Tragedy of the commons refers to a situation in which individuals with access to a public resource act in their own interest and, in doing so, ultimately deplete the resource.
The Ingenesist Project uses Game Theory to create a situation in which individuals with access to a public resource act in their own best interest and, in doing so, ultimately preserve the resource.
It is called The Value Game because it creates value rather than destroying value.
This value is represented by a cryptographic token which in turn compensates the players.
A Value Game allows the value of collaboration to exceed the value of competition.
By eliminating incentives to cheat, a Value Game is more efficient as no punitive friction is required.
By rewarding self-interest, there are no limits on human ambition.
By preserving public resources, sustainability of our civilization is assured
Knowledge is stored, transferred and applied by unique people with unique experiences in dimensions of space, time, context… and the 6 known natural senses.
The resumé attempts to convey this complex asset by reducing it down to 2 dimensions to fit on a PDF file.
A computer reduces the resumé to imperfect keywords before passing it through filters for upload to the hiring team.
This isn’t how people are found, this is how they are lost.
The problems of the future can only be solved by diverse and strategic combinations of knowledge assets.
The Ingenesist Project uses game theory, blockchain, and artificial intelligence to convert intangible assets to a more tangible form. So that people can find each other.
AI will create far more content than humans can consume.
Fortunately, people can just use Artificial Intelligence to interpret all of their Artificial Intelligence. What could possibly go wrong?
In reality, nothing “economic” happens until two or more people come together and make something useful.
Search Engines of the future must therefore identify the most worthy knowledge surplus and match it to the most worthy knowledge deficit in order to achieve a net productivity gain.
That is what opportunity, equity, and access are made of.
That’s what innovation is made of.
That is what money is made of.
The Ingenesist Project uses game theory, blockchain technology, and artificial intelligence to convert intangible assets to a more tangible form.
Nobel Economist Robert Solow calculated that 80% of economic growth is the result of advances in technology. This Makes sense. Technology makes us more productive.
However, GDP measures the products, not the producers. Engineers, Scientists, and Technologists are responsible for ideation, design, and implementation of new and improved technology.
Unfortunately, Engineers, Scientists and Technologists are classified as “intangibles” Intangibles are, in turn, classified as expenses to be minimized, not investment to be maximized.
Here’s the good news… 80% of the true global economy is simply hidden from view. Trillions upon trillions of dollars are sitting on the table waiting to be measured into existence. Can you see it?
The Ingenesist Project uses game theory, blockchain, and Artificial Intelligence to convert Intangible Assets into a tangible form.
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Analysis
The purpose of this video is to synthesize the simplest interpretation of value and test that against prevailing economic principals. Engineers, scientists and technologists are treated as EXPENSES, let that sink in. If they are not assets, then they are LIABILITIES… full stop. This is a clear, present and vastly consequential flaw that must be addressed by someone somewhere.
Otherwise, if there is no institution willing or able to defend this flawed economic principal, then it is super-vulnerable to disruption. We need to maximize innovation, not minimize innovation. There needs to be a wholistic and systemic approach to solving problems in the world. We must head off global systemic risks. As clever and experienced as the VC community is, they cannot be expected to pick and choose winners and losers in the next economic paradigm.
There is far more ‘money to be made’ by shifting engineers, scientists, and technologists to the ASSET column of the global balance sheet.
A firefighter is worth millions of dollars per hour preserving lives and property… but only when there is a fire. A Fire Protection Engineer can design thousands of buildings that will never burn.
In the absence of a fire, the true value of the Scientists, Engineers, and Technologists is invisible. But the value of their economic contribution continues to persist.
What if we could measure the true value of intangible assets into present value existence. A massive new asset class would be unlocked.
The Ingenesist Project uses Game Theory, Blockchain, and Artificial Intelligence to convert intangible assets into tangible form, at scale. There is no shortage of money, only a shortage of imagination.
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Analysis
The purpose of this video is to demonstrate how engineers, scientists, and technologists remove RISK from complex systems. Risk is directly correlated to “return” and, therefore, profits.
So what happens to all of that value that a single diligent engineer creates when they remove all of the risk? Is it paid to the engineer? no. Is it returned to the non-victims of the calamity averted? no. Is captured by the the banking system as some form of arbitrage? Yes, absolutely, yes.
