Book Excerpt #2: “Defining the Digital Economy: The Structure of the Digital Economy in Focus”


Our thanks, once again, to Lori Jo Underhill, blockchain visionary for sharing an additional chapter with us from her new book “Defining the Digital Economy: The Structure of the Digitial Economy in Focus”, where she has undertaken nothing less than a full on definition and structure for the new digital economy.  You can view the original post from her book here and information on how to purchase on Amazon is available at the end of this piece.

Cindy Taylor/Publisher


From “Defining the Digital Economy: The Structure of the Digital Economy in Focus”
By Lori Jo Underhill, Digital Economist

CHAPTER 6

ECONOMIES

INCUMBENT ECONOMY VERSUS DIGITAL ECONOMY

The Incumbent Economy is a collection of sovereign micro economies with geo-political micro economic borders.  The Digital Economy has different micro economic borders.  “Digital Borders”[1].

The definition of Digital Economy:

Definition (defined here):  The “Digital Economy” is an ecosystem of production, consumption, trade transcending geo-political boundaries where “Digital Assets” operate in a virtual or digital environment as Stores of Value, utility, function where there is agreement and consensus about the value of the Digital Assets exchanged in the ecosystem and the method of transfer between them.

Economies now operate both on a macro level across (Incumbent) geo-political sovereign borders or across Digital Borders, or on a micro level within geo-political sovereign borders and within Digital Borders.  Currently the Incumbent Economy and the Digital Economy can interact with each other through exchanges and commerce where assets from both economies can be transacted and exchanged.

The Incumbent Economy now has a powerful example of a consortium that extends beyond one geo-political border.  The European Union has demonstrated that the use of a singular currency beyond a singular geo-political territory is possible.  This model can be examined as the start of the trend toward consortiums of communities with shared purpose and cultural values that band together in monetary policy.  Digital Economies are of similar character to the European Union.  Participants of Digital Economies come together in agreement and consensus about the structure, nature, and method of its monetary policy through a common cause of culture, values, and purpose.

Digital Economies are formed out of philosophical, functional, utilitarian, economic, or cultural agreements between parties, and operate in consensus for transactioning with others who share those same philosophies, values, or needs.

Opinion:  As of the date of this writing, the choice to participate in these economies is generally voluntary for most world citizens who have access to the technologies.  However, some geo-political sovereigns, have banned the use of Digital Currency.[2]  This circumstance may change and shift as geo-political sovereigns begin to embrace these technologies and adopt them as fiat[3].  In that circumstance, the geo-political economic border, and the digital economic border will merge.

The Digital Economy offers opportunities for micro-economies to exist that transcend geo-political boundaries in an ecosystem of peer-to-peer engagement through technological innovation.  Upon adoption of these technologies by geo-political sovereigns, or consortiums of multiple geo-political sovereigns, the geo-political border, economic border, and Digital Border will synchronize.[4]


[1] “Digital Border(s)” This term is created here in this writing to describe the external border between a blockchain, digital ledger, a distributed ledger, versus the outside of the “technical border” of the digital ledger, distributed ledger, or blockchain.  A transfer could be executed to a different blockchain, digital ledger, distributed ledger, exchange, wallet, or silo outside of its own native blockchain.

[2] See https://www.investopedia.com/articles/forex/041515/countries-where-bitcoin-legal-illegal.asp (accessed October 19, 2018)

[3] “fiat” an authoritative or arbitrary order : “decree government by fiat” https://www.merriam-webster.com/dictionary/fiat (accessed September 22, 2018)

[4] In Venezuela, the geo-political sovereign government introduced the “Petro”, a Digital Currency backed by oil, because its native fiat tender had reduced in value, and trust and confidence had almost completely diminished. See https://www.washingtonpost.com/news/worldviews/wp/2018/02/20/venezuela-launches-the-petro-its-cryptocurrency/?noredirect=on&utm_term=.9ea9170d8dd8 (accessed October 15, 2018)


The book can be purchased at Amazon.com through this link:
https://www.amazon.com/dp/1796855154/ref=cm_sw_em_r_mt_dp_U_ZkyFCbJSN6ZDW


FROM BACK COVER: Defining the Digital Economy was written after more than a year of research and analysis of over 2500 exchange traded Digital Assets. 

Insights uncovered offer clarity, explanation, and definitions for understanding the Structure of the Digital Economy.

The Digital Asset Sector Hierarchy – (DASH) emerged from this research.  The first functional and extensible Digital Asset taxonomy.

“Defining the Digital Economy” and the extensible flexible DASH taxonomy is tested visualized and offers first to market insights

The products developed out of this research serve as a solid basis for Digital Asset market intelligence, and financial services product development, through a defensible body of academic work and proposed legal definitions.  The approach is fully integrative, supporting seamless Digital Asset integration and adoption into existing worldwide financial and regulatory infrastructures. 


Lori Jo Underhill B.S., J.D. is a Digital Economy Analyst, “Digital Economist”, Bachelor of Science in Business Administration from Arizona State University in Tempe, Arizona, and Juris Doctor from Southwestern Law School in Los Angeles, California.  She currently works as an Executive Consultant with over 30-years’ experience in hardware and software technology and media. https://www.ljuassociates.com.