Creating anti-rival tokens for collaboration and sharing in ATARCA

2021-06-30

This episode focuses on the key concepts of ATARCA (Accounting Technologies for Anti-Rival Coordination and Allocation), a two-year research project that TX embarked on earlier this year. The aim of ATARCA is to investigate in its two pilot experiments how blockchain technologies can be used to create new types of businesses based on the replicable nature of digital resources. 

Head of Technology Jarno Marttila from TX and Dr. Esko Hakanen who is the Project Manager of ATARCA and a post-doctoral researcher at Aalto University talk about what the concept of anti-rival goods means, and how anti-rivalry could turn out to revolutionalize business, especially with immaterial goods such as information within the next 20-30 years. 

They also discuss the more complex question of if and how this concept can be taken even to traditional and asset-intensive sectors such as manufacturing where the new roles of collaboration, connectivity, and sustainability require added interaction and agile experimentation across companies, something which can benefit from anti-rival tokenization.

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Transcript of “Creating anti-rival tokens for collaboration and sharing in ATARCA” episode

Jarno Marttila (JM):

Hello everyone, and welcome to the TX podcast. My name is Jarno Marttila, and I’m your host. And our guest this week is Doctor Esko Hakanen from Aalto university. Welcome, Esko. It’s been a heat wave in Finland. How are you handling this?

Dr. Esko Hakanen (EH):

Uh, I don’t know. Quite OK. So as you can see, so I’m inhabiting the home office. And it’s starting to be OK since we have cooling solutions here implemented. But otherwise, it would be quite. So, to speak, so. But happy to be here, and thanks for inviting me.

JM:

Yeah, I’m happy to have you finally on this podcast. And we have been working together for audience like uh on a project and we’ll be going a little bit in the broadcast like what is it about it’s a very exciting one. But maybe first things first, tell us a little bit about yourself and Aalto University.

EH:

Yeah, so I’m a postdoctoral researcher at Aalto University. I’m also the project manager for our project at ATARCA. And in my research, I’m especially focusing on business models in this kind of ecosystem context. So what that means? So basically, that’s simply how value is created and shared in these kind of complex, loosely coupled networks, which involve multiple firms or other stakeholders in the settings.

And then again so. So for those who might not know the university, it’s based in Finland, probably roughly 10 years ago, through the merger of three major universities in Finland. So we now combine science, technology, business, and arts in one country. And that’s located in the metropolitan area of Helsinki. And considering our relatively young age, although it’s still doing quite well in different international rankings and, for instance, we are one of the most international universities in Europe. And partially to our background, we really emphasize this kind of multidisciplinary research. And this kind of approach is also seen in our current approach.

JM:

Yeah, that sounds very interesting and very timely research topic like ecosystem value creation. It’s very practical, I imagine, for businesses to dig deeper and combine different sciences there.

EH:

Yeah, definitely so. So it’s kind of easy to see that we are facing constantly more complex problems. And so usually the kind of solutions for those problems involve very different kinds of thinking from different fields and kind of really various and broad fields of expertise to solve them properly.

JM:

Indeed, so this approach that we’re working on it’s called ATARCA, but do you want to shine some light how did we end up here and why is this project important?

EH:

First things first, ATARCA stands for Accounting Technologies for Anti-Rival Coordination and Allocation, so that might not sound really enlightening, but let’s try to kind of get the hang of it.

So basically, we’re kind of investigating this, how could we use distribute ledger technologies for supporting new types of collaborative actions and the anti-rivalry there is basically that these actions try to build on the replicable nature of different digital resources. So there’s definitely some new ground there to cover.

This is a cross-disciplinary research project. There are many different stakeholders, and especially I want to emphasize professor Pekka Nikander’s role behind the project. So this is basically building on the many years of his research. And his research are on the topic and then again, personally, I’m coming here from slightly different angles. So I have a background in, especially in, studying industrial services and the impact of these digital technologies and digitalization through the business models, especially in manufacturing industry. So you can consider metals or mining industry or these kinds of asset-intensive fields, and even there, we can kind of see how the role of collaboration, how the increases in connectivity of your devs. And products that are creating more new possibilities that kind of require more interaction and actual experimentation across firms. So there’s definitely room to investigate how we can then kind of coordinate and allocate our resources more efficiently in our networks.