This is the deep dark secrets of finance. Don’t let the engineers, scientists, and technologists know that they are paid 2-20% of what they are worth. They may want free stuff like healthcare, job security, or royalties, or else they’ll go build something else that pays better social dividends. Can’t have that.
Obviously the question becomes, what happens when there are no more engineers to eliminate risk? There is a tipping point and we are dangerously close to approaching it. These things are easy to measure, assess, and resolve but there needs to be an institution able to secure material facts and assert the economics of those facts.
What if there was a tiny and nearly imperceptible flaw in Market Capitalism that could be easily corrected? To do so would solve many of society’s most pressing needs without disrupting the institutions upon which we depend.
Technological change must always precede economic growth. We are going about the business of civilization as if economic growth must always precede technological change. It’s like driving a car while looking through a mirror. In other words, money is not the cause of innovation. Money is the result of innovation. The implications of this tiny flaw impacts everything from Climate Change and Social Equity to Venture Capital and Global Debt.
It started with classical economic theory. In the 1700’s economic inputs such as Land, Labor, and Capital were easy to measure. The products that resulted from these inputs were also easy to measure. However, in the 1700’s; social, creative, and intellectual inputs by humans were not so easy to measure. Accountants call them intangibles, but they are simply “invisibles”.
Today, this is an easier problem to solve. Ironically, technological Change has brought us new ways to measure intangible assets. All we need to do is convert them to a tangible form. The resulting economic growth will far exceed global debt because there is no such thing as “not enough money to innovate”. Together we can correct A Tiny Flaw
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Analysis
This is largely the initial video in the series and the first that we published. Attention should be drawn to the idea that maybe there is a tiny flaw that can be easily corrected. Instead of trying to solve every single problem that is strangling civilization as we know it, we could solve one single problem and the other problems will solve themselves.
The question becomes: are we too vested in our misery to even consider such a possibility? Are we so narcissistic to believe that our particular problem is the one that must be solved even if it worsens someone else’s problem? Are we all expecting the “other guy” to change and that will make your world work? Good luck with that.
The flaw is no tiny, so hidden, yet so obvious that it defies the imagination. All we need to do is measure ourselves differently. Who is stopping us from doing this? nobody. What law says we can’t do this? There is none. And if we do correct the flaw, who suffers? No one.
A Knowledge Inventory System; The Ingenesist Project
Have you ever wondered why the credits at the end of a movie are printed so small and scroll by so fast? The credits are not there for your benefit. The credits exist for the benefit of the movie industry.
Film production is a highly intellectual, creative, and social enterprise. In other words, Hollywood is denominated by knowledge assets. The rolling credits serve as a knowledge asset inventory system for all things needed to make the next movie.
Everything revolves around being on the credits or being known by people on the credits. This is how people find each other. The rolling credits make this possible. Not unlike a blockchain, in order to cheat the system, one must alter every instance of the celluloid reel or digital file.
Engineering, science and technology are also social, creative, and intellectual industries fueled by knowledge assets. Not unlike a blockchain, engineering processes are irreversible and immutable.
When we look at a sturdy bridge, or magnificent structure, or a brilliant piece of software, there is no easy way to find the people who are responsible for a specific element of that work. The Ingenesist Project uses game theory, blockchain, and Artificial Intelligence to create a knowledge asset inventory so that Engineers, Scientists, and Technologists can find each other.
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Analysis
Engineering and science have long been compared to the Arts as a creative profession. The point of this video is to demonstrate how other creative professions deal with the intangibles gap. While the Hollywood system has its own set of pros and cons, the comparison is worthwhile. Notably, the arts often compensate creators with “royalties” while engineering, science, and technology most often pay hourly wages.
In addition, there are comparably fewer barriers, silos, or human resource management hurdles to navigate for artists. They don’t attempt to reduce a 4-dimensional performance down to a 2-dimensional CV/resumé. Instead, they can submit the 4D performance as their resumé. A great deal of efficiency is retained.
An Algorithm For Innovation; The Ingenesist Project
A useful definition allows people to identify, replicate, or measure the subject being defined. Yet the best definition we have for Innovation is basically, “You know it when you see it”.
How can we sustain our world if we cannot even define the sole instrument of change?
