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The Next Economic Paradigm

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Decentralized CRM With Curiosumé

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On March 6, 2015

In General Information

(Photo: New York Times)

Modern CRM (Customer Relationship Management) emerged from the boiler rooms of corporate sales departments. They needed a way to keep track of contacts, leads, calls, and ping schedules.  Soon they added client information like DOB, Spouses name, neighborhood news, etc.  The customer responded remarkably well, in fact, perhaps too well – they started asking for things like better service, warranty claims, and “can I get that in purple”.

Salespersons, being so closely tied to the revenue, began telling the service department that they are choking revenue,  and telling the warranty department when customers are defecting, and telling engineering to introduce new features.  They got away with it because they had management support as a revenue driver.  Pretty soon CRM systems began migrating across the enterprise evolving along the way. Ironically, CRM now finds itself losing touch with the customer despite the ever increasing amount of data that now populates the hit sheets.

Recently, we were asked to consider scenarios for Curiosumé applications in a CRM role in the financial industry. There are several important features of Curiosumé that can reconnect the customer to the enterprise.

Top level ontology in the commons
Instead of controlling people’s information, set it free and watch where the client leads you.  When all market channels pull their information from the same network of nodes and branches, they can always be current and synchronized. When the client adds information to the commons, this becomes available to the vendor outside of a firewall eliminating many security issues.  You don’t necessarily need (or want) to know the ID of the client in order to serve them better.

Anonymity layer / autonomous matching:
AUPOT (Anonymous Until Point of Transaction) allows clients to deploy anonymous personas so that they will be more willing to;

  • reveal true intentions to the commons,
  • perform their own pre-analysis in the commons
  • increase their insights and contribute that to the commons.

Customer Controls Their Data:
Help the client own and control their own engagement data.  Give them the same tools and opportunities to experiment as researchers as the Big Data wonks have.  Allow them to delete, save, edit or have as many different personas as they want. Let them deploy and retract personas as a way of finding you.  A better and more efficient relationship will emerge between both sides of a transaction.

User interface layer:
Instead of leading your client like cattle through an arbitrary ontology tree, show them photographs that corresponds to nodes in the common ontology.  These can then be matched algorithmically to advisors, products, or different departments in the firm, in real time.   In essence, you can create a multi-agent algorithmic game in a user interface that could be fun, engaging, and sticky as heck.

Advisor interface:
When a client chooses to engage the advisor or a product or a transaction,  they can submit their persona into the algorithm to select specialized advisors or a team of advisors. Only at the point of mutual acceptance, both players cross the firewall and engage in honest, trusting commerce. Layers and layers of bureaucracy, vetting, and security breaches can be eliminated until the actual exchange is made.

(Photo: The Philadelphia Orchestra)

Powerful Feature:
One of the most powerful and least recognized features of Curiosumé is the ability to constrain a “score” to a number or a range. One reason for this is to create imbalance around the mean – when the system is not balanced, it can never be static and will always have some movement (regression toward the mean).  It will become largely self-managing, self centering, and even a little joyous.

For example: if we constrain the client to having a Curiosumé score of zero; that means that for the total of all (+) sigmas, they must also accumulate an equal and opposite total of  (-) sigmas such that their net total is zero, in order to pass “go”. When we lay this back on to the top level ontology (Wikipedia), we can find a series of paths that unite the (+) sigmas to the (-) sigmas.  This path tells us a GREAT deal about where the client wants to go.  Likewise an older client may prefer a net (+) portfolio where a younger client may prefer a net (-) portfolio.  Decentralized CRM with Curiosumé can also be applied to risk pooling in the same manner. The deviation s from the mean and resulting movements are precisely how we would price the derivatives of intangibles, i.e. tangibles.

Outcome:
Decentralized CRM with Curiosumé is readily ready to happen. We know that people, advisors, and products can be brought together in personal and emotional engagement when they intersect paths of common interest. This is the weakness of both the barter system AND modern technological Capitalism  If we can envision interests flowing dynamically along vectors, we will have the ability to align human incentives and the markets that depend on them.

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The Future Is Common Knowledge

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On February 26, 2015

In General Information

Image Credit

Few people recognize the true economic potential of Wikipedia. Obviously, Wikipedia is an important resource for individuals and profit making companies.  It would take Billions of dollars to recreate it from scratch. But the true value of Wikipedia does not end here.

Wikipedia is a really huge set of interconnecting nodes – a massive dynamic database in the commons. When two points are connected, the magnitude and direction of the resulting line provides information about the data and proximity to other data.  Wikipedia is a venerable roadmap of connections between significant people, places, things, and ideas. Not unlike the Facebook social graph, Wikipedia in aggregate is a knowledge graph of humanity.  It is therefore as perfect a representation of humanity because it was created by humanity.

Mass Encryption

One of the more effective ways to encrypt data is to hide it among other data. In fact, your personal knowledge graph, stripped of  personally identifiable information can be hidden – like a needle in a haystack – among the wikipedia knowledge graph.  Your knowledge graph can then extrapolated along the nodes, edges, and paths of Wikipedia to draw inferences, make decisions, or set priorities for yourself and your interaction with the community.  It’s like your own private Big Data engine that only you can see.

The idea behind Curiosumé is to develop that vehicle from which a person can interpret actionable information when they overlay a persona (or Proxy) of themselves on the Wikipedia commons.  When many people overlay their personas to the Public Wikipedia Haystack, they can specify criteria out of nodes and branches of the wikipedia knowledge graph to find each other, to work together, to learn and teach.

Enter Block Chain

Each owner holds a private key in a cryptographic vault to their proxy that they can share, rent, or retract from others. The Private key is the only way to associate the owner with their proxy and with the commons. Mutual private key exchange will define a market for intangible assets among owners of such assets.  This exchange device would be ideally suited for a cryptographic platform such as Maidsafe protocol or Bitcoin Protocol.

Connections, intersections, and resultant “vectors” will reveal patterns from which decisions can be made.  The future economy may include the exchange of private keys.

Level Playing Field

As long as proxies – or personas – are anonymized, it would be OK for everyone to have access to them in the commons.  In fact, the quantity and the quality of the personas in the commons for a community or location could underwrite the currency of that community.  Everyone would have the ability to test their persona in the public domain upon any market to reveal their greatest economic potential.  Such a community currency would have a relative value to other communities not unlike, say, Forex.

The community can even test their own combined personas against a host of scenario proxies such as job proxies, investment proxies, etc., all without committing personal information. However, when two or more parties engage in transaction and/or interface with a regulatory agency, they will need to reveal their private key in order for a transaction to pass a pre-established compliance proxy that is also comprised of nodes and branches in the commons.

The Art of War

It would be very difficulty for people to violate another person because they will need access to the other person’s private key as well as a change in the commons in order to formulate a deception. If they modify the commons, they will in fact reveal themselves as a transaction.   If a perpetrator can somehow change the other person’s proxy, then they will notify others connected to that proxy of that change. Further, the perpetrator may be unwittingly doing more harm to themselves than good in their own connection to other proxies when attacking a particular persona – any action, except the truthful action, could have implications that are unknowable.

As such, there is little incentive to cheat.

Cloud Wars  

As such, any disputes will be fought in the commons and not at each individual node where the world engages in wars, competition, and oppression today. Wars would be fought in the info commons rather than being shrouded in the fog of ground ops.

The Future of Common Knowledge

 The future of common knowledge is the “commons”.  If every person, corporation, or institution were to index to a commons based data source, we could all observe each other while maintaining our privacy.  Economic scenarios could be run without expending money.  Disputes could be handled in the cloud.  The maintenance of the commons could become a new form of governance.

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Means and Methods of the Curiosumé DApp

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On January 23, 2015

In General Information

The Mechanics of the Curiosumé DApp are extremely simple. In fact, perhaps the greatest challenge of building the application will be to truncate the features of Curiosumé to the simplest functional form.

Means and Methods of the Curiosumé DApp

The only thing that Curiosumé is really supposed to accomplish is convert a résumé, CV, or project description from an analog form to a digital form so that the accounting, production, storage, and exchange of intangible assets can be machine enabled in a meaningful and valuable way. Centralized applications such as Facebook and Google perform this job quite effectively within their fortress for sale to 3rd parties, Curiosumé will do the same for decentralized applications between two parties only where value is retained by the creators and owners of the data.

An analog to digital converter for knowledge assets.

Curiosumé is a “writer” that is given away free to the Commons, open sourced, and decentralized. Ideally, an independent instance of the totality of Curiosumé could reside on every device. Applications that import Curiosumé data are called “readers”. Readers will be developed by entrepreneurs to accelerate any number of business models that are otherwise unviable in the current economic paradigm or simply under-performing due to the friction of the current economic model. Reader application may be for-profit giving the network an incentive to maintain Curiosumé. How an entrepreneur uses Curiosumé could be a trade secret rendering many patents obsolete.   These Reader Applications may include Decentralization schemes (DApps), P2P exchanges, and community cooperatives.

As such, the preferred interface between the reader and the writer will be likely be more suited to the MaidSafe protocol of secure P2P exchange of data. This would be similar to other intangible assets such as music, art, and literary works. It is easy to imagine a persona of one’s life story to be a real-time literary work – if not, then it should be.

Converting knowledge assets from analog to digital form:

Step one: User tags themselves with URL’s from Wikipedia articles that best represent intentions to interact with their community.

Step two: User self-selects their placement on a spectrum comprised of endpoints: student of that content, and teacher of that content (Note; midway across the spectrum corresponds to degrees of collaboration).

Step three: Curiosumé creates a digital persona in a specific form

Step four: Export persona to “reader” applications for analysis and processing.

This is the extent of the functional requirements of Curiosumé.

Operational Requirements:

The operational requirements of the application are somewhat more complex. The following six conditions must me secured by the Curiosumé application. If any of these 6 tenets are compromised, the mathematics behind the applications will fail and the intended outcomes will be suboptimal.

1. All public and private Wikis should reconcile upward to a top level Wikipedia entry

2, Rankings must span a non-competitive “student-collaborator-teacher” spectrum

3. Users must be allowed to self-select their placement on the spectrum.

4. The data format must be uniform as;

5. Persona must be indelible to anyone except the owner.

6. Interactions must be anonymous until the point of transaction

These 6 Tenets are unpacked a bit more below:

The Calculus of Curiosumé 

In this form, clean data may be easily normalized for statistical inference while remaining anonymous until an actual transaction of personal data may be negotiated on a P2P basis.  In essence, the criteria described here will produce extraordinarily useful data.