JM:

I remember. I didn’t write the proposal. Uh, last year. I remember when it was written. Like it didn’t make any sense to me. It was like this is very high flying stuff.

EH:

So that’s, yeah, I think that’s the honest way to put it. So, have not worked on the projects for roughly three months. We had to kick off well two months ago, basically. And I guess we kind of concluded there that we have this plan, we have great ambitions. We have kind of great possibilities and ideas here. But then, in all honesty, does anyone really understand what this means and do we see the problem and potential solutions the same way?

So I think that’s, honestly, kind of our major things to cover for the first months of the project and perhaps throughout the whole project lifetime since, since it’s good to remember that this is part of the European commission’s Horizon 2020 funding, but there we have this track for future and emerging technologies. So we are kind of really on the exploratory ground here and a lot of things to cover and then try to kind of figure out what it actually means in practice.

JM:

Yeah, I guess you could say it’s the bleeding edge of science that we’re trying to bring into practice. In a way in the project then, and after three months, like, I kind of have an idea like, oh, OK, so this is what we’re creating. So it took like 3 months of study we get there.

EH:

Yeah, so, so it’s been really kind of educating for me, as well, so I wouldn’t consider myself as any kind of crypto specialist. So this is really kind of unknown territory for me as well, even though in a sense, I would say in my line of research and especially if you conjure this kind of asset-heavy industries, which I have kind of mostly investigated. I would still think that in that context, I kind of know what others are talking in different contexts, but it’s really difficult because you try to somehow converge everything in the two together in this project and it’s just so complex problem space to address. So yeah, I really enjoyed our collaboration. So far, so let’s keep that up.

JM:

Yeah, it’s super interesting stuff you mentioned. There was this concept of anti-rivalness. That’s probably something new for a lot of people, like what is anti-rivalry and anti-rivalness. How does it relate to, let’s say, business? Can you share some light in there?

EH:

OK, I’ll do my best.

JM:

It’s not an easy question.

EH:

So this is really kind of complex. This is easy to kind of put into place in theory but then if you try to kind of apply the theory in practice, it’s really fast becomes much more challenging to put different things in different boxes. So, in short, anti-rival resource is pretty much anything that increases in value the more it’s being used. That’s kind of the essential nature of the kind of behind the concept.

So when you consider businesses and especially kind of traditional approaches there, we are mostly used to classifying resources as rival or perhaps non-rival, but in the business context, we are more or less thinking resources that will be consumed when used. So these are the rival resources. So if I use a piece of steel to create a roof for my house, I cannot use that same piece of steel for anything else, and neither can we share the same rules in our different houses. So that’s kind of quite easy to understand that when you apply it to somewhere it’s taken away from other use cases, or even more simple example could be a cup of coffee. So we cannot really drink the same cup of coffee. That’s kind of easy to understand.

And so then if those are rival sources, we have non-rivalry sources and these are something that we consider that this can be used simultaneously. So, for instance, for an experience, many people can enjoy in the same park or beach at the same time. But still, there are some limitations, so these are not infinite, so not all the citizens can visit the same place at the same time on the same day. We can other way to put it, so we all breath the same air and oxygen in our atmosphere, but we kind of really consider that that’s a limited resource. But if we end up polluting that into unbreathable, we don’t really have an alternative supply for that, so we cannot multiply these types of resources in even though they are usually considered as kind of non-depletable.

So these are kind of the, let’s say, traditional approaches that you can see in many past economics books and so forth. But then these anti-rival resources. So, it’s easiest to kind of think that these are the antonyms of rival resources that benefit from increased amount of users. So easy examples are network phones or the Internet. So the bigger the reach, the more value you can kind of create in that network. Or you can think of, let’s say, a news article. So we kind of tend to think that better articles and more valuable content get more readers, and then it’s kind of verification of the value of the article as well. So the key element here is that we don’t really consume anything once we kind of use these individual resources. So it’s kind of the news article doesn’t kind of deplete by the amount of certain readers. So I think the best example if you try to kind of comprehend what it’s all about. So you can conjure about reputation. I think that’s kind of the easiest way to kind of approach the topic. So if we here for instance endorse each other. We’re not really taking anything away from anyone else and there are no limitations on how many people we can kind of uphold or endorse in different contexts. I think that reputation is the easy way forward to understanding what anti-rival might actually mean. But the other way to look at it would be actually kind of, for instance, dig deeper into our project websites, so at atarca.eu. I think there are perhaps better explanations there than I can provide here.

