In the realm of economic development, the interplay between banking, insurance, and engineering forms a virtuous circle that drives modern civilization forward. However, the crucial role played by engineers, scientists, and technicians in this cycle is often overlooked in economic discourse. Their primary responsibility is to produce material facts, which involves identifying risk exposure, calculating the probability of risks materializing, and assessing the consequences of failures. When these components are harmoniously integrated, finance, insurance, and engineering can collectively support the sustainable and peaceful habitation of our world.
The Virtuous Circle of Economic Sustainability
The Importance of Material Facts:
Material facts are integral to decision-making processes. They are facts whose suppression could reasonably lead to different decisions. However, in our increasingly polarized society, the dissemination of disinformation poses a significant threat to the integrity of material facts. Counteracting this challenge becomes even more complex considering that technology facilitates the creation and widespread distribution of misinformation at an unprecedented scale. Meanwhile, securing material facts requires adherence to a specific sequence, a standard of proof, and an immutable record. This presents a simple problem in need of a solution.
The Role of AI in Securing Material Facts:
Enter the Innovation Bank—an initiative that leverages AI to curate and integrate validated material facts across diverse physical conditions, preempting the risk of disinformation. By acting as a formidable gatekeeper, this powerful system establishes a filter through which disinformation must pass to attain credibility. The value of such a “disinformation filter” transcends individual projects and encompasses the entire economy. Building this AI-driven solution is not only feasible but also imperative.
Join the Movement:
To learn more about the projects spearheaded by The Innovation Bank and contribute to this transformative endeavor, reach out to The Ingenesist Project. Together, we can construct a robust foundation that promotes economic stability, fosters material facts, and guards against the perils of disinformation.
In the ever-evolving landscape of technology, artificial intelligence (AI) plays a crucial role in enhancing the effectiveness and efficiency of various systems. The Value GameTM, powered by The Innovation Bank™, is no exception. By incorporating AI algorithms and machine learning capabilities, these groundbreaking platforms from The Ingenesist Project can further revolutionize the way we establish trust, verify claims, and combat fraud in real life systems that sustain civilization.
Patterns of Fact
AI can be employed in multiple stages of The Value Game to strengthen its integrity. Firstly, AI algorithms can assist in the initial claim recording process by automatically cross-referencing the information provided with existing databases, verifying its accuracy and authenticity. This reduces the burden on human validators and enhances the speed and accuracy of claim validation. Furthermore, AI can analyze patterns and detect any inconsistencies or red flags in claims, providing an additional layer of security and fraud detection.
Patterns of Fraud
As The Value Game accumulates a vast amount of data on claims and validations, AI algorithms can continuously analyze this information to identify trends and anomalies. By learning from past instances, AI can identify potential fraudulent behavior, detect patterns of collusion, and even predict future attempts at deceit. This proactive approach allows the system to stay one step ahead of attackers, making it increasingly challenging for them to exploit the platform.
Network of Trust
Moreover, AI can contribute to the ongoing curation of claims and validations. By analyzing the data collected, AI algorithms can identify correlations between different claims, validators, and professions. This analysis helps build a comprehensive network of trust, providing participants with a broader context and enabling them to make more informed decisions when validating claims. AI-powered insights can guide participants in identifying outliers and potential risks, fostering a more secure and reliable environment.
Transaction of Records
Additionally, AI algorithms can assist in assessing the reputation and credibility of participants within The Value Game. By analyzing historical data and interactions, AI can assign reputation scores to individuals based on their track record of accurate validations or fraudulent claims. These reputation scores can serve as an additional factor in evaluating the credibility of a claim or a validator, further strengthening the overall trustworthiness of the system.
Things that get better with age
With the integration of AI, The Value Game becomes a dynamic and self-improving ecosystem. As more data is collected and analyzed, AI algorithms continuously refine their models, improving the accuracy of fraud detection and claim validation. This iterative process enhances the system’s resilience and adaptability, enabling it to keep up with emerging tactics employed by attackers.
Adapting diverse datasets
The incorporation of AI into The Value Game also extends its applicability beyond traditional fields and professions. While initially focused on STEM professionals, the AI-powered platform can expand to cover a broader range of domains. By training the AI models on diverse datasets from various fields, the system can adapt to accommodate claims and validations across different industries, thus maximizing its impact and relevance.
A sophisticated and resilient platform
In conclusion, by harnessing the power of AI, The Value Game evolves into a sophisticated and resilient platform that effectively combats fraud and deception in real life systems. AI algorithms contribute to the initial claim validation, continuous curation, fraud detection, and reputation assessment, enhancing the overall trustworthiness and reliability of the system. With AI as its ally, The Value Game becomes a powerful tool that empowers individuals, safeguards authenticity, and enables trust to flourish in an increasingly interconnected world.
An engineer’s role is to mitigate risks in complex systems. Activities like flying through the sky, transplanting organs, and fiddling with energy are very risky indeed. The primary output of an engineer is the removal of these risks. It’s a straightforward concept: Engineers remove risk from complex systems.
A firefighter is worth a million dollars per hour safeguarding life and property – when there is a fire. The value of the firefighter is easily measured by severity of the fire. A fire protection engineer can design thousands of buildings that will never burn. Unfortunately, in the absence of a fire, there is no way to measure the true economic value of the engineer?
Reflecting on the complex global challenges that civilization faces: Are we fighting fires or solving fires?
