the first observatory session of ATARCA, but the work continues. Through the observatories, we will keep exploring opportunities of anti-rival goods to support building fairer and more sustainable socio-economic structures, and identify the required policies and changes for anti-rival governance to foster economic development. The process will result in concrete policy recommendations.

We wish to thank all the participants and look forward to seeing you in future Policy Observatories!

Anna Björk

Johannes Mikkonen

Atte Ojanen

Claire Shaw

Katariina Viljamaa

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Accounting Technologies for Anti-Rival Coordination and Allocation (ATARCA) focuses on technological development and use cases for anti-rival tokenism. It aims to discover new ways to organise the digital markets, which have been failing because we have been busy organising them around the established categories of economic thinking. This is however an insufficient approach to understanding and realising the potential of digital markets since they open up new horizons and logic for human economic interaction and behaviour.

By Claire Shaw, Aalto University

The concept of a digital citizen remains somewhat contested, depending on who offers the definition. In the beginning of discussions on digital citizenship, the emphasis was placed on access to the internet and the skills to use it. As internet access has become more prolific, more recent discourse instead focuses on how digital citizens use the internet. In this view, a digital citizen actively takes part in the online world, building connections in a respectful and responsible way.

With the rise of AI, decentralized platforms, and distributed ledger technologies, the shift into Web 3  requires the next iteration of digital citizenship. Web 3 (also known as Web 3.0) calls for a more transparent and equal internet built on collaboration and trust. A digital citizen in this context, then, holds three characteristics:

(1) has the skills to use the internet,

(2) uses it responsibly and respectfully (e.g., no trolling), and

(3) actively contributes to digital communities while critically reflecting on the benefits and risks of participation.

In this way, a Web 3 Digital Citizen does not necessarily have a political affiliation, but is a citizen of a digital community that can be local or global.

Anti-rivalry, while a somewhat new concept, offers an understanding of data that supports the development of digital citizenship. Anti-rivalry refers to the property of goods that increase in value as more people use it (consider, for example, the concept of Wikipedia). By approaching digital resources and activities from an anti-rival perspective, we can promote structures that incentivize sharing and collaboration, rather than artificial scarcity. This can enable a digital environment centred on co-creation, support, and communication, instead of profit.

In the H2020 research project ATARCA, we are experimenting with anti-rival use cases that combine digital citizenship with real world impact. The Food Futures Index is a digital and self-curated index of the variables impacted by the food supply chain, such as water, nutrition, and animal welfare. Participants are able to reflect on their food choices by viewing these variables and make decisions based on their priorities, for example, sustainability. At the same time, users are encouraged to authorize the collection of their own data through tokenization. The aggregate data allows for a greater understanding of the food choices in their offline communities. The more a participant contributes (and the more participants that contribute), the greater the benefit to the wider community. By taking part in the Food Futures Index, a user becomes a digital citizen through their active participation.

While Web 3 may not yet be fully embraced by all, it is clearly indicative of a growing desire for a bottoms-up approach to the internet. By adopting an anti-rival understanding of data, we can promote the collaborative attitude needed for such a transition.

Photo by note thanun on Unsplash

At left a close-up of some of the data metaphors explored in the untitled festival session.

What if we looked at data as we do at water, sunlight, or currency? As digital data is a relatively new phenomenon, it is fruitful to consider the implications of treating it as we do the more established parts of our economic and social systems, such as labour, oil, and currency. This thinking exercise may highlight challenges and new questions about the position of data in our current economic paradigms, and societies, and what this means for anti-rival economic thinking. 

As part of the European research project ATARCA, Demos Helsinki held the policy dialogue session at the Untitled festival in September 2021. The session was geared towards imagining new metaphors for data and to discuss the social and political implications of an anti-rival economy. The principal investigator of ATARCA, Ville Eloranta, opened the session with a talk on market failures in data economies and data sharing. Through a data metaphor card exercise developed by Aalto University IDBM students, the session sought to playfully think about data and the anti-rival economy in imaginative ways. Below we highlight some of the emerging ways to conceptualize data:

Data as Sunlight

What if we think of data as sunlight? One observation that arose during the session was that data and sunlight do not get depleted when they get used by more people (unlike physical resources, such as minerals). However, the costs of using both data and sunlight do still create barriers for their widespread use. The resources, like time, technology, and education needed to process and effectively utilise data, mean that despite it being anti-rival in theory, it is not accessible to everyone. Because the economic cost attached to processing and interpreting data restricts many groups that could benefit from data from accessing it in current market structures, this creates major inefficiencies for anti-rival economics to resolve.

Data as Art

A metaphor that highlighted the social inefficiencies created by governing data through current market institutions and economic structures was the metaphor of data as art. Data, like art, gains its value to wider society through its use. However, to the individual owner of the data, there is little incentive to allow open access to their resource, as they know it holds monetary value. This often results in data and art being stored far away from where they can provide the most use to broad groups of people, with their owners waiting for a good moment to extract a profit from them.

As has been done for art in publicly open museums, subsidies and government support can create the open access to data that we need to fully capture its positive potential. The market failure created by conventional economic paradigms shows both the challenge and the potential that anti-rival thinking has in creating more efficient and desirable outcomes for society.

Data as Capital

By looking at data as capital, we can also see how access to data funnels powers into a limited number of hands, as does capital. This raises pressing questions about the relation of current economic models in shaping the way power is created and distributed, and how anti-rival innovations may have broader societal and structural impacts beyond their impacts on the economy.

These were but a few of the excellent metaphors developed during the data metaphor exercise and following discussion. The used metaphors highlight that access to data is connected to how the world in many ways can be seen as divided between the haves and the have-nots. Significant amounts of power and influence over the future of society and our material environment are controlled by large corporations. The discussion clearly showed the challenges of the currently dominant economic paradigm. The session was the first policy dialogue session of ATARCA. We will continue the research, experimentation and dialogue around the economic paradigms aiming to explore the potential of, and the conditions for an anti-rival economy based on distributed ledger technology.