JM:

I remember reading, I think it was Pekka’s and yours research paper or was it Pekka’s research paper where this concept was kind of being drafted, and there was this matrix of what kind of rival non-rival and anti-rival in different contexts in different examples, and there was an example. Of a online game that the more you have players playing that game, consuming that resource, and also sharing kind of the experience, the more immersive or the better it becomes. It’s kind of also a way to understand it like I guess, through this kind of network effects that both aren’t there.

EH:

So network effects is really kind of the keyword here as well. So anything that kind of follows that path is most likely fitting in this context. But that’s, of course, not kind of always the case. And of course, if you want to complicate the situation more, you can also consider whether you can exclude. The access to the resources over, for instance, online games, if there are for instance, you need to kind of have this same game in order to kind of enjoy it. It’s not kind of accessible to anyone anywhere at any time.

JM:

That’s true. And then there’s, I guess the next question would probably be like if I was in a business meeting like, how do you ascertain the value of this? And then it starts to get even more and more here like. I mean usually, you get value like having scarcity or something. But now you have like kind of infinite supply. If you give an infinite amount of reputation then…

EH:

So that’s the tricky part, I think. I think that’s the kind of main reason why I personally think this is a high-value project. So since we kind of identify there that there are these technological possibilities that are in place. We cannot see some obvious use cases. How we can say benefit from, for instance, sharing our data that is kind of our resources that are in idle usage, but then again you don’t really do business in that setting.

So you are accustomed to being, let’s say, business models that are based on transactions. So when I buy a car, I give money to the car dealer. So that’s kind of really straightforward. So you kind of have this exchange where you usually have something tangible that’s exchanging hands. And that approach doesn’t really fit here in under our context. It’s if you consider the car, you cannot really produce or sell many cars if you just get paid in reputation points, so it doesn’t really make sense in our current setting. So it might be challenging, but…

JM:

Yeah, it’s this old adage of, let’s say, if you’re a photographer or in the art type of industry and think people want to pay with exposure. It’s like well, forget my waiting, I’ll give you a shout-out on Instagram, but I can’t pay my bills with that so.

EH:

Yeah. I think that’s a really great example of so… So basically, you reach out to different designers and artists and ask them how well they think that this is kind of working. This situation that I give you something that is tangible and usually kind of you would have to pay money for. And then I kind of decide that, well, I can keep the piece, but I just give you exposure, so it’s apparently tricky, so it doesn’t really work that.

JM:

Yeah. No, no. Yeah, maybe that’s something we can work in deeper in some discussion like if we can solve that problem also.

EH:

Yeah, that would be one kind of clear use case for our technologies, perhaps so. So if we can kind of make this more even this kind of scenario as well.

JM:

Indeed, indeed. We talked a little bit about like the concept and the project, and also you mentioned about the decentralized technologies. But if you go a little bit like thinking about the design process or the process of like, well, how do we get from the concept to like looking nice items like what is kind of like in your words. Like how do you say what is an organization, and how is that kind of event related to this anti-rivalry?

EH:

Yeah, yeah. Again, this is, I think, challenging since well, I would say that when I say token, different people hear different things. So again, it’s kind of a term that has many different definitions and approaches in different contexts. And while this is again not perhaps my expertise, but this is also something that we try to kind of study.

So, for instance, how to kind of connect the tokens into the concept of anti-rivalness? Uh, but from my background I would say that the token is pretty much any, physical or virtual representation of something that usually involves social conventions and that can be called, I think that’s kind of for me, let’s say, most generic definition for token and also the way I’m trying to fit this into the let’s say business context that I kind of I I relate to.

