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Summary:
Classical economics is built upon a scarcity model of supply and demand of physical assets. In the trade of knowledge assets, the transfer of knowledge to one party does not require the cessation of knowledge by the other. As a result, it is estimated that 80% of a modern economy is intangible simply because it is not measured in accordance with generally accepted accounting practices. New methods in Blockchain and AI allow us to measure new value assets into tangible existence. This article proposes an accounting system for the next economic paradigm.
When Bears and Bulls Collide
In conventional accounting practices, a positive entry in the asset column of a balance sheet must correspond to a negative entry in the debit column. However, Knowledge Assets (K-Assets), function differently. The transfer of K-Assets does not require deducting the asset from the previous owner. Consequently, K-Assets are abundant and necessitate a different form of accounting to correctly attribute the contributions of STEM practitioners on a balance sheet.
A Brave New GAAP:
The Innovation Bank by The Ingenesist Project, provides the substrate for the production of K-Assets. This process is similar to how financial institutions facilitate the production of Capital Assets (C-Assets), but with distinct differences. Furthermore, the successful accounting system would facilitates the equitable exchange between of K-Assets and C Assets. The goal is to establish parity between these previously separate asset classes based on an universal risk-adjusted basis, rather than a scarce profit-adjusted basis.
Revolutionizing Technology Transfer
The Innovation Bank revolutionizes technology transfer by focusing on knowledge assets in their natural state – the mind of the practitioners – rather than a physical objects like machines, buildings, or processes that they may create. Although the end result is identical, this approach proves far more efficient.
In the Innovation Bank, the K-Asset, is created when one practitioner makes a claim and another practitioner validates it on a decentralized database. As a reward, they each receive cryptographic tokens that can later be used to access system metadata or traded on an open exchange for business intelligence. This dynamic “nano-credentialization” in aggregate, forms a means to measure economic potential.
A simple game with extraordinary implications.
The system operates autonomously, providing practitioners with incentives to generate new K-Assets. The rate at which they gain access to other practitioners depends on the quality and quantity of their own K-Asset production. Practitioners are driven to maximize token rewards and accumulate a personal transaction record consisting of successful claims and validations. Access to the database opens up more opportunities for them to generate further claims and validations, creating a positive cycle of growth.
Digital Career Path
Individual transaction records essentially serve as a digital public key, representing a practitioner’s résumé, CV, or portfolio. The owner maintains full control over this record. To ensure integrity, the same game mechanics that populate the Innovation Bank discourage trivial, false, inaccurate, and malicious transactions. The ledger is immutable, auditable, and incorruptible, providing a robust system that prevents such fraudulent or malicious behavior.
The Economy of the Future
In this brave new world of accounting, where knowledge assets are valued on their intrinsic merit rather than their scarcity, the Innovation Bank represents a significant step forward. By embracing this new accounting paradigm, we can unlock the full potential of human knowledge, foster innovation, and create a more inclusive and sustainable economy for the future. Imagine the world that humanity can build for itself if the other 80% of economic growth could be measured into tangible existence.
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