Category: durable goods

Durable Goods

A valid concern that could be raised by potential study participants is, “What if I sell an old mobile phone using independent currency brands, but then the recipient turns around and sells that product for conventional money?”

In other words, a currency system could be attacked by participants whose purpose is to accumulate durable products to be sold later for profit. If that happens, sellers might become more sensitive to the perceived loss in conventional profits when participating in implementations of alternative currency systems. This concern might become prevalent enough that transaction offers are rejected by sellers without even considering the buyer’s currency brand reputation. Since transactions involving conventional money are not tracked under the information system proposed here, it would be difficult to detect such attacks and side-channels.

A deeper consideration of this issue reveals the fundamental shift in perspective required in trusteeship-oriented currency design. It is important to recognize that this attack does not apply to strictly nondurable products such as services and product consumed at the point of purchase (e.g., meal at a restaurant.)

For durable goods such as a mobile phone, a study participant does not have to sell but could rent or lease it out instead. The recipient would be restricted from selling the rented phone for profit since ownership was not transferred in the transaction. As long as potential side-channel attacks exists, leasing would be preferred for durable good transactions which results in the cancellation of self-accrued debt (such as accounted in the ocaup model.)

On the one hand, this type of transaction favors a recipient who likes the flexibility of being able to easily upgrade to newer product models. On the other hand, leasing would force the owner to be more involved with the whole product lifecycle, including eventual recycling and disposal, instead of simply transferring that responsibility to the recipient. The predicted effect is that only dedicated owners would want to deal with the lifecyle responsibility of durable goods, leading to better product traceability and accountability.

In the long run, independent currency brand transactions will likely flourish in a service-oriented economy, where ownership transfers or trade boundaries are less emphasized.