Credonomics Paper

A Description of the Economic Dynamics of the New Market for Email Access

Stewart Dennis
Turing Technology, Inc.

October 29, 2017


Email is broken. Spam costs the global economy $20 billion per year and still accounts for 70% of all email. The solution is to establish a new market for email access in which email senders contacting unknown recipients pay a fee for the email to either go through or be responded to. The solution is implemented in two components: BitBounce and Credo. BitBounce implements filtering of emails from unknown contacts and the payment mechanism for email receipt or response. The Credo token is the primary unit of exchange that recipients are compensated with. More details on the Credo-BitBounce solution can be found in the Credo Whitepaper.


A new market for email access has been established via the Credo-BitBounce solution. This market has various atypical dynamics and properties that derive from its structure. Participation in the market is quickly growing, and providing participants with an informed understanding of the market will help them operate successfully within it. This paper presents a first step towards that end: a clear description of this new market and the benefits of early participation in it.

1. Market: We operate within a social economy in which many participants make exchanges via markets. Communication between participants in this economy is needed in order to conduct exchanges. Prior to BitBounce, initiation of such communication between unknown parties either occurred through unsolicited communications or through social-exchange based introductions. With BitBounce, such communication can be initiated between market participants in a more efficient manner via financial exchanges in the form of Credo tokens.

2. Exchange: The abstract concept of this market is instantiated via an exchange built on top of the existing email infrastructure. This exchange blockades communication access between unknown parties and then trades access to the inbox for Credos when a payment is made.

3. Participants: The participants in this market are email senders and email recipients. Email senders are the buyers because they buy access to recipients’ inboxes. Email recipients are the sellers because they sell access to their inbox. Email senders may buy access to many inboxes and recipients may sell access to their inbox to many sellers.

4. Tradable item: The tradable item in this market is email access, which is the ability to send an email to a recipient’s inbox. Ownership of email access is defined on a per-email-account basis with an owner being an entity that is able to legitimately authenticate and control the email account.

5. Value of Email Access

5.1 Goal-directed interpretation of value: Economic behavior can be viewed as goal-directed even when these goals are implicit, chaotic, or intended to not be goal-directed. With this view, value can be seen as a measure of the degree to which a particular economic behavior or action contributes towards a goal. For example, a recruiter may have a goal of recruiting candidates for a new position; email access to strong prospects for that position has value because it helps the recruiter accomplish the goal.

5.2 Value relativity: The value of email access is relative to sender-recipients pairings for a given email. This can be illustrated by a straightforward example. Let’s say an email recipient is an executive within a niche industry. When that email recipient is paired with an email sender who is a salesperson for a niche product targeted exclusively at that industry, email access is of high value. However, when that email recipient is paired with an email sender who is a random person selected from the general population such as a surgeon based in a different geographic region, email access is of low value. That said, the overall market value for a recipients’ email access can be viewed as the average — or another aggregate measure — across prospective senders.

5.3 Value fluctuating based on changing economic context: The value of email access will fluctuate depending on changes in economic circumstance for the sender and recipient. Let’s illustrate this observation with an example:

Therefore, the value of email access for a given sender-recipient pairing is continually fluctuating depending on changes to the current state of economic reality.

6. Pricing of Email Access: Prior to BitBounce, this value was not priced into email exchanges. BitBounce implements a price for this value.

6.1 Credo-denominated: Prices for email access are denominated in Credo. An equivalent fiat figure may be provided to buyers until such time as they have become accustomed to Credo-denominated prices.

6.2 Threshold price: Sellers set or accept a threshold price at which they agree to sell email access. Payments below this threshold price will not result in email access being purchased.

6.3 Prioritizing price: Amounts paid beyond the threshold price can be viewed as a prioritization price to further increase the priority of an email for the recipient. This could be useful if an email sender would like to initiate communication with a recipient about an urgent matter and would like the recipient to receive and respond to the communication more quickly.

6.4 Price-value differential problem: One economic problem within this market is to ensure that the price of email access for a recipient corresponds to the value. In other words, the problem is to minimize the difference between the price and value of email access across the market.