Unless we accurately assess the economic value of engineers and incorporate it into our monetary system, it will always be more profitable to allow the world to burn.
Engineers remove risk from complex systems – this idea is easy to understand and the solution is actually quite simple – we have the technology and analysis tools to accomplish this with relative ease.
Please lend your support to The Ingenesist Project by contacting us directly for full specifications of this project, or by pitching in with the PayPal link above. If we don’t fix it, who will?
The process is so simple, it defies the imagination.
Countless words have been written about the nature of money and its role in society. Ultimately, money serves as a representation of human productivity, as people work and produce goods and services in exchange for it. The creation of money is based on the things we produce, allowing us to measure its value.
Banks address the time gap between production and payment by creating an asset called “future productivity.” This asset enables them to generate money before the actual goods or services are produced. It takes the form of debt.
However, innovation also represents future productivity, as it brings forth useful things that have not yet been created. In fact, approximately 80% of economic growth can be attributed to technological advancements. So, why can’t engineers adopt a similar approach to banks and measure money into existence? This would serve as a means of bridging the time gap and funding the substantial amount of innovation necessary to sustain our world.
Although it may seem like a straightforward idea, it is challenging to comprehend. The issue lies not in a broken world but in a broken monetary system. The solution lies in fixing this system.
To address these challenges and promote innovative solutions, please lend your support to The Ingenesist Project. We literally make money.
A bank will not lend money to a project unless it is insured. An insurance company will not insure a project unless it is well engineered. Engineering cannot be well done without a bank to cover soft costs. Together, this forms the virtuous circle of modern civilization.
While the banking and insurance piece seems straight forward, very few economic journals discuss the role of engineers, scientists, and technicians in this manner. Their role is to produce material fact:
1. Identify the risk exposure,
2. calculate the probability that risk will manifest,
3. review and assess consequences in the event that the peril does manifest.
Done correctly, finance, insurance, and engineering can sustain the indefinite peaceful habitation of the world.
The War on Facts:
If any of these three pieces are missing, distorted, or corrupted, the economics collapses, projects fails, and things blow up.
A material fact is a fact, the suppression of which would reasonably result in a different decision.
Wikipedia
As we increasingly endure a polarized society where disinformation is spread with precisely the intention of distorting material facts, nothing could be more important than a means for securing material facts. This is a simple idea.
There is the further disadvantage that technology itself vastly favors the cheap creation and distribution of misinformation – at scale – while securing material facts must be committed in a certain sequence, standard of proof, and immutable record. This is a simple problem to solve.
The Innovation Bank curates and integrates validated material fact across a range of physical conditions prior to the peril of disinformation occurring. Such a powerful gauntlet may provide a sieve through which disinformation must survive in order to establish credibility. The value of such a “disinformation filter” amounts to the value of our economy at large. This is simple. This is serious. This is something that we can build today.
Please contact and contribute to The Ingenesist Project for more information about The Innovation Bank projects.
The Innovation Bank is a novel method of business related to the integration and capitalization of knowledge assets. The Innovation Bank is an application of game theory, actuarial math and a simple native “proof-of-stake” blockchain. The system aims to unify the global engineering and scientific disciplines by incentivizing individual practitioners to form knowledge asset networks among each other by producing claims and validations related to physical, measurable, and observable facts. Each claim and associated validation forms a node in a network for which each participant is awarded a cryptographic token memorializing earned stake (equity) in the system. A secure, validated, and decentralized knowledge repository and access management system is secured by a simple native blockchain. Revenue is generated through the liquidation of earned tokens on an external market to third parties seeking access to network metadata for business intelligence. The intrinsic value of the network grows as the number of participants increases. As participation increases, the quantity and quality of the transaction records also increases. Third-party buyers may include banks, insurance companies, and private enterprise.
In the United States, the term “Engineer” is regulated by licensure boards, which means it refers to a person who is registered and licensed to practice engineering in the country. However, for everyone else, there is no clear definition.
The elusive nature of the term “Engineer” raises questions. Does it refer to someone licensed to practice in a specific jurisdiction? Or is it someone who has completed four or five years of university education? Does it encompass those who operate complex machinery like locomotives, sound boards, or building systems?
Considering that the engineering profession is responsible for nearly 80% of economic growth, it becomes crucial to establish a precise, measurable, and actionable definition. Without a rigorous definition, it is difficult to effectively manage the profession. These gaps in definition are significant oversights.
Given the lack of a suitable synonym for “Engineer,” we introduced the term “Ingenesist” with the following explanation:
The Latin word for engineer is “Ingeniator,” which is derived from two other Latin words: “ingenaire” (to conceive or derive) and “ingenium” (cleverness). The suffix “-ist” implies someone or something characterized by a specified quality. Combining these elements, an Ingenesist can simply be defined as a “creator of useful things.”
This straightforward definition is superior in describing the essence of engineering and its problem-solving nature. It can be put into action from an economic, political, or legal perspective, as there are rigorous definitions for what is considered useful and what is not. Importantly, this definition does not contradict existing conventions or institutions. It includes licensed and unlicensed professionals, as well as those from international backgrounds or those who rely on intuition rather than formal education in understanding the laws of nature. The term “Ingenesist” encompasses artists, craftsmen, technologists, and more.
Most importantly, the concept of an Ingenesist is inclusive rather than exclusive. It is accessible to anyone who chooses to be productive in a useful manner. Differentiating between what is useful and what is not comes naturally when using the term Ingenesist. It acknowledges the innate creative nature of our species.