Rule 1: This rule secures a commons based knowledge inventory.  Much like air, water, and Earth, the knowledge assets in the commons are visible components from which useful things will be produced as regulated by supply and demand for the same components.

Rule 2: Students and teachers do not normally compete, rather, in the case of Curiosumé DApp, they represent “supply” and “demand” in a proto-economy. Collaborators represent factors of production in an economy where complementary knowledge can replicate a iterate – these are the engines that create value – this is the mining function.  These data will form a bell curve providing statistical inference to the commons where social value is mined in aggregate.

Rule 3:  The process of self-selection will be deeply personal to all participants and represents the individual mining of value for deposit in the new bank of intangible assets.  All this “mining” can be measured to form the basis of generalized reciprocity of social crypto-currencies.

Rule 4: The common format of of the Curiosumé output function will assure the ability to mix, match, exchange, discover, or test any scenario of social production imaginable.

Rule 5: Gives each person ownership of their data.

Rule 6: Not unlike Craigslist, anonymity until point of transaction is important for allowing people to view the public dataset and test their own participation to find opportunities for productive interaction.

Reader DApps:

When a match is made, a transaction can be negotiated.  However, this functionality is beyond the scope of the Curiosumé writer.  Instead, an innumerable amount of Readers will be developed by entrepreneurs to collect, form, and test scenarios negotiating the decentralized production of all useful things.

Innumerable use cases will create moderate generalized disruption across the current economic paradigm until a tipping point is reached where factors of production will flip from finite tangible to infinite intangible basis of account. Social priorities regarding what is invented and produced will be altered in favor of shared asset preservation rather than private asset consumption. Income equality, by design, will be normalized.  Collaboration will replace competition eliminating the need for over reaching controls and associated force.

 

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An Analog To Digital Converter For Knowledge Assets

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On January 21, 2015

In General Information

Curiosumé is an analog to digital converter for knowledge assets.

The single most destructive characteristic of the Market Capitalism is the dependence on resources extracted from the Earth to fuel constant economic growth. Natural resources are finite while constant growth model is infinite.  There are several ways to manage this disparity; the first is to expire Capitalism, the second is to base that dependence on an infinite resource. Given the shortcomings of most viable alternatives to Capitalism, the latter is likely more plausible than the former.

Many perils to society that manifest today have their beginnings in the thesis by Adam Smith called “The Wealth of Nations”. In this document Mr. Smith outlines the conditions of Capitalism where a merchant class would arise to efficiently allocate land, labor, and capital in various combinations in order to produce all of the useful things that society needs. The working class would hold the system in balance; too much growth would result in a shortage of labor that would constrain capital through higher wages (supply and demand). Government would be hardly necessary in a self-balancing system. Ironically, A great deal of innovation has arisen from the prospect of eliminating labor, which allowed growth to continue beyond the natural constraint.

Karl Marx identified the inevitable situation of constant struggle between the working class and the merchant class. One group strived for greater wages while the other strived to lower wages. From this struggle arose a spectrum of adjustments ranging from labor unions and calculated government regulations (Socialism) all the way to full State allocation of public resources (Communism). Herein lies the dawn of geopolitics and competing ideology.

It is fairly easy to see from this short history where hierarchy, competition, politics, exploitation, environmental crisis, and monetary corruption are intimately related. Today, these elements are enshrined in our culture in B-schools, sports, warfare, education, 2-party representation, etc. The result is that people are forced to compete with each other for jobs, money, food, water, air, education, civil liberties, etc.

But it does not have to be this way. A relatively simple modification to the existing paradigm can realign the economic incentives, and therefore social priorities, from consumption to preservation of our planet without necessarily triggering a collapse and subsequent reboot.

Consider the proverbial “basket of goods” – an economic standard used in a variety of analyses including Relative Price Index, Forex, Gross Domestic Product, etc.  The basket of goods consists of unit quantities of tangibles such as food, housing, energy, transportation, etc.  Now consider the human knowledge required to produce that same basket of goods. One can easily imagine economic standards articulated as either the tangible basket of goods or the intangible basket of goods. Both have the same outcome.

Yet, knowledge is an infinite resource that can underwrite so many more dimensions of human existence than a select basket of goods.  The problem is that there is no accounting system for intangibles as there is for tangibles. There is a reason for this – it is called control. Therefore, to create an accounting system for knowledge assets is to take control of productivity and the currency that represents it.  That is the evolution we ought to focus on.

This is a much simpler challenge than trying to solve every problem that our civilization faces individually. This is a much easier problem to solve than trying to change the minds of entrenched ideologies. This is a much easier problem than changing all the laws and institutions that exist to make the old game as fair as it can ever possibly be.  In fact, the solutions for our most complex problems as a civilization are stunningly simple to create.

Did I mention that Curiosumé is an analog to digital converter for knowledge assets?

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Is Curiosumé is a Bad Investment?

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On January 15, 2015

In General Information

Over the years we have identified several features of Curiosumé that every investor wants to change – but these are so fundamental to the operation of Curiosumé that to change them would make the application useless.

However, the follow-on applications could be so hugely profitable that we make the claim: “When hundreds of millions of entrepreneurs see the format of the data output from Curiosumé, they’ll know exactly what to do next”.  The hurdle is to build Curiosumé right while dodging the VC “gauntlet” of control.

Is Curiosumé a Bad Investment?

The following is a list of Curiosumé tenets that we hold critical to the development of the application and why each of these pass across the grain of traditional investment community to make the application difficult to fund:

A. The topmost ontology must belong to the Commons.  We specify Wikipedia, or other public databases for Curiosumé.  There will always be a strong tendency from investors to want to own the database or to define the ontology because there is a legacy ideal that this is where the value is. Private data, such as corporate wiki, can certainly be used to run Curiosumé, but MUST reconcile upward to the commons data base at higher order definitions. There will be a strong desire to own the ontology – we must resist this.

B. Non-competitive ranking system: This will be tough enough for the culture to accept – but we all must change ourselves at least as much as we expect others to change.  Our culture is steeped in tradition of competition; war, sports, even evolution (survival of the fittest), etc – all purport the necessity of competition. It was very difficult to find a suitable rating systems that did not invoke hierarchy and competition.  In reality, Nature exhibits many more examples of collaboration than competition, yet collaboration is not intuitive to the American psychology. We are not saying that competition is bad, it is just inefficient on a crowded planet because it manufactures more uncompensated losers than compensated winners.  There is always a strong tendency for investors to rank business components on a hierarchy – we must resist this.   There is a legitimate market for everyone.

C. Self-selecting: People must self-identify their participation in a community – a great deal of thinking, intention, and VALUE is created and deposited into the system through this extremely important process of self expression – this is where assurance is mined. The only way for it to work is to eliminate the incentive to cheat. The only way to eliminate the incentive to cheat is to eliminate the component of competition. If we eliminate the incentive to cheat then we can disaggregate hugely expensive vetting mechanisms that too often add crippling friction to a system.  There will be a strong desire by investors to rank other people in their own image and to sit on top of a hierarchy to control people – we must resist this.

D. “Learn-collaborate-teach” scale provides demand- production-supply metric. This is extremely important that the selection criteria provide these components that form factors of production for a proto-economy based on intangibles. Later we can design other non-competitive scales as they arise, likely as a smart contract application.  For now, there is so much baggage associated with competition in society that we should best stick with Learn-collaborate-teach scale for now.

E. Anonymity until the point of transaction: Big Data is valuable to the degree that it allows people to perform scenario testing with the community (commons) data. Anonymity allows for the benefits of big data to occur without any detriment of self-identifiable markers and associated moral hazards.  Like Craigslist – when two parties choose to interact with each other, they can then expose their identities in a P2P/block environment and communicate directly with each other equitably. There will always be a strong desire from investors to create a one-way communication channel (advertising, propaganda, control, etc) especially because Curiosumé data format will be near-perfect for targeted ads – we must resist this. However, advertisers can interact on a P2P basis with agents on a mutually agreed (economic) basis. This will be the interface to smart contracts.

F. Formation of the Asset: An asset can only be described as a [quantity] X {Quality} of /something/.  For example: . [100 gallons] X {potable} /water/ is an asset.  Likewise [2014] X {BMW} /SUV/ is an asset.  [2000 likes] X {Pepsi} /Facebook/ is an asset, etc.  Alone, “SUV”, “100 gallons”, “200 likes” are not assets and cannot be traded.  As such, from critical elements above, the ASSET must be defined as [A]X{B}/C/.

This is called a unit asset and represents a node in the network. A persona is then constructed from this node and its relatedness to the public database (wikipedia) Personas can be combined and all the nodes will remain attached and compared by degrees of separation. Degrees of separation will define relevance and VALUE. This formation must be indelible until the agent changes it – this makes it a good candidate for block articulation.

In summary, I have described at least 6 elements of Curiosumé that will always be rejected by traditional investors, yet are absolutely essential to the ability to set ourselves free from the oppression of market capitalism.  Is this a coincidence?

Is Curiosumé a Bad Investment?

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Decentralized Integration of Complex Systems

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On December 8, 2014

In General Information

The recent Panel at The Future of Money and Technology Summit on Fueling the Decentralization Movement ended on a very interesting point: The Integration of Complex Systems.

The last comments from Chris Peel suggested that the iPhone program was more complex than Apollo and that we are a far way off from the ability to decentralize production to the degree that a space program or revolutionary consumer product would require. From my years in aviation, I am keenly aware that the complexities associated with an aircraft program would be extremely difficult and risky to manage with a series of autonomous agents and smart contracts – as we know them today.

Wisdom of Crowds

However, the proposition made by Joel Dietz at Swarm is significant. Swarm proposes to crowd-select, crowd-vet, and crowd-fund start-ups. Several efficiencies are cited:

1. The crowd knows best what is needed in a specific time and domain,

2. The same crowd is also the first user/customer/advocates of the product, and

3. The same crowd is the first to iterate the project.

Such diverse and comprehensive “single source” domain expertise is unlikely to be available from any Venture Capital Firm.  Instead, far too many start-ups are designed specifically for the Venture Capital process effectively inbred with the centralized DNA.  The VC formula is fairly simple, well documented, and contains suitably developed infrastructure. The VC process efficiently removes promising innovations from a decentralized ecosystem, repackages them, and injects them into the 20th century finance model of banks, brokers, and IPOs.

