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.

To understand this dense vision, it is necessary to ponder what anti-rivalry, institutional incompatibility, and societal economic efficiency mean, going beyond the main street economic assumptions.

Anti-rivalry: Table 1.1 expands the classical fourfold of economic goods with a new column for anti-rival goods. The rows and the columns for rival and nonrival and excludable and non-excludable goods are classic, appearing in text books at least since the early 1970s. The column for anti-rival is new, following and expanding the work of Weber, Cooper, Houghton, Carballa Smichowski, and others. An anti-rival good is one that gains value when used, contrary to the typical rival good, which loses value as it is used. As other goods, anti-rival goods can be divided into ones whose subtractability is negative, typically due to network effects (hence “Network goods”), but that are excludable, and “Symbiotic goods,” whose subtractability is negative and that are non-excludable.

Table 1.1.  The six types of rival, nonrival, and anti-rival goods

 

Subtractability

Excludability

     Rival

Nonrival

Anti-rival

Excludable

Private goods
(e.g. coffee)

Club/toll goods
(e.g. museum visit)

Network goods
(e.g. Fortnite)

Non-
excludable

Common-pool goods
(e.g. ocean fish)

  Public goods
  (e.g. public beach)

Symbiotic goods
(e.g. internet)

Institutional incompatibility: Our economic institutions, including ownership, money, and banking, have evolved to serve well our global rival economy, and to serve sufficiently well for the trade of most nonrival goods and services. However, in the area of intellectual goods, we already see a failure of the markets and the emerge of additional, regulation based institutions, in the form of intellectual property rights (IPR).

More generally, as more goods have transformed into digital, the markets have failed and changed, and new legislation (such as the US Digital Millennium Copyright Act) and new technology (such as Digital Rights Management, DRM) have been introduced. However, neither of these have — so far — attempted to transform the underlying logics of value capture and value extraction. As a result, the markets continue to fail: goods are distributed in an inefficient manner and the system feeds increasing inequality.

We believe that the root cause for these market failures is that the production and consumption structures of anti-rival goods are fundamentally different from the structures of exchange. Goods of presumably equal value are exchanged: departed and received. However, most anti-rival goods are hard to exchange: removing an idea or an image from one’s brains or information from a company is challenging. Even proving the complete destruction of digital items within an organisation boundary is a daunting task.

Consequently, we have surmised that trying to cloth the trade of anti-rival goods in the framework of excluding private ownership and exchanging goods for money is bound to lead to an inefficient system, thereby strongly disagreeing with the mainstream economists. As our current economic institutions are built around the rival ideas, they are failing and will continue to be failing. We need to formulate new models for trade and economic ecosystems, implement them in terms of technology, and validate the resulting systems through experiments.

Market equilibria and allocative efficiency: We herein briefly discuss the market equilibria and economic efficiency of digital goods, focusing on data. According to our evolving results for unregulated competitive data markets, there are two equilibria: either data is not produced at all, or the data is sold at its copying cost. With Nash assumptions, it becomes possible to form a closed circle of trusting business partners that each pay an agreed price. However, it remains impossible to agree on a competitive price based solely on supply and demand, other than at the marginal copying cost, due to the shape of the supply curve; see Figure 1, on the previous page. Consequently, to create a market price that incentives data production, either technology (such as DRM), legislation (such as IPR), or mutually fully trusting circles of trading partners are needed, to counter fraud and collusion.

From the allocative efficiency point of view, for digital goods their Pareto optimality basically equals universal availability of them, due to their (near) zero copying cost. That is, consumer preferences are best met when all so desiring consumers can access their desired digital good at will, paying only the near zero copying cost. However, this creates the classic dilemma that the IPR laws attempt to solve: balancing the incentives for creating digital goods with the loss in allocative efficiency, caused by preventing copying. Without proper structures, the initial production costs of the digital goods will never be covered and therefore the goods will never be produced in the first place. However, the mechanisms we have today create artificial scarcity, limiting the availability of the goods through legislation or technology, thereby leading 1) to per se lesser efficiency due to some parties not receiving a copy of the product and 2) to increased enforcement and technology costs.

Technology vision: For this specific project, we envision implementing new kinds of “smart tokens” that follow the anti-rival logic. These tokens can be “shared” in the same way digital goods can be shared, at an almost zero technical transaction cost. They are used to instantiate a new “substance” of quantified anti-rival value, a medium of sharing. Hence, they work somewhat as money, being a store of value and a unit of account, but instead of being a medium of exchange, they are a medium of sharing.

From the technology point of view, this is analogous to the manner to how the bitcoin implementation allowed instantiation of the Bitcoin cryptocurrency.  However, while Bitcoin created artificial scarcity, the value of our “anti-rival tokens” will not be based on scarcity but the underlying human relations. Their value reflects the way relationships are built over time through repeated interactions, by default benefitting all sides of transactions.

This vision far surpasses the current economic mechanisms, since instead of creating an incentive for digital goods through artificial scarcity, we shall build technology for incentives that do not need artificial scarcity. 

A simplified example: Let us consider first rival goods, e.g. a hammer and nails. If I sell them to you and you pay me with money, you walk away without that money and I without my former tools.  Let’s consider next anti-rival goods, e.g. a computer program and a data set.  If I sell them to you and you pay with money, you still walk away without your money, but I can easily keep my data and program at zero cost. However, if you pay me with some anti-rival tokens, you can also keep the tokens, similar to me keeping my tools.

The main problem here, perhaps not obviously, is to create the technology mechanisms for those tokens to have and sustain value. Their value cannot be based on scarcity; their value shall be based on future expectations, just like the value of fiat money is, but on expectations that are anti-rival in nature. This is nontrivial.

One radical option for creating sustained value for the anti-rival tokens is to either require or allow paying taxes with them. In the longer run, we can imagine anti-rival taxes. The society may decide such taxes, effectively imposing further limitations, similar to Tobin’s tax or the wealth tax by Piketty et al. It is an open research question, how to arrange such taxes so that they don’t become a dystopian government requiring good deeds.


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.