The World is grasping for an “Easy Pill” to combat global systemic risk. What if such a thing actually existed, would we embrace it?
Image by PIRO4D from Pixabay
Imagine if there was a small and almost imperceptible flaw in modern capitalism that could be easily rectified. This single flaw might be the root cause of all the other problems we struggle to solve individually. The remarkable thing is that this flaw could be corrected without dismantling the entrepreneurial spirit, technological advancements, or the functioning institutions that already exist. Moreover, this correction wouldn’t require policy makers and business leaders to fundamentally change their ways.
Would you invest in a team that could address this flaw?
Let’s explore the flaw:
In order for economic growth to occur, technological change must always precede it. However, we currently approach the business of civilization as if economic growth can come before technological change. We have it backwards.
Consider this: the wheel, the wedge, and the lever were invented long before the establishment of international trade agreements. Somewhere along the line, we lost our way. Innovation is not derived from money; instead, money arises from innovation. Although it may seem trivial, this tiny flaw exerts control over almost every aspect of our lives.
Economics did not start with someone discovering $300 trillion in box somewhere. All money came into existence as a measurement of useful things that people have created since the beginning of time. By simply altering how we measure things, we can effect the value and distribution of money. Nowadays, when you ask a venture capitalist to define “innovation,” they might respond with something like, “I know it when I see it.” While this might be a valid measure for them, it holds little value for anyone else. What we truly need is a way to identify and measure innovation before it even happens. Surprisingly, this is a problem that can be easily solved.
Risk is the common thread that binds us all.
Risk is an inherent part of every decision we make, whether we’re venture capitalists, corporate executives, government policymakers, or members of the general public. In fact, risk heavily influences the premier corporate valuation tool, CAPM (Capital Asset Pricing Model). Risk is the true currency of our lives. For example, the value of a firefighter is determined by the severity of the fires they combat, yet a fire protection engineer can design 1000 buildings that will never burn. Our economy measures the fire itself, rather than the absence of fire.
Engineers exist to mitigate risk in complex systems such as airplanes, wastewater management, and medical procedures. Measuring risk is a relatively straightforward task. The insurance industry, for instance, consolidates various risks into sharing networks and assigns a “value/premium” to expected losses.
In contrast, engineers are currently organized in disconnected silos, subject to arcane jurisdictions and academic jargon. However, if engineers were organized in networks using a common ontology, similar to how systemic risk itself is structured, an immense amount of value could be measured into existence. This value can then be monetized equitably and on a large scale.
Introducing the Innovation Bank:
The Innovation Bank serves as the mirror image of a traditional bank. Its goal is to organize the engineering, scientific, and technology professions in a slightly different manner. By employing a combination of Game Theory, Blockchain Technology, actuarial math and Artificial Intelligence, the Innovation Bank facilitates the curation of innovation using a common ontology. Nothing else changes. Everything we currently know remains intact. The outcome is the ability to finance the removal of the risks that control us.
This solution is astonishingly simple, defying our imagination. Will we have the courage to embrace it?
The essence of a network lies in connecting people.
We invite you to join The Ingenesist Project. Your knowledge, experience, and creativity are invaluable in building this platform correctly. If you’re pressed for time, you can participate by making a donation of any size.
Please review our partial publication record listed below. We have published at the forefront of our industry, founded numerous start-ups, and our past participants have emerged as prominent voices in the new value movement. The Ingenesist Project has spent two decades maintaining an online presence, representing extensive research and collaboration involving over 120 researchers, engineers, and scientists from some of the most influential corporations and institutions worldwide. Help us unify the global engineering and scientific communities. Help us unite the world.
“A lie can spread halfway around the world before the truth even has a chance to put its pants on,” as the saying goes. This kind of leverage is not limited to lies alone. Take, for instance, the case of the shoe bomber, whose actions led to millions of people having to remove their shoes at airports for the past 20 years. Law enforcement faces the burden of being right countless times, while an attacker only needs to be right once. Despite the immense cost and loss of civil liberties, we still struggle to distinguish between fraud and fiction. It is imperative that we solve this problem as if our lives depend on it. Behind every instance of fraud lies a mountain of truth waiting to be curated.
But what if we could reverse this leverage? What if the attacker had to be right a thousand times while the target only needed to be right once?
Introducing the Value Game, a feature of The Innovation Bank™. This game applies game mechanics to address this challenge. Here’s how it works: When a person makes a claim about something in the physical world, such as their education or a toxic spill, that claim is recorded on a blockchain, timestamped, and made immutable. The player then seeks another player to validate their claim by stating, “I validate that this claim is true.” The claimant and validator are permanently linked on the blockchain. All these claims and validations are combined in the community. Participants are rewarded with digital tokens that can be converted to cash. Problem solved!
Let’s see how this game plays out in a scenario. Imagine a super villain named Max Mallory who wants access to a nuclear reactor for his nefarious plans. However, he lacks the necessary education and experience as a nuclear engineer. Using The Innovation Bank, Mallory makes a claim that he is a nuclear engineer. But he struggles to find another engineer to validate his claim. So he pays his sidekick Carl to validate it instead. Both receive tokens as a reward. So far, so good!