6.5 Price-value differential solution: One solution to this problem is to implement an optional mode for BitBounce in which the threshold price is automatically adjusted based on the demand for that recipient. For instance, if a recipient receives a large number of paid emails with prices above the threshold then the threshold could be automatically increased; and if the user receives a dearth of paid emails then the payment threshold could be automatically decreased. This algorithm could incorporate user preferences coupled with well-tested default behavior.

6.6 Pareto distribution for price threshold hypothesis: One hypothesis is that algorithm-adjusted payment thresholds across the market will fall along a Pareto distribution in which some recipients have a very high price for contacting them, and many will likely have a sub-cent threshold price.

Illustration of hypothesized Pareto distribution of threshold prices
Figure 1: Illustration of hypothesized Pareto distribution of threshold prices.

7. Medium of Exchange

7.1 Credo: The medium of exchange within this market is Credo, which is a cryptographic token hosted on the Ethereum blockchain. Credos have a price denominated in other currencies based on exchange trading activity.

7.2 Credo ownership: Credo ownership is defined as secure storage and management of private keys associated with addresses that have Credos.

7.3 Credo supply: The total supply of Credo is fixed at 1,374,729,257.2286 tokens. However, subsets of the total supply are of more practical relevance. There is a smaller for-sale supply compromised of the portion of the total supply that owners are willing to sell; this is probably a strict subset of the total supply given that some portion of owners will likely choose to hold their tokens. Furthermore, there is a for-sale supply at a given price, which is the quantity of tokens that owners are willing to sell at a given price point.

Illustration of supply and demand effect on Credo price
Figure 2: Illustration of supply and demand effect on Credo price.

7.3 Credo demand: The demand for Credo is the amount of interest in purchasing Credo at specific prices. There are various factors that will increase demand for Credo. One significant factor is the acquisition of additional senders to the market who require Credo in order for their emails to go through. Demand can also be increased through buying back tokens from the market. Trading activity could also increase demand.

7.4 Credo pricing: The combination of the supply and demand will result in an exchange-determined market price for Credo. This price could be influenced by owners who play the role of market maker, yet even they would be bought out at a given price if there is sufficient buy pressure (hence supply and demand principles still hold).

Illustration of supply and demand effect on Credo price
Figure 3: Illustration of supply and demand effect on Credo price.

7.5 Credo liquidity: Credo’s liquidity is determined by a number of factors including which exchanges Credo is listed on, the buying and selling activity of owners, and the activity of market makers. Credo’s liquidity can be expected to improve over time as it gains wider adoption and support from exchanges.

7.6 Credo necessity: As adoption of BitBounce grows, Credo will increasingly become a necessity for economic actors to initiate communication. This can happen because the portion of potential unknown recipients that senders can contact without paying Credos will gradually decrease to the point at which it may become infeasible for senders to accomplish their economic goals without Credo; in this case, Credo ownership and usage would become a necessity.

8 Early Adoption and Market participation: With most new markets and products, early adoption only yields unfortunately worthless bragging rights. With the email access market, early participation confers significant advantages. Specifically, the analysis in 7.3 and 7.4 indicates that growing participation in the market will create more demand for Credo and should increase the price. This means that early adopters will be able to purchase Credos as a discounted rate from the expected future price. Therefore, once the market has gained more widespread participation, early adopters will have far greater buying power for email access and will be able to communicate much more effectively in this economy. So, the size of conferred future advantage will be inversely proportional to the stage of market adoption at which a participant enters it (assuming that the participant purchases Credos on entry and does not liquidate them prior to use in the market).

Illustration of expected trend in Credo-denominated price of email access
Figure 4: Illustration of expected trend in Credo-denominated price of email access.

9. Ensuring effective participation in the market: Given this is a new market, efforts will need to be made to ensure effective participation. These can be partly technological in nature, such as BitBounce mechanisms that prohibit delivery of an email to the inbox without payment, algorithms that automatically adjust the threshold price to receive email based on the demand for that recipient, and simplification of the payment experience. Efforts can additionally be sociological, such as through education and training of market participants; this could include development and dissemination of a set of best practices for participants, such as recommending the purchase and maintenance of a reserve of Credos for expected future use in the market.