Today, the decentralization movement is portrayed in the media by silos like AirBnB and Uber, who may eventually expand into other markets (such as Amazon did from books), but from a relative monopoly position of acquisitions, scale, and market dominance – which is the antithesis of decentralization.

Fueling The Decentralization Movement

This Panel at Future of Money was selected in a very different manner.  The idea that I was trying to get at is that an ecosystem is like scaffolding being populated with individual applications. At first they are sparse, but soon they expand to depend upon each other. At first, each of the panelists seemed very different and related only by ideology. As the session progressed, we could see the each of the panelists were filling in the gaps between themselves soon appearing like a full stack.

Paige Peterson suggested that Maidsafe’s ideas and technology would solve specific problems in the crypto-space that the blockchain could not. Christian Peel suggested that Swarm and Maidsafe may reduce scale risk with what Ethereum has to offer. Sam Yilmaz at DApps Fund is betting on cryptoequity and a broad spectrum of “work proofs” as a means of holding these DApps together rather than letting them become disassembled by a single minded Venture Capital process. Of course, our interest at The Ingenesist Project is precisely on decentralizing both supply AND demand as a means of articulating intangible assets to society (ref: Coengineers.com and Curiosumé).

What is Cryptoequity?

“Cryptoequity,” as defined by Swarm (from this Source) is an umbrella term that covers various applications of cryptographic ledger offerings.

These can include:

(1) Product presales in which the token serves as a coupon redeemable for a real world good (i.e. the Comic Book sale done via Swarm)

(2) Product sales in which the token is redeemable for some service in a decentralized network (i.e. Storj or Ethereum)

(3) Product sales which serve as a “subscription” or membership to some decentralized network (i.e. Swarm)

(4) Token which serves as a license to use some type of intellectual property, potentially with an attached legal contract (i.e. sales being conducted in the Swarm 5th of November launch)

(5) “Shares” serving as stock equivalent for organizations that have no legal entity (i.e. BitShares)

(6) Shares serving as stock for legal entities (i.e. Overstock/Medici)

Efficiency in Zero Marginal Cost

The relative benefit of many of these is that it solves an interesting problem related to the near zero marginal cost of software distribution; the fixed scarcity of a good or service allows the market to determine the appropriate price point for a product rather than centralized forced scarcity or management selection.

Decentralized Integration of Complex Systems

If we are to ever reach a point where complex systems (such as space travel or consumer products – or even equitable governance, environmental stewardship, and fair wealth distribution)  can ever be achieved in a decentralized manner, we must start with the integration of decentralized applications among themselves in a decentralized way.  We should not exclusively extract and seal critical components off from an ecosystem and run them through the VC gamut – the disruption goes both ways.

 

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Fueling The Decentralization Movement

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On December 5, 2014

In General Information

I recently moderated a panel at The Future of Money and Technology Summit in San Francisco on December 2, 2014.  When I put this panel together, my intention was to make the distinction more intuitive between an economy based in tangible assets and an economy based in intangible assets.   Whether they realized it or not, this particular group of panelists provided early  characteristics of a “full stack” new economic architecture as we described in this early 2009 series: Part 1, Part 2, Part 3, Part 4, Part 5, Part 6, Part 7

Here is the video of the conference panel.  Below that, are the questions that I had prepared for the group – most of which I did not need to ask.  This panel, in my opinion not only represents some of the most forward thinking people in the crypto-space but also the extremely important integration of applications that are arising in crypto-space.  That is the landmark condition that I am looking for, where applications integrate with each other.

Fueling The Decentralization Movement

 

Below is my prep sheet for the panel;

 

Dan: Welcome to Fueling The Decentralization Movement

 

How many people know what bitcoin is?

Are you familiar with decentralized applications beyond currency?

Would you know how to issue your own currency?

How many people are familiar with Ethereum?

Open: 1-2 minute introduction from each panelist

Q1; Sam. Please define Decentralized Applications (ref: whitepaper) and what you look for in an “investment grade” DApp.

Q2; Paige: Please expand definition of DApp to include non-block chain applications and discuss the off-BCP ways of accomplishing similar results.

Q3: Chris: Where does Ethereum fit in the DApps movement (now and in the next revision) that would facilitate DApp formation and integration.

Q4: Joel: Traditional VC are looking for 1000% on money. Banks lend at 10%, so obviously, there must be a whole lot happening between 10-1000%. What does that look like to you? How could we all release this potential.

Open: Suppose there is a spectrum where on one side, traditional bankers are the ledger holders and adjudicators conjure new money into existence. And on the other side, Bitcoin is a fully decentralized ledger and algorithm that brings new coins into existence. At some point, aren’t we trading one master for another or isn’t their some hybrid model that solves the problems of each? The goal it seems is to be judged as somewhat better than the banking system rather than somewhat less perfect than bitcoin. Do we have priorities s traight?

Open: What are people talking about in the Bitcoin Meetups and the Ethereum Meetups? What is the range of discussion and how viable are the ideas that people are bringing forward? What is the size and demographic of the meet up communities? What do they want to achieve? What are the resentments and where is the optimism?

Open; Nothing economic happens until two or more people get together to build something useful. Virtual goods are cool but something eventually has to touch the earth – to make something real. What can DApps do to bridge the virtual and the real? Stated in another way; when can I buy groceries with my altcoin?

Open: Bitcoin cryptographic “proof of work” creates a new coin and establishes order. The Fiat Banker’s “Proof of future productivity (debt)” also creates a new coin and established ownership. Assuming this to be a trust spectrum; how would “mining” be defined along this spectrum? Can adjudicated smart contracts serve as proof of work to mine coin into existence?

Open: Please describe differences between proof of work, proof of stake, proof of incentive, proof of resource, proof of performance and any number of proofs types. How interchangeable are they, what individual purposes do they serve? Can they combine to serve additional purposes?

Open: Do you believe that decentralization can reach a point where people become their own coin mined by themselves as they accumulate knowledge asset, collaboration, innovation capacity, i.e., representing their own productivity?

Open: What happens when the output of one DApp becomes the input to another forming a fault tolerant network or DApps? Ultimately this has to do with the convertibility of each other’s coins and ultimately convertibility with Fiat currency. What will these exchanges look like?

Open; I like to draw the distinction between classical economics and the New Value Movement. Classical economics posits merchant class allocation of land, labor, and capital for the ideal production of the things that society needs. The New Value movement is describing a decentralized allocation of social capital, creative capital, and intellectual capital for the ideal production of the things that society needs. Where are we on that spectrum and when do you believe that a big flip will happen between the two (if any)? Will it be gradual or sudden? What externalities are involved? Does one hedge the other? What are the possible worldwide implications of this?

 

 

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Future Of Money Part 2

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On November 27, 2014

In General Information

In 1801, Eli Whitney went before the US Congress with 10 working muskets. He proceeded to disassemble each of them, mix and scramble all the parts, then reassemble 10 muskets – all of them worked.  Prior to that day, most things were custom made by craftsmen using hand tools. Then, in a flash of geological time, the idea of interchangeable parts was released to the world – it would be impossible to put the idea back in its cage. Extraordinary levels of innovation followed as the industrial revolution was born.

In the murky world of crypto-currencies, the financial instruments of tomorrow may not necessarily be assembled like they are today. The new applications of decentralized currency are modeled more like “energy” flows rather than individual units of account. Energy exists in many forms such as electrical energy, chemical energy, thermodynamic energy, kinetic energy, nuclear energy, etc., but the objective is always the same, to move something in the physical world – to create change. The value of crypto-currency is proportional to the magnitude of change it can induce.

Future Of Money Part 2

A generalized theory is emerging to define and specify decentralized applications (DApps). This makes them easier to identify, measure, and replicate. If ignored, these innovations have the potential to be extremely disruptive to the insurance industry. If adapted, they can greatly increase the efficiency, variety, precision, and granularity for insurance products of tomorrow.

Not unlike the dawn of the industrial revolution, there is an extraordinary level of innovation in crypto-currencies since the inception of Bitcoin. The objective of these efforts is to move something in computational space such as flipping a switch, verifying a data set, securing identity, establishing order, establishing ownership, verifying capacity, etc.   This may seem somewhat obscure until you realize that these “energies” can convert and combine in immeasurable combinations to form autonomous logic circuits – i.e. complex contracts.

Since all businesses are based on contracts that act upon some physical space, it is only a matter of time before crypto-contracts jump to the physical space as well. As David Johnson, CEO of DApps Fund (a venture capital firm for decentralized innovation) says; “Everything that can be decentralized will be decentralized”. Eli Whitney was said to have uttered similar sentiments.

The early manifestations of this phenomenon are called Decentralized Application (DApps); these are little computational engines that operate autonomously and whose output is determined by an algorithm. The resulting decisions are binary and final. There are three characteristics that an application must have in order to be classified as a DApps. As you read these conditions, note how different they are from a traditional corporate structure.

  1. The application must be completely open-source, it must operate Autonomously, with no entity controlling the majority of its tokens, and its data and records of operation must be cryptographically stored in a public, decentralized block chain.
  2. The application must generate tokens according to a standard algorithm or set of criteria. These tokens must be necessary for the use of the application and any contribution from users should be rewarded by payment in the application’s tokens.
  3. The application may adapt its protocol in response to proposed improvements and market feedback but all changes must be decided by majority consensus of its users.

Next, there are three classes of Decentralized Applications that align loosely to a familiar computer analogy:

  • A Type I DApp is analogous to a computer operating system such as Windows or the Mac OS X, etc.
  • A Type II DApp is analogous to a general-purpose software program such as Word, Excel, or iPhoto.
  • A Type III DApp is analogous to a specialized software solution like a mail merge, or an expense macro, or a blogging platform.

As such, we can expect that there will be a fewest type I DApps, more type II DApps and even more type III DApps.

The more direct definition of these three classes is as follows: 

  • Type I decentralized applications has its own block chain. Bitcoin is the most famous example of a type I decentralized application but there are others. 
  • Type II decentralized applications use the block chain of a type I decentralized application. Type II decentralized applications are protocols and have tokens that are necessary for their function. 
  • Type III decentralized applications use the protocol of a type II decentralized application. For example: A hypothetical Cloud Protocol that uses a type II DApp to issue ‘cloudcoins’ that can be used to buy cloud computing services would be an example of a type III decentralized application.

Taken together we have most, if not all, of the familiar components of governance and interdependencies without the layers of management that are associated with traditional corporations. As you absorb the analogy and definitions, consider how DApps can be nested, combined, and integrated with other DApps to emulate complex contracts.