Max Mallory’s Sidekick, Carl
Mallory then attempts to enter the reactor gate but is denied. His transaction record doesn’t match that of a typical nuclear engineer. Mallory tries to fill in the gaps by consulting Wikipedia, but the blockchain doesn’t allow for going back in time. Mallory would need to complete high school before going to college. The Innovation Bank registers Mallory’s unvalidated claim (a fancy term for a lie) and Carl’s validation as a “dead head claim” (a fancy term for incompetence).
If Mallory or Carl ever want to engage with the Innovation Bank in the future, such as for job applications, loans, or social media comments, they will face increasing difficulty in finding validators. Their only option would be to start over with a new profile from t=0.
In the long run, a successful attacker would need to be an accomplished professional nuclear engineer with a long record validated by many colleagues, mentors, publications, and institutions, all in a specific sequence and over a significant period of time. The reward from the attack would have to outweigh the attacker’s potential losses, as they would likely be identified, caught, and prosecuted. However, it’s more likely that they would be thwarted at an earlier stage with an unvalidated claim for a less critical offense.
In general, there is no incentive to cheat in this system. Aiding and abetting cheaters is also discouraged. Both claimants and validators face future consequences if they are careless with facts and associations. The costs of cheating far outweigh the benefits of engaging in illicit activities. As a result, routine operations of power plants do not incur punitive costs.
As the Value Game unfolds, with millions of claims and validations across various professions and fields, the likelihood of encountering fraud or incompetence becomes exceedingly small, approaching zero, particularly for higher order claims. The aggregate database of truthfully interacting STEM professionals and beyond trains the algorithm to identify outlier behaviors. The more truth stored in this database, the more valuable it becomes in separating fact from fiction and increasing the value of digital tokens. As the tokens gain value, the network’s security improves.
Now, the truth can travel halfway around the world before the lie even has a chance to put its pants on.
The Innovation Bank is much more efficient than attempting to unravel anonymous rumors spread on the internet. It is also more efficient than having to validate each claim individually. Everything is pre-validated, minimizing prohibitive punitive costs and controls. This “judicial system” is self-funding and self-correcting. The process of curating claims and validations forms the social fabric upon which we all rely. Every participant is incentivized to collaborate and gain stake in the system. Meanwhile, there is no incentive to exploit or corrupt the system. Forensics are performed before failures occur, ensuring a reliable and trustworthy environment.
We are engineers — the type that makes airplanes that plane, bridges that bridge, and elevators that elevate. The type of engineers that supply electricity to people and their Bitcoin – which was likewise created by engineers on an interface platform that was (you guessed it!) created by engineers. No offense to bankers, lawyers, and politicians, but they can’t do what engineers can do for an economy. So let’s leave them out of this discussion for now, and work with what’s obvious to engineers.
Yes absolutely, a Central Bank Digital Currency (CBDG) is a great idea
But like anything in engineering, the devil is in the details. First, the dollar is already digital so any improvement would need to be less centralized and that means blockchain. We also know that the proof-of-work consensus algorithm is too energy intensive so it must be proof-of-stake, or equivalent.
No intrinsic value equals no value, period. The CBDG must represent something real and useful, otherwise nobody will produce stuff in exchange for it. The Federal Reserve needs to figure out what tangible metric will bring the digital currency into existence. For example, the dollar represents aggregate US human productivity.
Aggregate Technological Change (ATC)
The new CBDC should not be issued as a function of Gross Domestic Product (GDP). The dollar already does this. Rather, the new CBDC should be issued against a new metric called Aggregate Technological Change (ATC). Technological change is a fancy word for “innovation” resulting in an increase of human productivity. This is the domain of Engineers and Scientists.
With this arrangement, the dollar and the CBDC would be fully convertible because they both represent the same asset class i.e., human productivity. The two currencies would be supplemental and complementary to each other. They would check and balance the other. At some point they will become the intrinsic basis for the other. A condition can then emerge where it becomes more profitable for Digital Capitalists to preserve the underlying asset rather than consume it. Ultimately, that underlying asset is the continued productivity and preservation of Planet Earth and her inhabitants.
The missing piece:
We need to come up with a reliable system to identify and measure the fact of innovation before it happens. The Ingenesist Project is developing a novel business method and platform combining game theory, actuarial math and blockchain technology to convert intangible assets into tangible assets. The issuance of each unit of CBDC can then represent the intrinsic value of this new asset class.
We are not bankers and we are not saying that this is final answer. However, we are certainly early pioneers in the topic of a supplemental US digital currency long before the Federal Bank Announcement. Our work in this area has been published (juried) by the NSPE, ASCE, ASME, NAIC/CIPR, NSF, and many others.
A few key points:
If built correctly, a CBDC is a great idea
If not, the CBDC may be no better or worse than a digital dollar.
No intrinsic value means no value. Period.
Money must represent human productivity. Otherwise, no one will produce stuff in exchange for it.
The underlying asset is Earth and her inhabitants – and must be preserved, not consumed.
Conclusion
So there you have it — an engineer’s interpretation of the new Central Bank Digital Currency.
The next time you’re sitting on an aircraft separated from instant death by .040 inches of aluminum skin, please feel free to disagree with your engineers and scientists. Now that I think of it, what is a perfect analogy for the state of the world!
It is not as easy as it may seem to find a working definition of innovation. There are as many definitions as there are experts claiming to hold the secrets of innovation. The simplest definition of innovation that I could summarize based on top sources is as follows:
Definition of Innovation 1: A new idea resulting in an economic outcome.