So we can think examples, well, monopoly money, that’s a token that’s kind of representing something. It’s an agreement. Then you can kind of think, let’s say, a festival area where you have booths for local restaurants or something like that. And sometimes you see that there’s this made-up currency there for buying the food in the area. So I think those are examples of tokens, and of course you can also think that our current money systems, different currencies, euro, dollars, they’re also representing something. So basically, they’re representing a certain amount of exchange value that you have in them. I think those are kind of my approach too. Representing some social convention that we can then count later on.

JM:

Yeah, I also wrote myself in the morning, like, how would I explain this if I would have to explain something like this? Like I asked this question but, I also have to know if someone asks this from me. What would I say? So sounds like that, OK, so my background is, of course, more engineering side. So I would say that: Tokenization is approaches of quantifying, maybe resource or asset that could be tangible or intangible in that internal representation on a blockchain. That’s very engineering problem.

EH:

But that’s actually really, really a great example. I think that’s pretty much the same approach I would actually like to kind of consider. Of course tokenization is, then let’s try to convert that something from one context to another. And then usually that involves some kind of digital solution or something like that. So it’s really kind of relatable for our project.

I totally agree. I  perhaps cannot use those words because I don’t really understand them as well as you. But yeah, so so I would say so if we can, I can try to kind of connect tokens and anti-rivalness. So I think the kind of key question here is so. Again, if that’s quantifiable somehow, it’s we can count the tokens. So how do we then transform the reputation that we are, for instance, sharing and kind of uploading or endorsing each other? So how we then kind of count that type of sharing? So we most likely need to have some kind of quantifying system for and basically measuring how much endorsement I will kind of give for you or someone else for whatever instance that I might have.

JM:

And this we’ve been workshopping on this for quite a bit, and there are some frameworks and there are some tools that kind of keep the way that like maybe something like this and there are some like main components in there like design of the market like where do the transactions happen, design of the mechanism and design of the token itself? And it seems to be like it’s a kind of mix of microeconomics and systems design and designing for people. It seems like there’s like exactly shaped tool kit from the outlier ventures that you can follow to this token. But then there’s like this much more abstract like kind of scientific way of like looking at these big dealers and try to kind of distill the knowledge from there to be fulfilled, to create a token, but it’s been a long while process like a lot of effort goes under there.

EH:

Yeah,  definitely. So I would say that we have a long road ahead of us. So basically, the more we kind of dig deeper into practically any tool that has been presented so far, we kind of start to understand that well it might… For instance, we have some certain examples or frameworks for planning, let’s say a system for tokens or tokenization, so you can kind know how to build a blockchain. For a certain use case, that’s more or less known in the kind of, let’s say, in this context. But the big problem there is that we still have most of those, the tokens that we have there, there are not really anti-rival. So we have really few examples of that kind of use cases. So let’s say. To put it in two simplified terms, we are seeing, let’s say, really complicated platforms, but they’re still more or less the digital platforms that we are used to having and that are kind of building on different transactions and exchanges between the policy events, even though they are perhaps more anonymized. Or governed decentralized or something like that, but still. This is really let’s see where we end up in two years. But right now, it’s kind of feeling that once we get one step forward, we understand there are two more steps to be taken and so forth, so. Let’s see how it goes.

JM:

Yeah, yeah, there’s quite a bit of a road to be made. But it’s getting there like, every week. It’s exciting things happening.

EH:

Yeah, so definitely, this is. But most likely both the coolest and most inspiring research project I’ve been involved in. Because we’re kind of in this unknown territory and let’s say anything that we kind of come up with seems to be new and pretty remarkable as well as when we kind of consider the potential that can be derived there.

JM:

For sure. So if you think. About the kind of like what kind of business could we kind of form from this course? What could be the end results of this project like afterwards? I’m hungry with my pen up with my businesses. Do you have some ideas about that?

EH:

I think we have some ideas. But I would say that at this stage, the ideas we’re going to have most likely, we’re going to see kind of – evaluate them after a couple of years and then kind of conjure that how could we have been so long but in any case. So I think there are kind of many applications that will in a short time start to look quite obvious and then. Also kind of alarming that we didn’t understand them, uh, earlier and so forth. So it’s kind of easy in this case to be and to have a good hindsight.