One particularly interesting DApp that recently launched is called Counterparty . Counterparty is a Type II DApp that performs one single task extremely well.

Counterparty is a betting platform; or we can put it politely and call it an escrow platform. Two parties may enter into an agreement about the outcome of a future event such as a horse race or football game. Each player puts his or her money into an escrow account that is sealed prior to the race. After the results are registered, the DApp autonomously transfers the money from the combined account to the winner.

Now imagine 500 bettors putting their money into the escrow account prior to the contract event. Upon completion of the event, the money is automatically assigned by algorithm to the winners in pre-assigned proportions. It does not take too much imagination to see this as an insurance product, except without agents, executives, managers, office towers or cute little geckos.

Soon, marathon runners can pool health insurance more towards sprains and falls, and less toward heart disease. Mini-van moms can pool auto insurance for number of passengers rather than miles driven. Professionals can pool E&O insurance by peer review. In fact, any affinity group can accurately price the perils that they are also most capable to manage.  DApps are massively scalable; one application can serve infinite users.

The market size of binary betting (sports, insurance, coin toss, etc.) combined with complex betting (contracts for difference, hedging, options, etc.) is in the trillions of dollars. So while Counterparty has only one use case, the use case is massive.  Now imagine 100,000 DApps operating autonomously, combining and integrating into complex relationships – not unlike building a jigsaw puzzle.

There was once a time when craftsmen guilds were the most powerful organization in the republic. Many of us remember the days when labor was increasingly replaced by machinery. The time may be arriving where machinery can also replace management. The insurance industry must become familiar with this environment and have the wherewithal to reorganize itself, before someone else does it for them.

***

Come Join us At The Future of Money and Technology Summit in San Francisco, December 2, 2014 for my panel discussion on Fueling the Decentralization Movement.

Speakers:

Paige Peterson – Maidsafe

Sam Onat Yilmaz – Dapps Fund

Joel Dietz – Swarm.co

Christian Peel – Ethereum

Moderator: Dan Robles, The Ingenesist Project

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Future Of Money – Not What You Think

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On November 23, 2014

In General Information

Never underestimate the ability of the human species to adapt to changes in its environment.

All humans are engineers. If there is too much friction in a system, they will fix it, or they will replace it. When banks add overdraft penalties, incur service fees, constrain capital, restrict mobility or compromise the public trust in any way, all those engineers will make a “correction.” Money, after all, is a social agreement.

Today, young people are encountering a financial game that they cannot win playing by the rules that are presented to them. The result should surprise no one – they will either not play the game, or they will change the rules. In fact, innovation in banking is happening at an astonishing rate; unfortunately, bankers are not necessarily doing it.

Because banking touches every part of our lives, so, too, will any innovation that occurs in the domain of banking.

Look at Bitcoin. It is more than just a cute new social app like Facebook or Twitter – it is a new idea called decentralization. If it is possible to decentralize banking, it would also be possible to decentralize everything; insurance, engineering, education, production (i.e., corporations), education, legislation and even governance. Nothing is immune from the next wave of Internet innovation that is bearing down — and right now, not tomorrow.

Because this is an insurance audience, allow me to mention that, the easiest (technically) and likely the first big innovation that will arise from the decentralization movement will be decentralization of insurance. With the advent of smart contract platforms such as Ethereum and Ripple Labs, people can form their own risk-sharing pools to cover a whole suite of perils now in the domain of insurance. (For the lawyers and politicians out there, it is also nearly trivial to set up voting, escrow, contract enforcement, etc., via the sort of block chain protocol that is the basis for Bitcoin.)

Last year, I published an article called “What if everyone was a BitCoin”? The core idea was that there are several problems with Bitcoin:

  • Concentration of wealth is worse than the dollar.
  • The proof of work that creates coin is trivial except for the fact that it is difficult.
  • The valuation was speculative.

Future Of Money – Not What You Think

Today, there are hundreds of companies forming, and being funded in the millions of dollars, that are investing in innovations that would create thousands, if not millions, of alt-coins with characteristics of Bitcoin, except iterated without the impracticalities of Bitcoin.

For example, MaidSafe was able to introduce a currency called Safecoin that provides a way to take unused computational capacity that members are willing to contribute and build a decentralized server network. This network encrypts data flowing through it, creating a secure and anonymous Internet. What happens to big data when people stop sharing the streams of information available on today’s Internet?

Further, innovations such as Curiosumé (by this author) could have wide-ranging implications on everything from education to corporate HR and factors of production – Curiosumé is an open-source development project designed to replace the resume as a means for describing one’s interests, skills and abilities; the tag line is, “Because the resume must die.”

Swarm.co allows individuals to invest time and money in decentralized innovations without banks, insurance, corporations, etc. A new generation of venture capitalists such as DApps Fund is already funding new startups in crypto-currencies and demonstrating high convertibility and liquidity.

Every month, thousands of people are coming together at Meet-up  (itself an earlier social innovation) to learn, teach and collaborate on open-source platforms such as Ethereum, Bitcoin, Ripple and many others. Every day, with each article warning of the dangers of Bitcoin, there is another article of an ex-CEO banker coming out strongly in favor of the financial innovation in the crypto space. What is certain is that every impression placed on the public regarding these new technologies is bad for the status quo for banking and insurance.

Resistance predictably comes from the public voice of banks and governments, which have the most invested in the way things are. This is not to say that they are bad and wrong, just that they have the greatest infrastructure in place to support the existing system. Changing their minds is like pushing electric cars against the tide of Big Oil; lines have been drawn in concrete.

What we are seeing is not a “revolution” with a central army in a field of battle; there is simply a natural progression happening fueled by rational efficiency and nothing else. But change is inevitable.

As with previous financial innovations, my guess is that some trader may discover that the true risk associated with a particular crypto-asset is less than what the risk-adjusted market valuation indicates it is. Then, a financial instrument will be developed to exploit the risk-arbitrage. Some readers may recall the saga of Michael Milken, who correctly observed that companies with low credit scores were in some cases less likely to fail than their risk valuations indicated. This led to the creation of junk bonds and, ultimately, the idea that risk valuations can be skirted. To Milken’s credit, the assumption held until greed set in (which is not the fault of the asset).

I believe something similar may or must happen in finance to spawn internal innovation. For example: the insurance industry does not necessarily care about risk per se; the industry cares mostly that the risk is priced correctly. Soon, the insurance industry may realize that the risk of assets backed in crypto-currencies is lessened because of increased liquidity, fewer restrictions and regulations and rapid convertibility and because they are underwritten by better fundamental assets than the dollar. The industry will develop financial instruments that exploit this risk arbitrage and profit considerably.

But if the insurance company does not innovate in this future form of value, then people will build their own instruments. These new ideas and the technologies will enables millions of entrepreneurs and billions of engineers to print their own money one social agreement at a time. My advice to the insurance industry is to get in, help out and adapt before your customers leave you behind.

(Editors note: You are invited to join the author at The Future of Money and Technology Summit in San Francisco, Dec. 2, 2014, for his panel: Everything that Can Be Decentralized Will Be Decentralized.

The description is:

Much of our society today is based on centralized organizations that allocate our land, labor and money to create the things that we need. Today, we have an opportunity to specify and design any number of decentralized applications that also can produce all the things that society needs — except with stunning efficiency. This is a conversation about what is not only possible but is becoming increasingly probable. This group of speakers represent innovations that decentralize: data, venture capital, productivity, currency, contracts and knowledge — and that’s just the beginning.

The speakers are:

Paige Peterson – Maidsafe

Sam Onat Yilmaz – DApps Fund

Joel Dietz – Swarm.co

Christian Peel – Ethereum

Moderator: Dan Robles, The Ingenesist Project)

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Proof of Work vs Proof of Performance

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On October 25, 2014

In General Information

Proof-of-work (PoW) is a cryptographic technique introduced to a transaction which solves problems of fairness or abuse.  For example, a PoW would require a computer program to solve a simple puzzle before it can pass an email from sender to a receiver.  Someone who sends spam emails would be burdened with an computational costs greater than the possible benefit of sending spam.  A legitimate email from a single sender to a small packet of recipients would pass easily.

Proof-of-performance (PoP) refers to a condition where two parties enter into an agreement and a third party judges whether the conditions of the agreement are met.  Like an escrow account, the buyer puts the money into an account and the seller puts the title into an account.  If the conditions of the contract are met, a judge (adjudicator) flips the switch that completes the transfer.  If conditions are not met, the switch returns the money to the buyer and the title to the seller.

Proof of Work vs Proof of Performance

PoW and PoP are substantially different in many important ways.  For example, for POW the adjudicator is a computer program.  For PoP, the adjudicator is a person.  Ideally, the PoW is perfectly unbiased and cannot be corrupted for personal gain.  The PoP however, resembles the business model of most Brokers who can be biased, if not corruptible for individual gain.  Herein lies the promise of crypto currencies and so-called smart contracts that can be executed by computational algorithm rather than untrusted human agents.

On the other hand, PoW and PoP are conceptually similar is some ways as well.  In the Bitcoin protocol, for example, completing a PoW results in the issuance of a new coin.  Similarly PoP adjudicator is payed a fee or commission for validating the conditions of a contract.  The mother of all PoPs happens in the Banking System which literally issues new dollars into existence in the form of debt as a consequence of an adjudicated contract between a buyer and seller.

While the puzzles and context may differ, the consequence is the same – money is conjured into existence as a result of a humanly intensional transaction.  There really is nothing, except perhaps the deep training of an oppressed population, that says that a decentralized POP adjudicated by qualified and unbiased persona (disaggregated from the transaction) could not also result in the creation of new money.  This is exactly what Curiosumé proposes can be accomplished.

In the prior post; The Conjuring of Intangible Values,  The tangible value of a bridge connecting two cities and the intangible value of that same bridge are vastly different quantities.  Likewise, the tangible value of Bitcoin and the intangible value of Bitcoin are also vastly different different values for the same reason as the bridge between two cities.  If PoW = PoP could be assimilated in a single currency, we could build an economy whose currency is underwritten by the intangible value of infrastructure.

Ultimately, our planet would be the apex of infrastructure preservation, i.e., Humanity’s New Central Bank.

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The Conjuring of Intangible Values

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On October 22, 2014

In General Information

My prior post “The Tale of Two Cities” demonstrates that the intangible social value conjured into existence by the bridge that connects two fair cities far exceeds the ‘tangible’ value of that bridge.  Yet, only the tangible value of the bridge is accounted for on a balance sheet such as GDP.