Have you ever had an epiphany? That ah-ha moment that comes from deep within… …when suddenly your knowledge about something grows exponentially within a very short period of time? Let’s call that “innovation”, where one large innovation is comprised of many smaller innovations.
In order to measure innovation, all you need to do is measure the rate of change of knowledge with respect to time. You don’t need Calculus to recognize this as an algorithm for innovation … but it helps.
If that idea doesn’t change the world, nothing will.
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Analysis
Innovation is a great mystery that does not need to be. Everyone innovates – it is necessary for survival. Yet the magic and mystique of the innovator is a cultural phenomenon that forms the foundation of tech social status. Innovation is denominated in money – if you are not flush with cash, then you are not an innovator. Only VC can be innovators due to their ability to navigate financial markets. It almost seems that the more difficult it is to identify something, greater scarcity can be assigned to it. With greater scarcity come greater value. Again, when we become vested in our own misery, progress grinds to a halt.
This is all quite counter productive.
The problems of the future will require innovation, creation, new ideas, and vast execution at an astonishing scale. In order to achieve true economic sustainability, we need to a metric to denominate true value, not propped up scarcity value.
It is relatively easy to create and measure where high rates of change are occurring in a community or society. It is then relatively easy to observe what innovations take place as a result. This isn’t exactly a unicorn farm, but you probably can’t have a unicorn without these conditions in the first place. It is then only a matter of memorializing these conditions in a tangible form.
Innovation is not linear Modern civilization did not begin 10,000 years ago with 250 Trillion dollars sitting in a box somewhere in the desert.
Money was measured into existence as a function of the things that scientists, engineers, and technologists built. Innovations such as the wheel, wedge, and lever came long before the invention of International Trade Agreements Innovations in machinery, transportation and energy enabled advances in sanitation, healthcare, and computers
Yet, the wheel, wedge, and lever are more important and more widely applied than ever. Wouldn’t it make more sense if we developed a monetary system backed by the dividends of innovation rather than the gravity of debt?
The Ingenesist Project uses game theory, blockchain, and artificial intelligence to measure the true economic contribution of engineers, scientists, and technologists.
The Ingenesist Project Uses Game Theory, Blockchain, and Artificial Intelligence to convert intangible assets to a more tangible form.
Part One: Observe The game is based on a system of claims and validations among a population of players.
Part Two: Measure Blockchain acts like a giant datalogger that captures time-value data of game transactions.
Part 3: Predict The Percentile Search Engine predicts the likelihood various combinations of players would produce novel outcomes.
These three applications acting together create a virtuous circle that converts intangible assets into a more tangible form. Join The Ingenesist Project
Analysis
In almost every video, we make the statement that The Ingenesist Project uses game theory, blockchain, and AI to make intangible assets more tangible. This sounds pretty complicated, so how do you explain it in under a minute? The audience deserves to know how we intend to deliver on the promises that we are making.
The answer to this, and almost every engineering or scientific problem, boils down to making observations, measuring outcomes, and predicting future results. The same should be true here.
We’ve also stated that engineers remove risk from complex systems. Risk assessment follows a similar sequence; first you need to identify the risk exposure, then you need predict the likelihood it will manifest, then you need to measure the consequences of the event.
The game sets things into motion, the blockchain records the motion, and the AI reads the recorded motion and predicts the next point on the curve.
So what may seem like a very complicated and jargon laden geek storm is actually an extremely simply set of tasks that almost everyone already practices in the professional lives. Why reinvent the wheel?
To borrow from a famous quote: “Uber, owns no vehicles… Google and Facebook create no content… Alibaba holds no inventory… Airbnb owns no real estate….” But they have a combined value of almost 3 Trillion dollars. This is very interesting.
Whereas most companies are priced according to strict financial performance, Network platforms provide a virtual bridge that connects people to each other. They are priced proportional to the square of the number of human connections they serve.
This is known as Metcalfe’s Law of Network Value. If network platforms create a virtual bridge connecting people, why can’t we value real bridges using Metcalfe’s law? Why can’t we value roads, airports, buildings and all manner of engineering, scientific, and technological infrastructure as proportional to the connections they serve?