The problem with this definition is that you cannot solve solve one equation with two or more unknowns. What is new? What is an idea?, and What constitutes an economic outcome? Finally, How can we identify innovation before it happens? These are significant barriers. I spoke with one VC about this problem and his response was:
Definition of Innovation 2: “I know it when I see it”
A definition is supposed to be distinct and precise. One should be able to predict, identify, or anticipate the object based on its definition. It appears that innovation can only be defined after the fact and not before, by most accounts. As a result, we treat innovation as if it were random or accidental or so unique that only a gifted few possess the ability to achieve it. This is important because innovation is the single most important determinant of achieving a sustainable economic environment.
Economics is the science of incentives. Calculus is the science of change.
When I was about 6 years old I got my first bicycle. It was a single data point sitting under the Christmas Tree. It came with a little pamphlet with lots of information on how to use it. My first attempt started just like the pamphlet described, until I crashed. The promise of stylish and speedy mobility was a strong incentive. Each time I crashed, my knowledge of bike riding increased at a very rapid pace as I developed new ideas about balance, coordination, and impact. I frantically innovated solutions to my problems until I was successful. As I progressed to bigger bikes and various motorcycles, I developed the ability to anticipate reactions to future obstacles based on a so called wealth of past experiences. I had developed Wisdom.
Toddlers can be readily observed innovating ways to carefully descend the stairs backwards on their tummy. This thought sequence repeats itself continuously throughout their formative years and into adulthood. A wise person is generally witnessed a great many outcomes and always seems to know what to do, when to do it, and why it should be done.
Hang on as this is going to get a little bit wonky:
Most engineers and scientists would recognize the following as a differential equation. The relationship between data, information, knowledge innovation, and wisdom are classic derivatives:
The value of information is derived from the value of the data
The value of knowledge is derived from the value of the information
The value of innovation is derived from the value of the knowledge
The value of wisdom is derived from the value of the innovation
This is the basis of the WIKiD Tools algorithm (Wisdom, Innovation, Knowledge, information, Data) developed by The Innovation Bank
Definition of Innovation 3: Innovation is proportional to the rate of change of knowledge with respect to time.
I certainly don’t expect a call from Merriam-Webster or widespread agreement from the innovation consultants any time soon. What is important is that this definition does not contradict any of the other definitions. And, it can be easily expressed as an algorithm suitable for machine learning, with data points that can be identified, measured, and validated.
We can now go about he business of creating conditions where knowledge is allowed to increases at a very high rate. Innovation cannot happen in a vacuum.
The Holy Grail of Finance
Predicting the fact of Innovation before it happens is the holy grail of finance. While many corporations and venture capitalists are somewhat successful at identifying a single product that will produce an economic outcome, they do it at the expense of foregoing the ecosystem from which that product arose. As such, predicting the Return on Investment (ROI) may be easily skewed by ignoring the broader social consequences of the product. Deficiencies in data, information, knowledge, and wisdom are the leading factors in start-up failures, not innovation.
Using a sports analogy, competition is a good way at arriving at the best solution to a specific objective. But in order to arrive at a single winner, you must first manufacture 10 times more losers. While conflict and competition is indeed entertaining, this is a very expensive and inefficient way to go about meeting the needs of consumers, let alone a crowded planet.
Intrinsic Value
Innovation is ubiquitous, interconnected, and interdependent on a sequence of factors shared across diverse people and places. Innovation is the intrinsic characteristic of our species and wholly responsible for the advancement of civilization itself. Everyone groans about how money is losing its intrinsic value because of inflation, corruption, or runaway national debt. As a result, cryptocurrencies conveniently drop the idea of intrinsic value altogether. People look to government, charismatic leaders, academia, and industry to solve staggering systemic risk and environmental collapse – to no avail.
Yet, all along, there may just be an extremely simple and inexpensive way to represent the intrinsic nature of innovation as the basis of value that we can quite literally pay for our own preservation. The following chapters describe this method. Please join us at The Ingenesist Project
What single problem must all engineers solve? Hint, the answer so simple, you can’t even see it.
The Paradox of Invisibility:
A firefighter may be worth a million dollars per hour when there is a fire and they courageously save lives and salvage property. The value of the firefighter is derived from the severity of the fire. On the other hand, a fire protection engineer can design a thousand buildings that cannot burn. But the true economic value of the engineer cannot be measured in the absence of a fire. The same can be said of aircraft that do not crash, bridges that do not collapse, and pandemics that do not spread, etc.
What single problem must all engineers solve?
Answer: engineers remove risk from complex systems. This is true for every single engineer and may even serve as an adequate definition for engineering at large. Engineers increase human productivity by reducing the risk to human life and property when confronted with the natural constraints such as gravity, temperature, impact, etc. The value of engineering is literally immeasurable.
But wait, risk can be measured. Insurance companies and financial institutions do it all the time. The method is a little bit counterintuitive, but actually quite simple and well suited for computational analysis. A simple example is presented below to lay out the data process which may be scaled by machine learning and instrumentation. All data must be true and validated in order for the math to work out. Here goes:
A Simple Example:
Consider 10 identical cabins in the forest. Each has a replacement cost of $10,000 dollars. It is well documented that one will burn down every year but nobody knows which one is next. So each owner needs to hold $10,000 dollars in the bank in case their cabin burns down. Because all of the cabins have the same replacement value and all have the same likelihood of burning, the cabin owners determine that they can each throw $1000 into a pooled savings account every year and whosever cabin burns can use the money to rebuild. So instead of tying up $10K each, cabin owners must only hold $1K each. The remaining $90K total can be released for investments and economic growth. This is called a “mutual”and it is the foundation of the insurance industry.