The Conjuring of Intangible Values

This may seem trivial until you observe that people are paid for their intangible assets (knowledge, creativity, and engineering calculations) as a percentage of the far lower number while the bankers, government, and corporate interests compensate themselves as a percentage of the far higher number.  The difference appears to be unaccounted for.

The Tail of Two Cities article concludes that the value that is conjured into existence by both the bridge and the fractional reserve system must be equal, by definition; otherwise the metaphorical breezeway that connects the two worlds would fall.

Bitcoin suffers from a similar curse as The Tail of Two Cities.  The prevailing argument against the crypto-currency is that it has no intrinsic value.  I have personally argued that a currency must represent human productivity intrinsically or else no other human would be willing to work (be productive) in exchange for it.  An article by Paul Bohm “The Value Of Bitcoin is Decentralization” makes a good point that the intrinsic value of Bitcoin is based on the value conjured into existence by increased productivity to society by what can be accomplished with Bitcoin that otherwise would be impossible without Bitcoin.

So if the valuation of a bridge crossing the river and the valuation of Bitcoin crossing the broker both suffer the same curse that there is no accounting system for intangibles, wouldn’t it make sense to solve that problem first  – i.e., measure into existence the intangible value of the Ingenesist – and then release those millions of human intentions (bridges and Crypto-currencies, not withstanding), into the system of trade?  This is the problem that Curiosumé proposes to resolve.

I believe that we first need to solve the under-mining problem that there is no accounting system for intangible assets.  Only then can there be intrinsic value in the conservation of those assets

… then maybe none of this would seem so mysterious.

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A Tale of Two Cities

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On October 15, 2014

In General Information

Suppose two cities are separated by a river. Every day 100 people pile into a boat for the 1 hour journey to the other side two times per day. Crossing the river costs 200 person-hours per day. Then civil society decides to spend 1 million dollars to build a bridge to carry 10,000 people across the river every day in negligible travel time = 10,000 person-hours of productivity are added and redistributed to the communities every single day.

These people go on their merry way expressing themselves as intangible assets to create art, raise families, and transfer new ideas to enterprise according to classical Schumpeterian design.  They are doctors, nurses, and engineers.  They are teachers and students, collaborators and Capitalists.

If the bridge has a service life of 50 years, it will conjure into existence 178 million hours of human productivity. If the average income is 25 dollars per hour, a simple $1M bridge is amplified to a stunning 4.5 Billion “dollars” worth of productive community value. This value never appears on any accounting statement because market capitalism measures value into existence at the tail end, not at the palette. The economy is measured as the stuff that intangible entities (people) are told to produce, not what they actually want to produce.

This 4.5 Billion dollars is uncounted value that is expressed in fiat currency which, through the miracles of the fractional reserve, corporations, and a litany of exotic financial instruments also amplifies 1 million dollars of Real Value into billions of dollars of paper value.  In fact, the ONLY reason that the tangible financial system does not yet collapse is that it is being propped up by this “invisible” intangible asset value that never appears on any accounting statement.

Many new money theorists claim that 70 Trillion dollars in debt can never be paid back because the “interest” on that debt does not exist.  I believe it does exist, it must exist otherwise the system would collapse.  The real problem is that the debt exists in a form of uncounted currency.  All we need to do is measure intangible value into existence and trade it directly as a financial instrument – nothing will change and everything will change.

From Charles Dickens’ A Tale of Two Cities :

“It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of Light, it was the season of Darkness, it was the spring of hope, it was the winter of despair, we had everything before us, we had nothing before us, we were all going direct to Heaven, we were all going direct the other way – in short, the period was so far like the present period, that some of its noisiest authorities insisted on its being received, for good or for evil, in the superlative degree of comparison only.”

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Introduction To Curiosumé

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On September 13, 2014

In General Information

(Editors note:  We are publishing the documentation and tutorial for the Curiosumé application for review and comment)

Introduction To Curiosumé

Curiosumé is an open source specification for the analog-to-digital conversion of knowledge asset objects.  Designed as a system to replace the résumé as a means for describing the interests, skills, and abilities of people, things, and ideas —  it functions as a personal digital API for the trade and exchange of actionable knowledge.

Since semantic knowledge assets are machine-readable, they generate matches, proximity measurements, relevance and importance rankings, and predicted probabilities of various outcomes.  As such, the economics of “intangibles” becomes computable and meaningful.

By activating knowledge assets within an economic system, social entrepreneurs may readily trade and exchange intangible assets much as they do with tangible assets.   Curiosumé facilitates trade of intangibles through a unique distributed network of objects and assigned attributes.

  • Ownership of one’s Personal API
  • Anonymity until point of transaction
  • Deploying multiple personas
  • Combining multiple personae
  • Imaginary personae
  • Measuring proxies for economic output, matching, assessing, scenario testing
  • Anonymity and privacy

Use Cases:

The use cases for Curiosumé will be a numerous as the number of entrepreneurs who can articulate the protocol in a market.  Since Curiosumé eliminates “Competition” from the onset,  there is little or no economic incentive to lie, deceive, or cheat.  This allows the market an opportunity to defer vetting mechanisms to downstream applications that can compare (for example) a submitted persona against a control personal as a cryptographic key to unlock a transaction or block chain, etc.  In essence, making cheating too expensive to sustain.

  • Individuals may overlay their own persona on any dataset to visualize and discover adjacencies, paths, and connections.
  • Individuals may interact with the web using a Personal API
  • Protegé and Mentors may find each other in close proximity in community or within an organization.
  • People with special skills can find worthy and productive collaborations in communities or within the organization.
  • Trade in knowledge assets is facilitated through “anonymous until point of transaction” protocol.  People will provide better data knowing that they have complete control over their personal identities.
  • Build Social Currency; multiple personas may combine Curiosumés to establish the knowledge inventory for a team or to discover the probability that a group of friends may produce any mutual affinity efficiently together.
  • Any product or service may be described in Curiosumé format and compared to a community listing to discover customers, partners, and employees.
  • Curiosume data is pre-normalized allowing any user to make predictive assessments about any collection of personas relative to a project, product, event, itinerary,  or interaction with any physical asset.
  • Cryptographic; a personal API may be used as a private key in unlocking smart contracts on the block chain protocol
  • Toll Booth on Big Data; marketers, employers, or data aggregators would pay individuals for access to their persona.
  • Instead of advertising to a demographic, marketers may identify specific knowledge assets and may offset prices based on the social values or proclivities of the persona.
  • Economic development agencies can take a knowledge asset survey of a region to identify what institutions or industries they have a strategic advantage.  Or, they may retrain or import specific knowledge assets in order to grow into new industries – with great precision.
  • Philanthropic  institutions can assess need and impact prior to committing to directed giving by assembling strategic knowledge assets around a specific philanthropic goal.
  • Corporations may assess their ability to enter a develop a new products or enter a new market based on a Curiosumé survey
  • Competitors may assess the ability, and cost to defend against their competition disrupting a new product initiative.
  • Corporations can better tailor their products to what customers actually want to buy rather than trying to “market” what the company already knows how to produce.
  • Corporations can make hiring vs training decisions with better clarity based on a Curiosumé survey.
  • The college “degree” system may evolve in favor of boutique personas designed for innovation in an industry.
  • The financial industry (from the NYSE, Banks to VC) can determine the probability that a company may be able to execute a business plan given their Curiosumé survey
  • The Insurance industry can mitigate risk exposures by assuring that the right collection of knowledge assets are deployed to, say, a construction project.
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Time to Kill Social Media

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On September 9, 2014

In General Information

Social Media is dying and it needs to be put out of its misery ASAP.  I have been in the social media space for many years and while much has happened, much has been lost.

There was a dream we all had in the earlier days that ‘user-generated content’ would evolve to ‘user-generated productivity’ and social priorities would change. The funny thing about economics is that nothing economic can happen until two or more people physically get together in time and space and make something valuable for each other.

I have seen this over and over in my own businesses. The Ingenesist Project (TIP) has global reach, high the engagement of important people, and a fair amount of notoriety – but after nearly 10 years, 500 blog posts, 60 videos and dozens of conference appearances, TIP has not generated a single penny of revenue.  But I’ve met hundreds of wonderful people many who have become close friends.

On the other hand, Coengineers is only a few years on and gets twice as many website views, we’ve toppled shady contractors, and publish an extensive catalog of engineering means and methods, and saved many shared asset communities from financial peril. But it is not until I physically walk into society and ask people face to face and ask “How can we help you?” that Coengineers generates revenue…. and, then we do generate revenue.  And I’ve met hundreds of people many of whom have become close friends.

Linkedin is worthless. Facebook is criminal. Google is downright creepy.

Again, nothing economic happens until two or more people get together in physical space and time to make something useful for each other. Yes, I know that software can be produced oceans apart, but what is that software about? It is always about something that happens in the physical space. It MUST eventually touch the ground somewhere in order to have an economic outcome to convert back downstream.  Big Data wants those relationships, they want them badly, they think that they should own them.  That is where the value is and Big Data wants to scale it.

ROI Rage

Nobody has ever been able to produce a reliable ROI on social media. It’s easy to get people to talk about something, but it is difficult to get people to buy something. Enter Big Data. According to Josh Sinell, VP at Merkle, “It’s [now] about determining what data we need to make something measurable and valuable happen, and then using that data to craft a strong offer, and delivering that offer when and where that customer is most ready to receive and act on it”.

The implications of this statement are horrific (“Shock and Awe” comes to mind). But we can also look at it as a business opportunity – marketers are willing to pay dearly for clean data from anyone who can harness it. So what if we the people could harness our own data and place a big yellow tollbooth on the Big Data Superhighway?

Turning out the lights 

Curiosumé creates a public key inventory of all the things that people need. Then you create your decentralized private key representing your relationships, which you control. By looking at either key, some global data may be attainable; mostly the the stuff that serves society in general. However, your personal data is encrypted until you – and only you – combine your private key with the public key, then the secrets within are revealed.   This would effectively shut the lights out on Big Data. If they want to see your data, they will need to pay you directly for it.

The famous prophet Mitt Romney once proclaimed, “Corporations are people, my friend” But little do many of us realize that people are corporations too. So go ahead, kill Social Media.  Society may simply reorganize into something else, the sooner the better in my opinion.

 

 

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The New Definition Of Social Capitalism

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On July 22, 2014

In General Information

About 3 months ago, I received a cryptic email from what sounded like a war-weary Wikipedia Editor pinned down in the trenches by enemy cross-fire.  His message was stark;  Wikipedia will delete “Social Capitalism”, you are in the best position to save it”.

