At the outset, we refer to an answer that one of our co-founders gave to a Telegram question about deconomics: this answer uses a very simple analogy to get to the core of this heterodox economic model. The core of this model is the concept of a user’s “Personal Data Value” (PDV), which is a payable and tradeable value assigned to every user on Decentr that reflects each user’s generation, reuse and exchange of data.
For the purposes of this analogy, let’s keep it simple: let’s forget the finer nuances of mathematics and economics, and focus only on “value” — it’s meaning to us in economic terms but also more broadly to us as individuals and society.
Here’s a baseline analogy of what PDV is and how it underpins deconomics:
Gold is very rare and malleable so you can make a lot of nice things with it, hence it is valuable. Your personal data is very rare and malleable and you can make a lot of nice things with it, hence it is valuable (at least it is valuable once Decentr ensures user data is 100% immutable and decentralised).
When gold goes up in price you can acquire more money, goods and services, etc with the gold you hold. On Decentr, when your PDV goes up you can acquire more money, goods and services, etc with the user data you hold (because Decentr repurposes data value as tradeable and payable currency).
The difference in this analogy is you cannot personally control the value of gold but you can through proactive engagement on Decentr control the value of your PDV. Hence, you can acquire more with your increasingly valuable PDV the more you positively contribute to the Decentr ecosystem (or “decosystem”).
In this way, with Decentr, financial autonomy is 100% up to you, the user.
Another way to approach deconomics is by way of an understanding of Holochain/Metacurrency principles of “currency”.
The Metacurrency project archives express it best:
“We take our definition [of ‘currency’] from its original and universal purpose, thus: currencies are systems made to express all forms of wealth flowing within a community.
“Currencies exist everywhere around us, in nature, in our bodies, in our cells… Any social system, and life in general, needs currencies as an intermediary tool to trade, measure, and save. They are used to exchange matter or energy (water, light, ATP in our cells…), to measure the state of a system (hormones, nerve impulse…),to acknowledge an experience of reality (a scream of joy, a dance to seduce, a smile, a thank you…)”.
If we extend that definition into the more prosaic type of “currencies” we observe at the macro level of a state, these “currencies” can be broken down into broad categories: social, personal, public, private, political, economic, commercial, etc and are — as with the nature of currencies — often mutually supportive (or at least interconnected) as regards their functions, aims and goals.
At its essence, the determination of the value of fiat-money-currency is, at the macro level of a state that issues it, determined by how effective these multiple interconnected “currencies” are at promoting social stability and cohesion.
As a result, where a combination of, say, conflicting personal, public, political and economic circumstances promote civil war, the fiat-money-currency will be unstable and hence will decrease in value.
Vice versa is true where a similar combination of factors promotes peace, prosperity, etc in any given country or jurisdiction.
In other words, the rise and fall of fiat-money-currency is determined by the broad “flow” through a population of innumerable and often invisible “currencies” operating across social, personal, etc levels. These “currencies” swell and ebb in a similar way to tidal swells, on top of which the rising or falling “value” of fiat-money-currency flows as a sort of surface tidal swell — separate from but interconnected with all other “currencies” in this metaphorical body of shifting and shaping water.
All well and good as a metaphor, but the issue is that an individual user cannot personally control this rise or fall: an individual user can neither “influence” the value of fiat-money-currency at an individual level nor at the level of their community (even less so, in fact, as an individual user or user group cannot control fiat-money-currency issuance and hence effect competition, scarcity, etc.).
The bottom line is, no action you can take can affect the value of the banknote in your back pocket.
The control of the value of fiat-money-currency is quite obviously beyond an individual user’s control, and hence the control of the value of goods and services a user purchase’s with fiat-money-currency is (again, fairly obviously) beyond a user’s control.
In essence, any commercial exchange between fiat-money-currency and goods and services is determined exclusively by factors beyond the buyer /seller’s control: that is the aggressively centralised power differential Decentr is remedying.
Decentr provides a 180-degree shift in this paradigm so that users are in control of their own “personalised” exchange rate and hence in control of the “value agreement” of goods and services — a P2P agreement that works in favour of both buyer and seller/provider.
The deconomy places this control 100% with the individual user.
How do we do this? Simple. Decentr is set up to give each user a “personal” exchange rate — as expressed in their PDV — that is exclusively dependent on the ongoing, constantly refreshed — like breathing air — ebb and flow of a user’s personal “currencies” through their Decentr account.
PDV cannot be influenced by any external third-party factors or forces (that is the definition of 100% decentralised dataflow and storage). This means that if you, as a user, positively modulate your multiple “currencies” (by generating, reusing or exchanging great data content, etc) as they flow through your Decentr account, your DecID records this and your PDV goes up.
It is your PDV that you then use to pay and trade in your personal favour against all other currencies (fiat and digital). As our whitepaper explains in greater depth, this means that if your personal exchange rate is
PDV: 1.5000 I DEC: 1.0000
(assuming for illustration purposes 1 Dec = $1) then all goods and services are from your perspective 50% cheaper than real world prices — an exchange which is underpinned by the value of Dec — whereas from the seller/buyer’s perspective, they are getting the full amount.
These are just some of the amazing properties of a 100% decentralised internet, which is causal and hence all dimensions and values, including economic, are relative. Not least of all, PDV increases ones purchasing power, which is the essence of stored value systems — preserving purchasing power.
As well, non-monetary work is tax free, so by working for PDV we gift ourselves what would have been lost via taxes if we were working for fiat currencies.
In this way, Decentr represents 100% economic autonomy and freedom to dictate P2P value and worth arrangements between community members, with value being determined broadly across the decosystem by 100% decentralised community consensus.
Feel free to get in touch with us for more details about Decentr, or with any questions or suggestions you might have, via the contact form on our website.