The Ingenesist project uses game theory, blockchain, and artificial Intelligence to convert intangible assets into a more tangible form. Join The Ingenesist Project
Analysis
We often say that Engineers, Scientists, and technologists need only to measure themselves differently in order to become “more tangible”. Most people’s eyes glaze over as if we’re living in some fantasy world. This video demonstrates that principal exactly as it happens with network platforms that are popping up everywhere around us. Really, we’re not making this up.
Metcalfe’s law arose from the telecommunications industry to measure the utility of telephone connections. The value of the network grows exponentially with the number of points in contact. Let’s start by saying that telephone networks themselves are a creation of engineering and scientific professions.
The engineering value of a bridge is equal to it’s replacement cost – so that’s what they pay engineers to create one. However, the economic value of the bridge includes every transaction, truck delivery, soccer game, doctor appointment, and math class that resulted from the ability for 10,000 people per day to cross the river.
Facebook, Google, Alibaba, AirBnB, et al, could not exist if they were valued according to their replacement cost. Imagine what amazing works of engineering, science, and innovation are non-existant today only because it is valued incorrectly.
As the saying goes, money makes the World go around. This may not be entirely true.
Where risk is high, the cost of money is high. Where risk is low, the cost of money is low. Engineers, scientists, and technologists specialize in removing risk from complex systems. So, why is there never enough money to mitigate the world’s most pressing risks?
Fortunately, all we need to do is reorganize engineers, scientists, and technologists and the money will surely follow
The Ingenesist Project uses game theory, blockchain technology, and Artificial Intelligence to reorganize the engineering and scientific professions.
This video poses a legitimate question. If there is money to be made by mitigating risk, why are Engineers, Scientists, and technologists classified as expenses (liabilities), and not assets on global balance sheets?
It’s amazing how vested we are in this staggering little flaw in market Capitalism.
Solving the problems of the future will require humans to innovate at an astonishing rate… … far greater than anything our existing economic system can support. In order to achieve this, there must be a fundamental shift in how knowledge assets are measured, curated, and exchanged.
Today, a traditional bank distributes money backed by your promise of FUTURE productivity. Innovation is also a promise backed by FUTURE productivity. Two currencies backed by the same underlying asset are readily convertible.
In the future, an Innovation Bank, would issue currency backed directly by the true value of innovation. All we need to do is measure ourselves differently.
The Ingenesist Project uses game theory, blockchain, and Artificial Intelligence to convert intangible assets into a more tangible form.
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Analysis
The Innovation Standard is a reference to the Gold Standard or the Debt Standard, or the Oil Standard, etc. Whatever the standard, it needs to represent human productivity or else nobody would work in exchange for it (think about that for a sec).
The problems that face the world are global and they are systemic. That means that free markets technically don’t exist and the next thing that needs to be produced is the thing that society needs. Sure everyone wants a new Lambo, but it’s not very useful if the roads are too rough to drive it. Sure.Bitcoin is awesome but it’s contingent on a reliable energy grid. Sure, I love AI and much as the next geek but who’s going to read my content if they lack education to act on it?
Money as we know it just does not move fast enough. It does not represent the true productivity of Moms and Dads, soccer coaches, engineers, Scientists, teachers, and event organizers. Money needs to be produced as thenet sum of productive human behaviors. People know what problem needs to be solved next and if you give them the tools to fix things, they will.
Competition is one way of arriving at the optimal solution to a problem. Some call it the “Law of Nature”, survival of the fittest – where the final score can only be One to Zero. Unfortunately, in order to feed the winner, we must cultivate suitable losers. Evolution is slow and inefficient as a business optimization tool.
The laws of Nature provide infinitely more examples of collaboration than competition. Even if one player does not win today, their capacity to innovate remains to continuously improve the game for everyone later … if we let them.
The Ingenesist Project uses game theory, blockchain, and artificial intelligence to convert intangible assets into a more tangible form. Join The Ingenesist Project
Analysis:
This video acknowledges the value of competition as a solution optimization tool. So competition is not being called into question. However, a different problem involves preserving the knowledge, innovation, and wisdom that was created in the act of competition so that they can be developed in future or tangential problem solving environments.
Economics is the science of incentives which invariably invokes the discipline of game theory. we do have complete control over how a game is played, how players are preserved (or destroyed) and how equity is distributed. As such, we have complete control over the sustainability of the game which is ultimately in the best interest of everyone.