Since the dawn of Social Media, many people in the Social Capital domain, including myself, had been contributing references, material, ideas, and theoretical constructs to the doomed Wikipedia article in naive optimism that Social Capitalism may indeed be a new form of social organization.  So, upon receiving the desperate plea from the front lines of Wikipedia D-day, I jumped in and submitted argument after argument to an already formidable defense deploring the powerful Wikipedia Editors to preserve the article, the idea, the possibility…

But alas, we failed.  Perhaps we did not have proper academic credentials. Maybe we were not widely cited by important people. Our oppressors eventually provided a weak explanation related to social systems and economics, etc., but in retrospect, I think the real problem was that we were trying to define something that did not yet exist despite nearly 30 million Google search returns.

I have to admit that I agree with the Wikipedia editors. In reviewing that experience recently, I turned to the definition for “Capitalism (disambiguation)” in Wikipedia:

Wikipedia defines Capitalism as an “economic and social system in which the means of production are privately controlled”. 

Factors of Production (from classical economics) are presumed to be something like “land, labor, and capital”.  Now, consider that modern day factors of production are increasingly cited as: “Social Capital, Intellectual Capital, and Creative Capital” of people and their relationships.  After all, these are the assets that are deployed in order to produce the proverbial “basket of goods” upon which most global currencies are compared.  

This is not trivial. Since these modern factors of production exist between the ears of each individual person, they are, by definition “privately controlled” and readily exchanged for economic outcomes among people in social networks.

If the US Supreme Court agrees that corporations are people, then it is equally valid that people are corporations too. Taken together:

Social Capitalism refers to the economic and social system in which the means of production are social, creative, and intellectual assets.  

However, (and a big however), in order for Social Capitalism to become the dominant form of social organization, quite literally, society must reorganize itself to account for exchange and trade of intangibles. Then, all the decentralized innovations that we call the “Social Capital Domain” can integrate, unify, and dominate. Everything will change.

SEE: Reorganizing For The Era Of Social Capitalism

Perhaps then we’ll finally have a Wikipedia article for Social Capitalism like those clear, present, and magnificently organized warriors behind such economic facts as  Corporate Personhood.

 

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Reorganizing In The Era Of Social Capitalism

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On July 8, 2014

In General Information

apitalism is evolving. Society needs to reorganize itself to trade “abundant intangibles instead of scarce tangibles”.  Then, all the decentralized innovations currently coming online can truly integrate.….and, everything will change.

Reorganizing In The Era Of Social Capitalism:

This 16 minute video describes a method for intangible assets to be made tangible in an accounting system for the purpose of storage, exchange, and creation of new value in communities.

The next step is to create a series of similar videos specifically tailored to each major industry in our economy specifying how Curiosumé would benefit them. That is described in the following document:

Video Proposal

We also seek to reach the community of entrepreneurs who will build the next generation of data visualization tools that will facilitate matching algorithms for communities.

Finally, we will introduce The Value Game and the WIKiD Tools Algorithm with which we may form a new cryptographic currency backed by abundant intangibles rather than scarce disposable tangible assets.

 That is Reorganizing In The Era Of Social Capitalism

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The Mother of All Hedge Funds

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On May 9, 2014

In General Information

Money is supposed to represent human productivity; otherwise nobody would work for it (think about that for a second).

Today, money is created from future productivity in the form of debt;  when you take a loan, money is created out of thin air and posted as an asset on the banks ledger.  Unfortunately, the money required to pay interest is never created at all, which drives eternal scarcity.

What Happens Next:

Through the miracles of the fractional reserve system and high finance; money gets thrown into a blender where it is then divorced from the productivity of those who create it, and is converted to exotic financial instruments that bet for or against the future productivity of the future productivity of the future productivity, etc – in both Calculus and Finance, these are called derivatives.

Why does it still work?

So the question becomes; if money does not represent productivity, then why do people still work for it? Well, there is no other alternative to money as we know it.

Then came … and went … Bitcoin;

Bitcoin is all the rage because it behaved sort of like a currency – it had many of the desirable characteristics for the storage, exchange, and unit of account for value. But something about it didn’t sit right with society in general – most people aren’t willing to work in exchange for it.

Bitcoin has 3 fatal flaws:

  1. Bitcoin does not represent human productivity.
  2. The total available Bitcoins were highly concentrated among a very few people.
  3. Bitcoin are speculative in value.

Many words have been committed to these topics so I’ll leave a deeper understanding to the reader to research on their own.  However, we can now ask the question;

What if a virtual currency could be designed that does represent human productivity, is widely distributed among the users, and empowered by those who interact with it?

 

Consider an Engineering Backed Currency:

Let’s consider an engineering backed currency and the existing institution of the National Society of Professional Engineers (NSPE)

 Condition 1: Engineering works increase human productivity in the form of roads, bridges, machinery, energy, clean water, sanitation, and generalized problem solving.  A currency backed by engineering would invariably be backed by human productivity thereby satisfying condition #1.

Condition 2:  Suppose that upon paying their 300 dollar dues to the National Society of Professional Engineers, the NSPE Knowledge Bank issues 3000 NSPE Bucks, a virtual currency, to the member so that any member can trade with any other member for the purposes of learning, teaching, and collaboration (don’t worry yet about the technical challenges of doing this).

If any member gets stuck on a project, or they need to understand new technologies, or are looking for complementary knowledge, they can compensate another engineer in the NSPE Technical Network using NSPE Bucks.  Young engineers can teach seniors about new tech, social media, hot mobile apps, and seniors can teach young engineers about nuances of engineering practice, etc., all in exchange for NSPE-Bucks.  NSPE bucks will become evenly distributed thereby satisfying condition #2.

 Condition 3: The NSPE Bucks act as a form of insurance.  If an engineer gets stuck on a project or needs a review of their work or intersects another discipline, they can get rapid and effective support across a vast network of knowledge assets in the profession.  An engineer may be empowered to interact with their peers and innovate in their careers knowing that the wisdom and experience of their peers is mutually accessible.  As such, condition number 3 is met.

Hold on to your seat – this last point will blow you away:

Innovation is the domain of engineering – the two words are synonymous.  People innovate today for the purpose of increasing productivity in the future.  Remember, debt is also a currency backed by future productivity.  Therefore, when you have two currencies that are backed by the EXACT same underlying asset, they are fully convertible on an open exchange.  So NSPE bucks can be easily converted back to dollars or simply traded broadly in a market.

The Mother of All Hedge Funds

As the dollar weakens in scarcity, the NSPE Buck will strengthen in abundance, value will be preserved in the works of engineering that are created. In fact, an engineering backed currency would hedge the dollar as it weaken in it’s ability to maintain infrastructure, build schools, solve climate problems, and provide for the safety health and welfare of people and property.

There is no shortage of work to do and there is no shortage of innovation – there is only a shortage of money.  If Banks can print money out of thin air, why can’t engineers?

 

 

 

 

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Shutting OFF The Lights On Big Data

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On May 2, 2014

In General Information

Big Data, Bigger Data, Not Neutrality, Mega-Mergers, Election Deform – BIG (fill in the blank)  spells BIG trouble for LITTLE (rest of us).  We don’t stand a chance against the tsunami of surveillance that is barreling our way.  Big Data is becoming it’s own feedback loop and, like shoving a microphone into a stack of tweeters, the noise is deafening.

Nature tells us many things about how an organism responds to externalities.  For example, when a stand of trees encounters an insect infestation, they work in symbiosis with fungi and micro-organisms to amazingly communicate signals across distance and across species to develop compounds to arrest the attack.  Nature collaborates in magnificent ways with often astonishing results – survival of the collaborators.

The entire human organism is in this position today, we cannot attack our own do-loop without also attacking ourselves.  We must adapt a new one.   We must address the perils ahead by organizing ourselves in a radically different manner.  When threatened by inundation, we must also become fluid, mix with the tide, and change its composition from within.

The following presentation was delivered at Seattle University in April 2014.  This presentation demonstrates why – and most importantly –  how we need to re-visualize society, especially our own place in it.  We need to reorganize ourselves as a species to face these powerful new forces that ultimately threaten to smother the knowledge, creativity, and wisdom from our one and only planet.

Our objective with this video is to communicate to all other New Value Movement applications that there is a new form of organization that we can all adapt in order to integrate ourselves in collaboration outside of BIG Data.

Only 20 minutes – be prepared for a mind bender!

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What EVERY Engineer Must Know About Bitcoin

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On April 24, 2014

In General Information

A bitcoin (lowercase b), as a currency, has several flaws that will continue to limit its ability to replace money as we know it.  There are millions of words published on the subject, so I’ll leave it to the reader to assess arguments on both sides.  However, Bitcoin (upper case B) as a “protocol” for the transfer of value is an extremely important innovation that engineers must not ignore.  

The opportunities for the profession are sweeping and vast, but only if they take action and build this ecosystem their selves – it is so powerful, that others will gladly do it for them.   I will try to explain this opportunity in this short 1125 word article, but please feel free to contact me with in-depth questions.

The Block Chain Protocol

The Bitcoin protocol is a brilliant innovation that cannot be un-invented – it is here to stay and it will appear in many forms long after it sheds the “bitcoin” moniker.   Formally called the Block Chain protocol,  Bitcoin was designed to solve an age old problem of double spending a currency, specifically, a virtual currency.   A currency created on a computer can be easily copied by a computer and thus negates the real productivity that a currency is supposed to represent.   The same is still true for money – paper currency is becoming increasingly complex so that it cannot be easily copied, etc.

Today, there are vast institutions from banks, corporations, a legal system, prison system, and unfathomable volumes of legislation (all imposing respective brokerage fees) acting on the behalf of sanctifying the dollar.  However, volatility in these very institutions is what threatens the value of the dollar and all currencies upon which the World depends for very basic needs.  How well is this working, really?

So, What’s the big deal?

The stakes are high.  To invent a new secure and resilient means to rapidly transmit value can in one fell swoop eliminate the friction of the massive institutions on our economy, while also decreasing the volatility and economic friction imposed on society.   This is the reason behind the media hype, congressional hearings, declarations of nations, billionaire press conferences, etc.  They are all scared to death of the disruptive potential of this little beast.  Unfortunately, bitcoin has fallen victim to many of the same deficiencies that it proposes to correct.  But these will likely be corrected in the next iterations.   