But I would say at least two different approaches are there to when you’re considering this has let’s say a business case or what can we then be like? So of course we are dealing with technology and trying to develop new forms of clear calling your actions and different collaborative actions so hopefully we can kind of create this technology to work or frameworks that then can be applied in various contexts and use cases. And of course if we are able to create value with same tools in one context, most likely they will generate value in other contexts as well, so that’s of course quite natural. Let’s say business case to have this scalable solution from technological perspective.

And then, I think this arrives from my background as well. So the second kind of big upside I can see here is that that we’re kind of built to favor this kind of infinite economic growth. So we want to continuously expand the amount of resources we’re producing and that also means that we are utilizing resources, uh in growing amounts and so forth and we kind of try to achieve this and of course this is impossible. Well, we are only seeing that it’s not possible. We have finite resources here on our Earth, so we cannot really have this approach in our context. So that’s basically how I see this.

And what kinds of great upside here from the business perspective is that if we can have these anti-rival resources set there and these are the kind of foundation for your business models or your. Well, your whole economic system. And then of course, there are no limitations on your growth. So you are not anymore kind of counting what resources you have and what can you produce. All of those raw material, for instance, that you have, well, you can just start to multiply and use this in different context as long as you wish. So I think that’s, once we are seeing the concepts and these ideas, let’s say in 20-30 years time, I think this is going to be kind of the thing that we are going to be most excited about. So we’re able to devise a way to create value out of thin air, so to speak.

JM:

Yeah, that’s very interesting. I wonder when I think about like decentralized ledger technologies that I guess they can affect business in quite a few different ways like you can they can say create truly new business models or they can create money for existing businesses by just changing how their, let’s say, technology like architecture or infrastructure works. But yeah, that’s very interesting. When we talk about like the resources that it’s actually hops on to my final question that why do you think that does this anti-rivalry work for all resources? Imagine in information already so for sure it must work for information, but will it work for something else too?

EH:

So, definitely for something else, yes. So if you kind of, let’s say, the easy answer to the question that is it applied to all resources, that’s no. So of course it’s kind of easy way out is to say that we only have certain type of resource. It can be multiplied for instance, but they’re kind of… When you consider other types of things so, there are not really kind of limitations how many phones you can have or how many computers you can connect to the Internet. So of course these are different.

But I think kind of the most interesting and perhaps most important question here is that how could it be applied in this, let’s say, a cup of coffee or something that’s really clearly not easy to multiply. So we cannot really drink the same cup of coffee. But can we do something else that kind of somehow connects these elements to those physical resources as well. So I think that that’s also kind of, well, again, kind of partially due to my background, the angle that it’s really kind of, yeah, enticing for me in the approach.

JM:

Yeah, that’s interesting. Like it’s good to have and the arrival tokens associated with arrival products, could there be some dimensions in that product that could have empirical properties?

EH:

So I think that’s definitely the question that I tried to kind of understand. Uh, with the help of this project and hopefully a lot of future collaboration work as well. But basically so if we again try to consider a cup of coffee so, so let’s say you can for instance consider what kind of beans you are using or how they have been roasted or brewed. And basically what kind of water was used and if you use those kind of bits of, say multipliable information, you can kind of, for instance, measure what we drink and how much we enjoy it and can we then connect these elements to the cup of coffee and somehow then start to utilize this information in practically endless use cases? So can we then for instance, create a system where we can know what’s the perfect cup of coffee for me. So how to produce that? And, of course, that’s something that can be pretty much be changed. You know well throughout the time. So let’s say in an ideal example here there will be something that knows what kind of… What type of coffee I would want right now even though I cannot really ask for that. And then if you kind of try to consider that type of use case, it’s starting to be really far from the original cup of coffee and it’s… There are no limitations anymore. How you can then utilize this kind of knowledge there? So it’s something like that might be in place.

JM:

Yeah, I could probably do some kind of decentralized reputation and recommendation systems on the basis of that, for example.

