New Data City: The future of the digital CBD as a data pool on a DAO

By Jason Potts & Trent MacDonald (RMIT Universit)

The growth of the digital economy and advances in AI make data an increasingly useful and valuable factor for economic production and innovation. Yet high transaction costs and weak property rights mean that data is often owned and used by the firms that built the platforms that captured it. Because data is non-rivalrous this is often socially inefficient. It also exposes privacy hazards for consumers. Policy remedies include stronger privacy protections and consumer data rights, antitrust action against large firms, and support of new institutions such as data trusts or cooperatives. We propose an alternative solution at the level of the city in the form of a special data zone governed by a DAO, with city denizens as token holders. The connection between blockchains and cities is not new, but here we focus on how digital institutional technology creates data as a resource. In this design, the city builds and owns a data co-op, with firms that locate in the city able to access that data on terms governed by the DAO with token-mediated transactions, decisions and permissions. Data becomes a resource that is both produced and consumed in the city, powering a new economic flywheel.

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