The Train Leaves The Station

The backbone of the Bitcoin protocol is called the Block Chain.  There are now hundreds if not thousands of Block Chains in existence independent of Bitcoin.  Consider the Block Chain like going down to the train station.  At some predetermined time, a train arrives and the doors open.  Everyone piles into the train and after a predetermined amount of time, the doors close.  The corollary is that the doors cannot be opened for a predetermined amount of time and no changes, copies, or corruption can take place within that time stamp, no matter what.  Only when the train reaches the next location, the doors will open. Once the doors close for a second time, they never open again and a new block is formed.  Also, there is no way to retract this process, except by repeating it forward in a reverse transaction.     

The protocol has a few more features that I’ll leave to the reader to research including a public ledger where all transactions are open for everyone to see; and the train gets infinitely long with each new opening.  The transactions are opened and sealed cryptograpically and incentives are in place that compensates exchanges (the station masters) and well as those who solve a cryptographic puzzle that creates and maintains the integrity of the public ledger (miners).  

Smart Contracts

Everyone knows that money and contracts are intimately related.  In fact, money is a contract.  A contract is defined as a meeting of the minds.  As such, where the Block Chain protocol can efficiently transmit “currency”, so too can it transmit contracts.  In fact, it is so effective for articulating contracts that it’s potential to do so far eclipses its ability to replace the existing fiat currencies.  But again, money and contracts are so closely related that even this becomes a grey area – both can exist within the Block Chain.  This is hugely significant.     

So what’s in it for the Engineering profession? 

There is a special type of contract that engineering societies such as the NSPE, ASME, IEEE, etc., should have a laser focus.  These are called Oracle Contracts; also known as adjudicated contracts, (except subject to scientific judgement rather than necessarily a judgement of law).  For example, a client would retain a contractor to build a structure or machinery.  They would deposit funds into an escrow account managed by “smart contract” in a block chain.  This means that the computer will flip the switches instead of an accountant, banker, or attorney.  At certain points in contract and “oracle” – a third party vetting mechanism – will verify that the conditions or performance of the agreement have been met, then they would flip a switch that releases the funds to the contractor or back to the client (or through a predetermined decision tree), depending on objective observation.  

It’s All About Efficiency

This is efficient for the contractor because they don’t have to worry about getting paid as long as they meet the conditions of the contract. The client does not need to worry about getting ripped off because they are assured that the conditions of their agreement will be met.  The system is efficient because high integrity is rewarded and there is little incentive to cheat which minimizes lawyers,  accountants, social dysfunction, and all manners of corruption in a public ledger that provides extraordinary analytics available for societal learning in the public domain. 

For the vast majority of projects, products, or policies in the United States and the world, a licensed professional engineer and related scientific bodies are the ONLY qualified Oracles that can be deployed to vet an astonishing variety of Smart Contracts.

Smart Contracts can be written for almost any transaction, but it is inherently an intangible transaction since a “meeting of the minds” is the true nature of the value that they articulate.  The implications of an abundant intangible economy vs. a scarce tangible economy are vast.  Silicon Valley is pumping millions of dollars into virtual currency start-ups like Ripple Labs while companies such as Ethereum  promise to make smart contracts on public ledger block chains as easy to build as dragging and dropping puzzle pieces into a web page.  This is here today – it is not a theory.

Banks, insurance companies, and attorneys will be the first to adopt smart contracts because they stand the most to lose by not doing so.  Meanwhile, engineers in the US and indeed the World are relegated to the contractor sweatshops or smothered under the weight of towering hierarchies. Tragedies such as the Oso landslide and global warming remind us of the absence of engineering oracles advocating for society and our planet.  It is imperative, now, that engineers embrace Block Chain Protocol Technologies and the deployment of Smart Contracts to elevate the profession to the top of the proverbial food chain before there someone else does it for them.       

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Operation Cosmic Dawn

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On April 8, 2014

In General Information

Constellations Of Knowledge Assets:

The inspiration for this post comes from the April 2014 issue of National Geographic Magazine and the story of Cosmic Dawn; The Atacama Large Millimeter Array (ALMA).  ALMA is a constellation of dozens of separate telescopes working together to cancel cosmic noise so that a clear and focused vision of the deepest darkness of space can emerge.   The clinical term is: Astronomical Interferometer Radio Telescope.  

The analogy to the emergent world of cryptography, alternate currencies, intangible asset valuation, and predictive innovation may not be clear at first glance, even to me.  However, I suspect that the lack of clarity may lie in with insurmountable noise surrounding these new social innovations.  It is simply impossible to see a clear path toward how all the pieces are supposed to fit together.  As a result, the solution to the human condition continues to evade humanity.

Maybe we are going about things incorrectly; instead of creating more noise, we should find ways to cancel out any specific frequency of noise at any given time. Even better, we should be able to “move the sliders” around to focus on a particular signal and separate the noise that surrounds it.

As the open source community continues to develop Curiosumé, we are faced with structural challenges related to how we would induce a completely decentralized community.  For example, Curiosumé could not exist on our servers because that would be too centralized; merely duplicating the function of corporations and government.  On the other hand, Curiosumé cannot simply exist on everyones mobile device, because the noise would amplify rather than be reduced.  Further, computational responsibilities for creating matches and visualizations of the data would be impossible; much like the current state.

There needs to be a way to cancel out the noise in the past in order to see the future.  Isn’t that what astronomic telescopes do?  They look into the past to seek clarity of the future.

We are trying to deploy Curiosumé as a WordPress Plug-in of sorts. As such, any WordPress site can become an aggregator of knowledge assets relative to the context of that site and its relative position to other “antennae”.

Each site would pass or filter curiosumé objects for itself, and for others interacting with it.  The resulting combination of sites would measure into existence a vision of a variety of past position, the corresponding dynamic present, and accelerative future of a community.

Therefore; we announce Operation Cosmic Dawn to help build this community knowledge array.  We are seeking developers from all over the world to add to this open source project.  The incentive for the global developer is to become an Aggregator Galaxy in the Constellation of Knowledge Assets.  In other words, you’ll be building your own Ark. 

 Images courtesy of National Geographic Magazine and Wikipedia.  Please buy the April 14 edition and read up on this amazing telescope project

 

 

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Community Organization On The Block Chain

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On January 2, 2014

In General Information

The potential for articulating smart contracts between local business entities using the Block Chain Protocol (BCP) is truly staggering. While the BCP may not be ready for general population and would be largely unnecessary within a corporation, certain contract types and certain business structures may offer an excellent environment for widespread development. 

Cooperative businesses (Co-ops) may be the “more able” organization structure to introduce smart contracts because of specialized governance that allows for the pre-sale of goods and services for the purpose of general financing.  The pre-sale agreement may take the form of products, services, cash, or shares of future production.  For the purpose of this discussion, let’s consider “shares” as a community commercial currency between co-ops.

Community Currency

The objective would be to circulate shares between co-ops as widespread and comprehensively as possible only converting back to dollars when necessary.  The incentive would be that shares, in many cases, may be exchanged tax-free as long as certain conditions are met.  Further, by eliminating transaction costs, speed and efficiency may be achieved without banks or double entry account reconciliation, until necessary for interacting with the end user.     

Most people are familiar with Electronic Data Interchange (EDI) contracts from observing services such as Amazon.com, WalMart, or Zappos.com.  Electronic Data Exchange can be formally defined as the transfer of structured data, by agreed message standards, from one computer system to another without human intervention. Companies have used EDI since the mid-1990s to execute orders, renew inventory, warehousing, tracking, and even merchant banking.  The EDI acts primarily within the structure of the corporation and their contracted suppliers. 

The trick now, would be to use EDI protocols outside the construct of the corporation. The Block Chain protocol provides an important set of tools, which may allow organizations to interact with each other in a secure form of EDI that can be articulated among a community of integrated cooperatives. 

The 3 Building Blocks of Smart Contracts

There are 3 basic types of contract protocols that may be deployed through the Block Chain; these form the basis of smart contracts:

  1.  “Self-enforcing” protocol, which is like an electronic P2P handshake agreement that is fully activated between two parties.
  2.  “Mediated” contract that would include a third part intermediary such as an escrow or an oracle that would verify compliance with the agreement and pass the transaction between parties (or not).
  3. “Adjudicated contract” which places the oracle either in front of or behind the electronic handshake to filter or check transactions based on certain conditions.

An example given by Nick Szabo (reference article) would be that of, say, keys to an automobile where the owner could selectively allow access to family members but exclude other third parties.  There would be a backdoor to let in a creditor that is algorithmically switched on upon non-payment during a specific time (for repossession), or permanently switched off after the final payment is cleared.

The 3 Fundamental Particles of Cryptography:

Cryptographic keys that act in a variety of ways may activate each of these smart contract protocols.

  1. “Secret key” encryption, which is loosely analogous to common passwords that most people use.
  2. “Public key” encryption device acts like a one-way trap door that moves an agreement in only one direction.
  3. “— bit key generators” create keys that unlock transactions after a task is completed.

Controls: 

In order to duplicate the controls that large corporations hold over EDI processes, smart contract protocols should be structured in such a way as to make agreements:

  1. Robust against naive vandalism such as accounting errors,
  2. Robust against sophisticated, rational attack such as intentional fraud.

Cooperatives are quite adept at deciding how “shares” (thus, smart contracts) are activated using different types of authentication devices such as digital stamp, public signature, blind signatures, etc.  Likewise, “Privy Authentication” means that certain persons have the privilege of interacting with the contract.  Additionally, quorum control refers to a condition where a group of people may interact with the contract by election, threshold (like a kickstarter) or almost any quantitative function such as algorithm or time function.

Common electronic contracts (EDI’s) include the following (1): 

Administrative functions:

  • Product code and price catalogs
  • Catalog updates
  • Forecasts and plans
  • Deals and promotions
  • Statements

Pre-purchasing:

  • Requests for quote (& response)
  • Inventory inquiry/advice Purchasing
  • Purchase order & acknowledgment
  • Purchase order change & acknowledgment of change
  • Material release
  • Point of sale/inventory on hand Shipping and Receiving
  • Shipment status inquiry & response
  • Advance shipment notification
  • Bill of Lading
  • Freight bill Warehouse
  • Inventory inquiry & status
  • Shipping notice
  • Receipt confirmation
  • Shipment order
  • Shipment confirmation

Customs

  • Declaration
  • Release Billing and Paying
  • Invoice
  • Payment remittance
  • Credit and debit memos
  • Receipts

Conclusion:

The Boogie man of the Co-op movement is Big Box Corporate America such as WalMart and their digital siblings such as Amazon who provide consumption value often at the cost of community resilience.  Corporations have the resources to automate internal processes, suppliers, and labor.  Co-operatives, and localized producers in general, are at a severe disadvantage every time they must cross the transaction gap.  Large corporations can easily trade value within their systems paying taxes only when necessary.    