The conclusion is that a game which maximizes the health and welfare of the players ultimately maximizes the value of the game.
A bank won’t lend money to a project that is not insured. An insurance company will not underwrite a project that is not properly engineered. Engineering projects need to be financed to cover the cost of design and construction.
This is the Virtuous Circle of economic development. If any part of this cycle is broken, incomplete or corrupted, economic development fails.
Financial institutions simply issue paper receipts called “Money” to represent the actual things that engineers, scientists, and technologists create.
Money is, in fact, the intangible asset and engineering is the tangible asset! We’ve gotten it backwards.
When a virtuous circle reverses itself, it becomes a vicious circle. This is where we are today Fortunately, this is an easier problem to solve. The Ingenesist Project uses Game Theory, Blockchain, and Artificial Intelligence to reverse this vicious circle.
The purpose of this video is to introduce the big picture of how the Innovation Bank will integrate with existing financial networks to make the production cycle more efficient and more responsive to systemic risk.
The point of this video is to isolate the idea that our global economy is an interrelated system with 3 critical components that must be integrated and operating at peak efficiency in order for the economy to serve global citizens equitably.
The challenges of the future will require humans to innovate at an astonishing rate – far more rapidly than our current financial system can support. There is no way that Venture Capital – our current “best bet” – can respond to the speed, breadth, and depth of technological change.
The problem ahead is systemic risk. It is not possible for a collection of competing VC to pick the winners and the losers of the next economic paradigm. Unintentionally, the the VC system may cause more damage than good.
This idea is useful for when we introduce the game, blockchain, and AI components – the blockchain serves as a check valve that allows the virtuous circle to spin in only one direction. The game mechanics provide the energy to keep the virtuous circle spinning in the right direction, Augmented Intelligence will help identify what components of the system are operating optimally so that innovation can be applied correctly.
Decentralization is the rallying cry of the Blockchain Movement.
Few people realize that the Science, Engineering, and Technology professions are already decentralized. Unlike Banking and Finance, there are no all-powerful incumbents that must be vanquished. And the laws of Nature already apply to everyone.
Instead, Scientists, Engineers, and Technologists are contained by innumerable silos that have little to do with the Natural Laws We are segregated by jurisdiction, academia, ontology, corporations, politics, Trade Groups, Societies, international borders, and much more.
We represent 5% of the workforce but are responsible for 80% of economic growth. But collectively, we are weak, disorganized and powerless to prioritize the needs of our World. The only thing standing in our way, is ourselves. This is a much different problem than decentralization.
The Ingenesist Project uses Game Theory, Blockchain and Artificial Intelligence to remove the silos that divide us.
Analysis:
The single point of this video was to introduce the distinction that a centralized institution and a collection of compartmentalized institutions may have similar characteristics to the participants, but are not the same thing. The former is far more difficult to disrupt while the latter is entirely vulnerable to disruption. This represents a huge opportunity for those who can see the distinction.
This idea plays a central role in the execution of The Innovation Bank. Where many see a stone wall of resistance to change, there may actually exists a paper veneer.
Have you ever wondered why a soccer goal has a net? The purpose of the net is to provide a visual contrast so that 50,000 observers can immediately reach a consensus that something very important has happened.
After that, a digital token is awarded to the team that scored a goal. The digital token also secures valuable business intelligence like game strategy, player stats, league standings, revenue, and everything else.
However, the consensus is by far the most important part. With the consensus, a player can make a lot of money. Without the consensus, they are invisible. With the consensus, the community can invest in a new stadium. Without the consensus, we can only play at the school yard. With the consensus, the economy flourishes. Without the consensus, it fails.
Lots of crypto projects have these same pieces. But mostly, they are mixed up. The Ingenesist Project uses Game Theory, Blockchain, and Artificial Intelligence to secure community consensus.
We are engineers — the type that makes airplanes that plane, bridges that bridge, and elevators that elevate. The type of engineers that supply electricity to people and their Bitcoin – which was likewise created by engineers on an interface platform that was (you guessed it!) created by engineers. No offense to bankers, lawyers, and politicians, but they can’t do what engineers can do for an economy. So let’s leave them out of this discussion for now, and work with what’s obvious to engineers.