Engineers solve risk in 3 ways:
Engineers follow a similar thought pattern when addressing problems – this is so natural that they often don’t realize they are doing it.
They first invent ways to identify the existence of a peril.
Then they invent ways to reduce the probability that the peril will happen.
Finally, they invent ways to reduce the severity of consequences if the peril does happen.
Each of these actions are identifiable, verifiable, and measurable.
The Innovation Bank:
The Innovation Bank would serve as a data logger to curate the validated claims of all fire protection engineers which can be analyzed to estimate how much risk has been removed from the “fire economy”. This value can be represented as a cryptographic token (on a dedicated blockchain) that may be purchased by banks, insurance companies, municipalities, corporations and property owners to access the database to better understand their specific risk exposures across a wider spectrum of ignition sources.
The value of the tokens compensates the engineers to perform more comprehensive fire safety surveys and mitigation strategies. This positive feedback loop eventually reducing total risk the near zero.
This same token can be applied to all engineers and scientist for all applicable physical and environmental risk reduction.
The World is on fire
The example above describes only one example of one peril related to one engineering discipline. The reality that confronts civilization today include multiple complex global systemic risks impacting nearly every facet of life on Earth. These include, but are not limited to, climate change, pandemics, political instability, grinding debt, wealth inequality, and more.
The only way to untangle every contributing risk exposure and replace it with comprehensive solutions that do not break the bank is to introduce a parallel financial system that hedges the one currently being stretched to the limits. A digital token that represents Engineering and Scientific risk mitigation would be mutually convertible with national currencies and therefore taxable and transparent to regulatory standards. The two currencies would hedge each other. This is what a balanced budget could look like.
What is an Innovation Bank? At first blush, an Innovation Bank sounds like a place where innovators can make money for developing their ideas. Sort of like venture capital. But if we drill down a little further and look at how a traditional bank actually functions, we find a far more interesting opportunity.
People go to a bank and borrow money to, say, buy a house. Most people think that the bank is sitting on a bunch of cash in some savings account waiting to buy your house for you until you can pay them back. This is not entirely true.
Money is measured into existence.
When you sign the loan papers, you are committing your future productivity as collateral for the loan. From the simple act of signing a document, you create an asset called “my future productivity”. Through the miracle of fractional reserves banking, the bank can then conjure into existence the net present value of your future productivity to settle the note on your house. Money is literally measured into existence where your promise to pay is the underlying asset. The house is the game incentive that motivates you to go to work. Your productivity combined with everyone else’s forms the basis of your national currency.
Most people are shocked when they see how simple this process is. Money must represents human productivity – otherwise nobody would work in exchange for it. Debt is just a fancy name for future productivity, which is productivity nonetheless. The bank is the place where this accounting ledger is secured, not so much the money.
The image in the mirror.
Innovation and debt have a lot in common – for better or worse, they both represent future productivity. If debt can be used to measure money into existence, then innovation can be used to measure money into existence as well. The difference is that the consumption of objects that you make is easier to measure than the innovations required to create them. In a way, venture capital is an aberration – the thing that should not need to exist if we could measure innovation in any other way. The Innovation Bank was developed to solve the innovation paradox.
The Innovation Paradox
The invention of the wheel, wedge, and pulley came long before the invention of international trade agreements. Technological change must always precede economic growth, yet innovators still need money (economic growth) before they can afford to create technological change. This is the innovation paradox. We are living in the mirror image of the economy that was supposed to happen — and we think this is reality. The financial system has gotten it backwards. Corporations and VC can select and prioritize what gets engineered and what does not, but there is little regard for the wholistic nature of innovation – to preserve scarce resources rather than consume them. As a result, the true potential for value creation by the innovators of the world goes fallow.
The Innovation Bank resolves the innovation paradox by issuing a digital token on a native blockchain that represents the intrinsic future productivity of engineers and scientists. Not unlike a traditional bank, the Innovation Bank also employs a ledger, a value game, and actuarial math. Also like a traditional bank, a claim and the validation process represent the act of committing an asset that represents future productivity. The interconnections of these assets provides important data driven business intelligence to a market. The market responds by placing a value on the token to incentivizes production of more innovation.
Taken together, The Innovation Bank prints money in the exact same way using the same systems, methods, and institutions as traditional banking. The difference is that The Innovation Bank increases human productivity whereas a traditional bank consumes it.
The Innovation Bank is an autonomous network platform applicable to all branches of technical services enterprise. The platform is governed by game theory, actuarial math, and blockchain technology. The purpose is to capitalizing the STEM professions.
The Innovation Bank Project Overview
The objective is to reward individual practitioners to establish physical facts in collaboration with other practitioners. Knowledge, innovation, and wisdom may be discerned from these interactions. Where such metrics exist, intangible “in-situ” knowledge assets may then be capitalized in a manner analogous to how tangible assets are capitalized in the existing economic system.
Past research has demonstrated individual components of the Innovation Bank within various for-profit enterprise settings. This current effort is unique in its attempt to integrate these components in an autonomous public network.
Several factors need to be taken into consideration:
Engineering is an essential industry – it is essential that the Innovation Bank is complementary rather than disruptive to existing institutions and operations.