The knowledge and technology exists today for Cooperatives to accomplish the same thing using smart contracts and the Block Chain protocol.  To do so would create similar economies of scale with the added benefit of improving the distribution of wealth, manufacturing social capital, and storing value in resilient communities.  Further, crypto-currencies in general still suffer from that fatal flaw where they are not backed by any form of productivity.  To give the crypto-currencies a place to store value backed by community productivity would benefit all who anticipate such technologies.    

Primary reference for this article is from: Formalizing and Securing Relationships on Public Networks – Nick Szabo

 

 

 

 

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The NWO On The Block Chain

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On December 27, 2013

In General Information

The first line of Satoshi Nakamoto’s white paper reads as follows: “A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution.”  The goal is achieved quite simply by removing three frictions to the exchange of value among people.  

The First Friction:

The Bitcoin protocol goes to great effort to foil the bad players and reward the good kids with game based incentives.  The probable cost of an attack is greater than the likely benefit of attempting to do so.  This wipes out the massive and hugely expensive vetting apparatus of verification, fraud investigators, audits, charge backs, legal claims, and courts. 

The Second Friction:

With the judicial use of cryptography, the BCP wipes out a colossal industry of third party brokerage activity that withholds information about transactions ostensibly in the name of trust, fairness, and privacy.

The Bitcoin Protocol Analogy

The most obvious Bitcoin analog is to Gold; everyone gets this.  Due to the economics of scarcity, miners have an incentive to expend resources in order to add more gold to circulation.  However, as the scarce resource becomes more expensive to extract, the incentive shifts to transaction fees as reward for participating in the digital value exchange.  

Transactions are abundant. There is potentially no limit to the amount of transactions that can take place.  Participating in a transaction today does not remove future transactions from the account balance.  In fact, transactions can be created by anyone at any time, and combined or subdivided in any number or ways.  

The Third Friction:

The social analogy should be crystal clear, if not prophetic.  As Consumption Capital becomes unsustainable, Abundance Capital will emerge as the primary generator of value creation between people.  As such, the strategy for success in the BCP era, is not in the domain of tangible consumption, it is in the domain of intangible transactions.  In other words, everything that we call “intangible” in the Era of Scarcity, becomes “tangible” in the Era of Abundance, and vice versa.  

The New Tangibles:

The tangibles assets of the post BCP era are knowledge, innovation, and wisdom of people and communities of people as an abundant and recurring resource.  The business methods of the post BCP era will require the promotion, exchange, and manifestation of knowledge, innovation, and wisdom among communities of people.

New Factors of Production:

Productivity is in the old economy meant increasing the amount of stuff that can be made a certain amount of time.  In the new, productivity will involve maximizing the interaction of people within a certain amount of time, where the largest denomination is a natural lifetime.  The World According to the BCP is the world that was meant to be, not the world that exists today.

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What if Everyone Was a Bitcoin?

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On December 19, 2013

In General Information

There is no shortage of articles waxing aloof about how Bitcoin is just another example of a very few people controlling a very large percentage of an impossibly scarce object.  Others argue that the carbon footprint of Bitcoin mining is so excessive that the last coin will require all the energy of the Sun to finally extract.  Finally, Bitcoin are not backed by real form of productivity, instead, they are backed by the “the full faith and credit of the issuing algorithm”…. and, we all know how that goes.

What if all three of these problems could be solved quickly, cheaply, and permanently?  Suppose then that every person was represented by his or her own colored coin?  As such, each person owns all 21 million shares.  Proof of work is, in fact, a real proof of having created something through thoughts or actions managed through smart contracts in the block chain protocol. 

You don’t need to understand the mechanics, except that your currency is backed by your true net productivity.  Simple.

But the plot thickens.  A person with 21 million shares can give those shares to another person in exchange for something valuable.  The holder of the shares now has it in their best interest that the issuer is successful in life so that holder may enjoy increased valuation as the issuer’s coin become scarcer.  Of course it would be wise to diversify one’s holdings so an investor would try to hold as many different coins representing as many different people as possible, you know, in case one of them gets hit by a bus.

Talking about busses, it would be in the best interest of society to make sure that public transportation is safe and efficient because at any given time, they carry a valuable collection of social agreements to their collective proof-of-work event – an social analogy to a block chain itself.   

Now if we were all issuing currencies to each other and it was in all of our best interest that the other is successful, then a “generalized reciprocity” of favors, exchanges, and values would emerge in society.  The value of one’s community would reflect on the value of one’s personal coinage and vice versa.  The incentive to innovate new ways to create value in a community would be staggering having an impact on everything from governance to medical care.  The highest impact humans would become wealthy as everyone invests in their coinage.  Volatility would be reduced as everyone learns to be high impact as well. 

Not unlike any talented actress or gifted athlete, a form of human agency would emerge where some people specialize in the support and representation of high impact persons.   Teachers for example, would forego tuition in exchange for a dividend in their student’s future productivity.  Mentors would “cash in” their world experience by teaching people how to be successful instead of competing to the death (literally and figuratively). The things that people would build and create will reflect things that are useful to their stockholders.   

So as we look at the Block Chain Protocol for social utility far beyond Bitcoin, consider that the current flaws may be the future cures in disguise for some of our own deepest societal failures.   Do not overlook the implications of an economy where the intangibles become tangible.  This fact alone will measure into existence trillions of “units” of invisible value that are nowhere to be found in current accounting balance sheets.   That may be the fastest and most practical way to pay off the debt we owe to ourselves and our planet.

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Occupy BitCoin

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On December 14, 2013

In General Information

Occupy Wall Street had the effect of “measuring into existence” the 99% of people who subsidize the economic liberty of the top 1%. Now, with the BitCoin Protocol, the financial information gap between the 99% and the 1% is about to disappear. This is a fleeting moment in history and an opportunity that we must take for all it’s worth.

BitCoin, used as a currency, is a sideshow in comparison to the possibilities in the Block Chain Protocol (BCP) for frictionless transfer of ALL forms of value.  The best description that I’ve heard is that BitCoin is a “protocol for the synchronization of information”.   This feature alone – not the digital currency itself – is what will eventually doom brokers to a life of actually producing something of value for society.

The Block Chain Protocol can eliminate trillions of dollars in unnecessary friction from ANY transfer of value – not just money. But most importantly, the BCP provides a way to “measure into existence” human value attributes such as knowledge, innovation, and wisdom in a digital format and public repository.  Speculators are clearly not counting on 7 billion virtual currencies representing each individual contributor in an economy.  

People are Corporations

A well know politician once said “Corporations are people, my friend”. What he failed to realize, is that people could also be corporations.  The BCP allows everyone to equally access the right to become their own economic entity responding to real supply and demand for useful goods and services; raising money in a public stock market; holding individual IPOs; combining knowledge assets with others of their choosing; affixing contracts; time stamping tranactions; and issuing “BitShares” against future productivity as currency – all without any financial friction or corporate barriers whatsoever.   

The post-Dollar economy

Anyone with basic understanding of high-school mathematics can demonstrate how 50 Trillion Dollars in global debt, at compounding interest, can never be paid back.  This is an economic reality.  The question becomes, what kind of world do we want after the expiration of fiat currencies?  Will BitCoin, as a storage of value, amount to a convenient placeholder while the old financial system reboots anew in digital form, or is there a greater opportunity for humanity in mining BitShares?

When a currency enters hyperinflation, the results are characterized by the rapid and chaotic transfer of government (public) property to private holders – or vice versa. However, things could be very different with a third option that could actually advance civilization to a higher order.

In its nascent state, we describe this third option with terms like; The Commons, Open Source, Crowd Source, Crowd Fund, Social Capital, P2P, etc.  There are hundreds of thousands of start-ups and co-operatives (formal and informal) separately aiming down this path.  They need tools that help them integrate so that the output of one application becomes the input of the next application. The longer that they can operate outside of the fiat system (without reconversion to dollars), the greater they will fortify the next economic paradigm against unsecured currencies.

The End Game

Politicians have demonstrated their willingness and ability to bring the economy, and everyone’s associated assets, to the brink of collapse. This game survives only because the extractive 1% cannot build walls high enough to protect them against a complete financial meltdown. They still need food, clean water, electricity, medical care, education, civil services, transportation, and renewable energy … all the stuff produced by the 99%!

Suppose that the world were given the choice between a BitCoin, backed by nothing, and a BitShare backed by community productivity of all useful things?  The choice would be obvious thus creating the mother of all hedge funds resulting in the decentralization of value and power to the “The Commons” regulated by the open source technology of the Block Chain Protocol.    

Call to Action

We have a great opportunity ahead of us and only a few years to accomplish it before the BCP is compromised by decentralize money without also decentralizing all factors of production.  We simply can’t afford to let this go unanswered.   

We need to build the interfaces, the structures, application, and governance that will allow human “Intangibles” to become digital “tangibles”.  Only this will enable human flourishing over human extinguishing.  We need to turn our collective intelligence and computational horsepower to the epic task of mining BitShares, not necessarily BitCoins.

References:

How The Bitcoin Protocol Actually Works

Bitcoin Wiki – Contracts

True Value of Bitcoin – Stefan Molyneux

 

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Factors Of Production For The Crypto Economy

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On December 7, 2013

In General Information

One of the more interesting definitions and implications of BitCoin comes from Stephan Molyneux in this video.  His key points include:

1. Definition of BitCoin: a protocol for the synchronization of information.

2. The BitCoin block chain ledger can contain ANY information such as contracts, user agreements, DNA sequence, Patents, time stamps, contingency claims, even other crypto-currencies, etc, etc, … via scripts.

3. The greatest innovations will be in the development of these scripts as society re-organizes itself displacing banks, lawyers, conflict, and poverty to more productive enterprise.

With the reinvention of money comes the reinvention of productivity.  Each and every person now has the ability to become their own “corporation” by creating scripts that embed knowledge in the form of a tangible asset.   

The Ingenesist Project has been working in this area for a long time and we will unveil Curiosumé at the Future of Money and Technology Summit in San Francisco on December 9, 2013. The following images explain the Curiosumé protocol.

 

 

 

 

 

 

 

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