Yes absolutely, a Central Bank Digital Currency (CBDG) is a great idea
But like anything in engineering, the devil is in the details. First, the dollar is already digital so any improvement would need to be less centralized and that means blockchain. We also know that the proof-of-work consensus algorithm is too energy intensive so it must be proof-of-stake, or equivalent.
No intrinsic value equals no value, period. The CBDG must represent something real and useful, otherwise nobody will produce stuff in exchange for it. The Federal Reserve needs to figure out what tangible metric will bring the digital currency into existence. For example, the dollar represents aggregate US human productivity.
Aggregate Technological Change (ATC)
The new CBDC should not be issued as a function of Gross Domestic Product (GDP). The dollar already does this. Rather, the new CBDC should be issued against a new metric called Aggregate Technological Change (ATC). Technological change is a fancy word for “innovation” resulting in an increase of human productivity. This is the domain of Engineers and Scientists.
With this arrangement, the dollar and the CBDC would be fully convertible because they both represent the same asset class i.e., human productivity. The two currencies would be supplemental and complementary to each other. They would check and balance the other. At some point they will become the intrinsic basis for the other. A condition can then emerge where it becomes more profitable for Digital Capitalists to preserve the underlying asset rather than consume it. Ultimately, that underlying asset is the continued productivity and preservation of Planet Earth and her inhabitants.
The missing piece:
We need to come up with a reliable system to identify and measure the fact of innovation before it happens. The Ingenesist Project is developing a novel business method and platform combining game theory, actuarial math and blockchain technology to convert intangible assets into tangible assets. The issuance of each unit of CBDC can then represent the intrinsic value of this new asset class.
We are not bankers and we are not saying that this is final answer. However, we are certainly early pioneers in the topic of a supplemental US digital currency long before the Federal Bank Announcement. Our work in this area has been published (juried) by the NSPE, ASCE, ASME, NAIC/CIPR, NSF, and many others.
A few key points:
If built correctly, a CBDC is a great idea
If not, the CBDC may be no better or worse than a digital dollar.
No intrinsic value means no value. Period.
Money must represent human productivity. Otherwise, no one will produce stuff in exchange for it.
The underlying asset is Earth and her inhabitants – and must be preserved, not consumed.
Conclusion
So there you have it — an engineer’s interpretation of the new Central Bank Digital Currency.
The next time you’re sitting on an aircraft separated from instant death by .040 inches of aluminum skin, please feel free to disagree with your engineers and scientists. Now that I think of it, what is a perfect analogy for the state of the world!
It is not as easy as it may seem to find a working definition of innovation. There are as many definitions as there are experts claiming to hold the secrets of innovation. The simplest definition of innovation that I could summarize based on top sources is as follows:
Definition of Innovation 1: A new idea resulting in an economic outcome.
The problem with this definition is that you cannot solve solve one equation with two or more unknowns. What is new? What is an idea?, and What constitutes an economic outcome? Finally, How can we identify innovation before it happens? These are significant barriers. I spoke with one VC about this problem and his response was:
Definition of Innovation 2: “I know it when I see it”
A definition is supposed to be distinct and precise. One should be able to predict, identify, or anticipate the object based on its definition. It appears that innovation can only be defined after the fact and not before, by most accounts. As a result, we treat innovation as if it were random or accidental or so unique that only a gifted few possess the ability to achieve it. This is important because innovation is the single most important determinant of achieving a sustainable economic environment.
Economics is the science of incentives. Calculus is the science of change.
When I was about 6 years old I got my first bicycle. It was a single data point sitting under the Christmas Tree. It came with a little pamphlet with lots of information on how to use it. My first attempt started just like the pamphlet described, until I crashed. The promise of stylish and speedy mobility was a strong incentive. Each time I crashed, my knowledge of bike riding increased at a very rapid pace as I developed new ideas about balance, coordination, and impact. I frantically innovated solutions to my problems until I was successful. As I progressed to bigger bikes and various motorcycles, I developed the ability to anticipate reactions to future obstacles based on a so called wealth of past experiences. I had developed Wisdom.
Toddlers can be readily observed innovating ways to carefully descend the stairs backwards on their tummy. This thought sequence repeats itself continuously throughout their formative years and into adulthood. A wise person is generally witnessed a great many outcomes and always seems to know what to do, when to do it, and why it should be done.
