Potential of Cryptotokens as Innovative Units of Account

Discussion

Akseli Virtanen et al.:

"Going back to our definitions of economics, the first one — about optimization, incentives and transaction costs — conceives of tokens as either means of exchange or, in the case of utility tokens, types of commodity futures contracts (rights to future conversion into commodities).

They are that, but they also are more than that, when framed in the context of the second definition of economics. From the perspective of the second definition we can see cryptotokens as providing the possibility for new units of account, and hence new ways to measure the economy.

In the first definition, the answer to the question ‘what counts’ in the economy is answered by reference to the discipline of market calculus. In the second definition, what gets counted as ‘production’ and ‘consumption’ is more open ended. What is counted — and what is valued — opens as a design question.

It has been well established that market criteria are blind to some critical economic processes. Roughly (for it is complex to specify) anything not produced for sale is systematically excluded.

In the mainstream capitalist world of fiat currencies, incorporating these excluded forms of production and consumption has been a virtually insurmountable challenge. There we see the dominance of a culture of production for profit and a history of data collection based on that principle. Beneficial things that do not make revenue are difficult to measure and hence to incorporate.

Of course we are not the first to recognise this limitation. The neglect of household production, both nurturing activities in the home and the economic activities of peasant economies, are widely-recognised limitations. And within neo-classical economics there is debate about how far into wider social analysis the notion of externalities extends (and how they might be priced). In a similar vein, the appeal of ideas like ‘triple-bottom-line accounting’ and ‘ethical investing’ also embrace alternative visions of counting. But, and this is critical, they all presume the ontological primacy of profit-centred measurement: they are critiques of and qualifiers to that system and rarely present alternative modes of calculation.

Cryptotokens enable us to re-open this measurement question. Cryptotokens as means of exchange enable us to trade in new ways. Cryptotokens as new units of account enable us to measure output (what is value and how is it produced) in new ways.

This points us already to one of our key insights, to which we will return a little bit later: we already know that the next value production layer — of the era of decentralized open source data — has to do with governance (more welcoming and better governed crypto networks will be valued at a premium due to their reliability of social inclusion in the decision making process), but also with ways of belonging, ways of sharing stakes, risks, upside. The organization of ‘risking together’ — or what we call an economic space — becomes now the actual value creation layer: it is a new value form which is very different to the commodity form as a basic economic cell of society which makes social relations between people (for capital is a social relation) appear as just relations between things. Basically, you will compete now with different community-economy-governances. This — explicitly relational, social logic of this new value form — is precisely what we try to capture by talking about it as a network derivative below. And it is to express such social-economic organizations that we are working on the Space organizational grammar and development environment." (https://medium.com/econaut/economics-back-into-cryptoeconomics-20471f5ceeea)