All STEM professionals and practitioners are unified and enabled for cross-discipline interaction.
Practitioners are economically compensated within the platform for their contributions to the Innovation Bank. Compensation is proportional to the value of the contribution.
Practitioners own, control and hold title to their identification, and thus, their specific transaction records.
Specific Outcomes:
The initial funding for The Innovation Bank will result in the production of a minimum viable product comprised of an operational native blockchain with decentralized governance, algorithmic token allocation, and database auditing system (block explorer). These outcomes will be suitable for research, analysis, development and future growth within the professional and academic STEM communities. This test bed will allow us to develop means, methods, and metrics for advancing the above considerations.
Intellectual Merit:
The purpose of the Innovation bank is to unify the STEM professionals in society at large. Typically, STEM professionals are segmented by institutions with mismatched ontologies, competitive restraints, or regulatory limitations. While such hierarchical arrangements were well-serving in earlier times, new tools exist allowing network platforms to efficiently deliver value at speed, and at scale.
The core activity of the Innovation Bank is to develop worthy claims such that a qualified validator would be willing to be permanently and immutably associated with the claimant. This union forms a node with two branches for which each would be compensated in proportion to their total stake in the system. A network graph is thus formed from the interconnectivity of aggregate nodes and branches.
The dominant game strategy for each individual would be to allocate knowledge resources to where they are needed most rather than where profits are most assured. Financial value is derived from the dynamic metadata embedded in the aggregate network yielding business intelligence which would command a premium over static non-validated data.
Broader Impacts:
Economic growth is contingent on technological change – this is the exclusive domain of STEM professionals and practitioners. There is currently no reliable way to directly measure the impact of technological change on economic growth. Pricing and allocation are often irrational. Engineers, scientists, technologists, and mathematicians, serve to remove risk from complex systems ranging from consumer products to public infrastructure and the natural environment.
The Implications of the Innovation Bank includes the reduction of systemic risks and improved allocation of natural and intellectual resources. In essence, The Innovation Bank will gradually replace Consumption Capitalism with “Preservation Capitalism”. The introduction of a new risk-backed asset class would amplify the missions of existing institutions such as universities, corporations, finance, insurance, and government.
Given a game that everyone can potentially win, universal engagement in STEM education and STEM applications would become a dominant social policy strategy. More information can be found at The Ingenesist Project. Please contact us for more information regarding The Innovation Bank Project Overview or please read the the following paper:
Many blockchains exist for many reasons, but none are built for the purpose of discerning physical fact from digital fiction. Where other industries use blockchain to correct their flaws, a blockchain of engineers and scientists can amplify their superpowers. Our ability to leverage truth may be the most powerful tool available to shift political priorities toward resolving our most pressing Global challenges.
For almost a decade, we have been writing about how four important aspects of blockchain technology could create thousands of times more value if applied to the engineering and scientific professions rather than the financial industry. We have also been amazed by the early ambivalence, reluctance, and often visceral resistance among some professional engineering societies, educational institutions, and engineering enterprise leaders, toward this technology.
Engineers and scientists need to reorganize ourselves fast if we are to have any expectation of pulling out of our flaming planetary tailspin of social, monetary, and ecological unrest.
The Thing That Happened.
Blockchain blew onto the scene with the Bitcoin white paper published in 2008. This technology was coincident with the 2008 financial crisis which had exposed near-fatal structural vulnerabilities in our financial system — going so far as to suggest a new form of currency could be developed. Blockchain introduced the idea of immutability to the financial system where laws had failed, thus code as law became the mantra.
An essential part of this arrangement is that there must be no overarching organization that can act against the consensus of the entire community and alter any transaction after the fact. This is broadly called “decentralization”. This puts many financial transactions at odds with governments who enforce laws (i.e., law is law). That struggle continues.
1. Immutability is our superpower.
Unlike the financial industries, engineers and scientist are abundantly familiar with immutability. You can’t return the lumber to the forest. An airplane can’t be un-crashed. You can’t un-pour concrete. In fact, all scientific processes are irreversible – that is what entropy is all about. In effect, blockchain would be far better suited to represent the immutability of the underlying asset rather than the flimsy paper that represents said asset. This makes more sense.
2. Engineers and Scientists are Already Decentralized.
Earlier, I complained about about resistance by the engineering institutions. What if this flaw is actually a feature? The experience taught us that there is no singular engineering or scientific authority that can sufficiently control or enforce its will on any of the others. Rather, we found engineers and scientists to be sequestered behind a multitude of organizational silos such as corporations, professional societies, ontologies, jurisdiction, national boundaries, academic titles, etc. Even if they wanted to change, they could not find each other to do so. It is no wonder that intellectual capital is called “Intangible” on a corporate balance sheet. In effect, the engineering and scientific professions are already decentralized. All we need to do is measure ourselves into a “tangible” existence.
3. Widespread Consensus Already Exists.
There is likely no greater consensus in human civilization than the laws of Nature. Every Noun on Earth is subject to these laws without exception. The scientific method, considered the greatest innovation in human history, provides us with a means to update, modify, correct, and replace old consensus with renewed consensus. Everything else can be expressed as the probability that a consensus exists. The scientific method is able to defend against failures in a manner not unlike the Byzantine General’s problem upon which much cryptography is based.