Hang on as this is going to get a little bit wonky:
Most engineers and scientists would recognize the following as a differential equation. The relationship between data, information, knowledge innovation, and wisdom are classic derivatives:
The value of information is derived from the value of the data
The value of knowledge is derived from the value of the information
The value of innovation is derived from the value of the knowledge
The value of wisdom is derived from the value of the innovation
This is the basis of the WIKiD Tools algorithm (Wisdom, Innovation, Knowledge, information, Data) developed by The Innovation Bank
Definition of Innovation 3: Innovation is proportional to the rate of change of knowledge with respect to time.
I certainly don’t expect a call from Merriam-Webster or widespread agreement from the innovation consultants any time soon. What is important is that this definition does not contradict any of the other definitions. And, it can be easily expressed as an algorithm suitable for machine learning, with data points that can be identified, measured, and validated.
We can now go about he business of creating conditions where knowledge is allowed to increases at a very high rate. Innovation cannot happen in a vacuum.
The Holy Grail of Finance
Predicting the fact of Innovation before it happens is the holy grail of finance. While many corporations and venture capitalists are somewhat successful at identifying a single product that will produce an economic outcome, they do it at the expense of foregoing the ecosystem from which that product arose. As such, predicting the Return on Investment (ROI) may be easily skewed by ignoring the broader social consequences of the product. Deficiencies in data, information, knowledge, and wisdom are the leading factors in start-up failures, not innovation.
Using a sports analogy, competition is a good way at arriving at the best solution to a specific objective. But in order to arrive at a single winner, you must first manufacture 10 times more losers. While conflict and competition is indeed entertaining, this is a very expensive and inefficient way to go about meeting the needs of consumers, let alone a crowded planet.
Intrinsic Value
Innovation is ubiquitous, interconnected, and interdependent on a sequence of factors shared across diverse people and places. Innovation is the intrinsic characteristic of our species and wholly responsible for the advancement of civilization itself. Everyone groans about how money is losing its intrinsic value because of inflation, corruption, or runaway national debt. As a result, cryptocurrencies conveniently drop the idea of intrinsic value altogether. People look to government, charismatic leaders, academia, and industry to solve staggering systemic risk and environmental collapse – to no avail.
Yet, all along, there may just be an extremely simple and inexpensive way to represent the intrinsic nature of innovation as the basis of value that we can quite literally pay for our own preservation. The following chapters describe this method. Please join us at The Ingenesist Project
What single problem must all engineers solve? Hint, the answer so simple, you can’t even see it.
The Paradox of Invisibility:
A firefighter may be worth a million dollars per hour when there is a fire and they courageously save lives and salvage property. The value of the firefighter is derived from the severity of the fire. On the other hand, a fire protection engineer can design a thousand buildings that cannot burn. But the true economic value of the engineer cannot be measured in the absence of a fire. The same can be said of aircraft that do not crash, bridges that do not collapse, and pandemics that do not spread, etc.
What single problem must all engineers solve?
Answer: engineers remove risk from complex systems. This is true for every single engineer and may even serve as an adequate definition for engineering at large. Engineers increase human productivity by reducing the risk to human life and property when confronted with the natural constraints such as gravity, temperature, impact, etc. The value of engineering is literally immeasurable.
But wait, risk can be measured. Insurance companies and financial institutions do it all the time. The method is a little bit counterintuitive, but actually quite simple and well suited for computational analysis. A simple example is presented below to lay out the data process which may be scaled by machine learning and instrumentation. All data must be true and validated in order for the math to work out. Here goes:
A Simple Example:
Consider 10 identical cabins in the forest. Each has a replacement cost of $10,000 dollars. It is well documented that one will burn down every year but nobody knows which one is next. So each owner needs to hold $10,000 dollars in the bank in case their cabin burns down. Because all of the cabins have the same replacement value and all have the same likelihood of burning, the cabin owners determine that they can each throw $1000 into a pooled savings account every year and whosever cabin burns can use the money to rebuild. So instead of tying up $10K each, cabin owners must only hold $1K each. The remaining $90K total can be released for investments and economic growth. This is called a “mutual”and it is the foundation of the insurance industry.
Engineers solve risk in 3 ways:
Engineers follow a similar thought pattern when addressing problems – this is so natural that they often don’t realize they are doing it.