EH:

Yeah. For instance. So it’s and then of course, cup of coffee is perhaps too trivial, but if you, for instance, conjure personalized healthcare solutions, so there are a lot of when. Let’s say that we’re going to have in the future some kind of gene sequencing tools and we’re going to analyze your body and then we can tailor the medication and treatment for your individual needs. So you don’t have these kind of commonalities. For average, this is just the perfect solution for me and of course if that’s a tailor-made solution then the key question starts to be it. That is this actually creating value for me? So do I as subjective, uh, end customer kind of value this type of treatment that I’m having because that’s of course something that we cannot really measure using the same, let’s say, factual measurements.

So, then that again perhaps creates a link so we can start to consider what’s the best use case or line of treatment for children scenarios and try to kind of, again, combine my individual experiences to everyone elses and all the kind of stuff amount of data that we have and then somehow kind of build something much more comprehensive out of those individual data points. So all that kind of solutions is really, really interesting to me and especially kind of linking these let’s say tangible resources to.

JM:

Yeah, that is interesting field. So this project has website, right. So if someone wants to go and find out more, where can they go and find out more?

EH:

So, there is well atarca.eu that takes us to our program, our approach, but home pages, there are not too much content yet. So if you want to kind of quickly check what’s going on, I think now is the time. Hopefully, we’re going to expand these pages quite drastically and throughout the project.

JM:

Yeah, I guess you can also go to Google Scholar, try to find Pekka Nikander or Esko Hakanen. And I think there’s probably going to be one of the latest research papers or actually about this concept and probably even project.

EH:

Basically, yeah, that’s of course easy. You can so also see all the researches that we have there in the project using our websites and then of course scholar is a really good way to find papers from US researchers and also I think kind of since we are having many interesting partners here so. So we of course have you. So Streamr, TX, then we have Demos from from Finland. So basically, they’re trying to help us to increase our, let’s say, social impact here in the project, so really helping us to communicate our research results and kind of the kind of solutions that we find. And then of course we have great partners from Spain as well, so we have Novact and Qbit from Spain and Barcelona area especially and we are then trying to with this group of collaborators. We’re trying to find a small, really practical use cases for these solutions.

So we have been really on, let’s say, on the abstract and let’s say the business perspective here, but it’s good to remember that one of the primary use cases in our project, is actually trying to kind of increase social well-being here in let’s say, in different contexts that might have need for social well-being and and attempts on that. So that’s again another field to discuss. So how we then connect this anti-rival linking to let’s say, improving people’s lives in in your everyday context. So can we for instance, support local dealers or local shops, and perhaps incentivize people to select better options in grocery stores? For instance, if you are considering environmental aspects or whatever metrics that you want to measure. So basically all that kind of links we are trying to also reach the social goals here as well in the project.

JM:

And there’s going to be a couple of pilots if I’m not mistaken. So we’ll try to try these whatever we come up with. Like in practice, see how it works.

EH:

So that’s also great thing about kind of foundation that we have from Pekka Nikander’s work here. So basically we have for instance in the Barcelona area. So we have this, basically regional currency. So basically this kind of again tokens that are meant for supporting this area. And then how we then connect these, let’s say, past experiences and use cases in this new type of anti-rival linking and perhaps different kinds of tokens, which might not even yet exist. Not really sure that’s more your field, but still, I think there are kind of many polls in the area and for instance the other different use cases that we are kind of planning to have our pilots, there’s still some like whether to decide on what’s actually gonna best solution and kind of best way to demonstrate our practical benefits there in this approach.

JM:

Now, that is very interesting. Maybe the most interesting part approach is at the end of the project, we get to, we get to build this on basis of concepts and ideas and new science and test it out and get some feedback from there. Yeah, it’s a two-year project. So I guess we’ll see in about 2 years what’s the outcome? But thank you for coming. This is very, very interesting. I think we’ll probably do another one bit later. I’m going to get a bit further with the project, and you have more experience on this.

EH:

So thanks again for having me and really great to be here and it has been really pleasure to work with you guys and learn new stuff. Uh, this is a really educating experience for me as well. And we have many interesting people in the project, so let’s try to find different angles here as well. It’s going to be a really interesting set of discussions, hopefully ahead of us.

JM:

Yeah, likewise. I’m learning a lot.

EH:

Yeah, I think that’s constant here in our approach and in our community.

JM:

Right. So this has been the TX podcast. Thank you, Esko. Thanks for listening.

EH:

Thank you.