They first invent ways to identify the existence of a peril.
Then they invent ways to reduce the probability that the peril will happen.
Finally, they invent ways to reduce the severity of consequences if the peril does happen.
Each of these actions are identifiable, verifiable, and measurable.
The Innovation Bank:
The Innovation Bank would serve as a data logger to curate the validated claims of all fire protection engineers which can be analyzed to estimate how much risk has been removed from the “fire economy”. This value can be represented as a cryptographic token (on a dedicated blockchain) that may be purchased by banks, insurance companies, municipalities, corporations and property owners to access the database to better understand their specific risk exposures across a wider spectrum of ignition sources.
The value of the tokens compensates the engineers to perform more comprehensive fire safety surveys and mitigation strategies. This positive feedback loop eventually reducing total risk the near zero.
This same token can be applied to all engineers and scientist for all applicable physical and environmental risk reduction.
The World is on fire
The example above describes only one example of one peril related to one engineering discipline. The reality that confronts civilization today include multiple complex global systemic risks impacting nearly every facet of life on Earth. These include, but are not limited to, climate change, pandemics, political instability, grinding debt, wealth inequality, and more.
The only way to untangle every contributing risk exposure and replace it with comprehensive solutions that do not break the bank is to introduce a parallel financial system that hedges the one currently being stretched to the limits. A digital token that represents Engineering and Scientific risk mitigation would be mutually convertible with national currencies and therefore taxable and transparent to regulatory standards. The two currencies would hedge each other. This is what a balanced budget could look like.
What is an Innovation Bank? At first blush, an Innovation Bank sounds like a place where innovators can make money for developing their ideas. Sort of like venture capital. But if we drill down a little further and look at how a traditional bank actually functions, we find a far more interesting opportunity.
People go to a bank and borrow money to, say, buy a house. Most people think that the bank is sitting on a bunch of cash in some savings account waiting to buy your house for you until you can pay them back. This is not entirely true.
Money is measured into existence.
When you sign the loan papers, you are committing your future productivity as collateral for the loan. From the simple act of signing a document, you create an asset called “my future productivity”. Through the miracle of fractional reserves banking, the bank can then conjure into existence the net present value of your future productivity to settle the note on your house. Money is literally measured into existence where your promise to pay is the underlying asset. The house is the game incentive that motivates you to go to work. Your productivity combined with everyone else’s forms the basis of your national currency.
Most people are shocked when they see how simple this process is. Money must represents human productivity – otherwise nobody would work in exchange for it. Debt is just a fancy name for future productivity, which is productivity nonetheless. The bank is the place where this accounting ledger is secured, not so much the money.
The image in the mirror.
Innovation and debt have a lot in common – for better or worse, they both represent future productivity. If debt can be used to measure money into existence, then innovation can be used to measure money into existence as well. The difference is that the consumption of objects that you make is easier to measure than the innovations required to create them. In a way, venture capital is an aberration – the thing that should not need to exist if we could measure innovation in any other way. The Innovation Bank was developed to solve the innovation paradox.
The Innovation Paradox
The invention of the wheel, wedge, and pulley came long before the invention of international trade agreements. Technological change must always precede economic growth, yet innovators still need money (economic growth) before they can afford to create technological change. This is the innovation paradox. We are living in the mirror image of the economy that was supposed to happen — and we think this is reality. The financial system has gotten it backwards. Corporations and VC can select and prioritize what gets engineered and what does not, but there is little regard for the wholistic nature of innovation – to preserve scarce resources rather than consume them. As a result, the true potential for value creation by the innovators of the world goes fallow.
The Innovation Bank resolves the innovation paradox by issuing a digital token on a native blockchain that represents the intrinsic future productivity of engineers and scientists. Not unlike a traditional bank, the Innovation Bank also employs a ledger, a value game, and actuarial math. Also like a traditional bank, a claim and the validation process represent the act of committing an asset that represents future productivity. The interconnections of these assets provides important data driven business intelligence to a market. The market responds by placing a value on the token to incentivizes production of more innovation.
Taken together, The Innovation Bank prints money in the exact same way using the same systems, methods, and institutions as traditional banking. The difference is that The Innovation Bank increases human productivity whereas a traditional bank consumes it.