4. A Stable and Convertible Token
Money represents productivity as measured by Gross Domestic Product. Dollars represent American productivity, Yen represent Japanese productivity, etc. Yet nearly 80% of all increases in GDP can be attributed to technological change. This is the domain of engineers and scientists. Therefore, a token representing engineering and scientific productivity also directly represents GDP. In other words, we can print money.
Here’s the Good News
Blockchain technology was invented by engineers as a direct analogy of the engineering process – not finance. This is actually very good news because nobody controls a monopoly on intellectual capital which must be fought, beaten, and dismantled in order for engineers and scientists to reorganize. Engineers and scientists can build their own blockchain that represents their work-product and govern the presentation of physical fact over digital fiction. Engineers can exist with out Blockchain but blockchain can’t exist without engineers. This is a game we can easily win.
A Blockchain Of Engineers and Scientists
Financial products are fictitious representations of real things and therefore easily manipulated into many forms while the asset that they represent remains physically unchanged (suitably called “hypothecation”). There exists a powerful technology that is abundant and cheap and that can directly express physical fact as a monetary unit rather than financial fiction.
If we work together, global engineers and scientists can simply walk onto the economic landscape unchallenged to begin altering the development priorities for the World. No kidding. Again, there is nothing standing in our way, except our own unwillingness to change. This may be the most important opportunities that has ever been presented to the Sciences.
Blockchain Is Better for Engineering. Global Engineers and Scientists must adopt Blockchain Technology to directly enforce physical fact over financial fiction.
Global risk requires global engineers and scientists
The Innovation Bank may be the most important advancement of the Post-Covid Era. The global pandemic is only a symptom of larger systemic risks that are challenging our world. Climate change, wealth disparity, access to work, education and health care are all global problems manifesting as racism, fear, distrust, and division in local communities. The pandemic further demonstrates how centralized control structures are tragically out-performed by a networked attacker. Rather, legacy control structure fomented social unrest even further. The term “Going Viral” takes on a new and dangerous meaning.
Lessons Learned
What if we can take what we have learned from new technologies, new ideas, and new organizational systems that are currently deployed in networked platforms, and apply them toward mitigation global systemic risk? If Uber is a data service cloud with cars at the end of it, and AirBnB is a data service cloud with beds at the end of it, then imagine The Innovation Bank as a data service cloud with engineers and scientists at both ends of it. This article provides a framework for decentralizing global engineers and scientists. The Innovation Bank is an auto-funding platform devised to address global systemic risks.
Measuring Invisible Value Into Existence
The Innovation Bank use blockchain technology, game theory, and actuarial math to measure and calculate the direct economic contribution of engineers and scientists. STEM professionals create knowledge assets by making claims and validating claims related to physical fact. The platform produces a cryptographic token which serves to permanently record these assets set in time. Business intelligence is created by mapping interactions among engineers and scientists. This imparts value upon the tokens and incentivizes increased rate of production of knowledge assets. The tokens are then used as payment to fund engineering and scientific works that address the world’s most pressing problems.
Supply and Demand For Knowledge Assets
Our current monetary system creates money in a similar way. The value of money is supported by the supply and demand for the things that people produce as measured by Gross Domestic Product (GDP). It is usually easy to measure the quantity and quality of things on the GDP. It is difficult to measure intangible assets such as intellectual capital, creativity, and innovation. The Innovation Bank converts intangibles assets into tangible assets in the form of predictive data which can be easily measured.
The economic value of Engineers and Scientists is measured by applying blockchain technology, game theory, and actuarial math (risk analysis) to a networked platform of global STEM professionals. The nature of risk is volatility – unpredictable outcomes. If we can measure knowledge assets directly, we can trade predictable outcomes efficiently, and therefore manufacture predictable outcomes as we would products and services. This is how we can “balance the books” between our tangible and intangible assets.
Again, this is an important paper. Please let me know if you have any questions, ideas or contributions for this project. Thank you.
We are all familiar with the sentiment “if only there were more money, all our problems would be solved”. That is only about 20% true. The Innovation Bank is a system being built to solve the other 80% of our problems.
Money as we know it is a generalized accounting of all the things that humans produce. For example, Gross Domestic Product measures tangible value, it does not measure intangible value. Yet 80% of technological change can be attributed to intangible value creation (Solow, R). These include social capital, creative capital, and intellectual capital.
We need to form a new type of money that measures the other 80% of the economy — the invisible stuff. This is where the big solutions are. Solving Global Problems requires global solutions that must all use the same units of account. VC and the USPTO try to do this, but only a tiny percentage of intangible value ever gets converted to tangible assets in this way. We need something better, comprehensive, and scalable.
Data as Currency
Data is emerging as a new form of currency which can be used to visualize, predict, and assess the value of intangible assets. The problem is that bad news is thousands of times more “tangible” than good news. A single attacker on Social Media can sink a business because nobody counts the 1000 perfectly satisfactory prior transactions. As David Mustaine elegantly croons “Peace sells but who’s buying?” Another version of Stanley McChrystal’s “The good guys need to be right 100% of the time, the bad guys only need to be right once.” This can put a horrible skew on things and AI can’t fix it.
The “good intangible” data needs to be proactively curated as part of one’s everyday professional activity record. There needs to be a simple interface where a person can produce a claim, and that claim can be verified by a recipient or observer. Then we can creating a data node with two at least two branches that can be aggregated with everyone else’s transactions. The resulting dataset, while enormous, would yield a tangible measure of social, creative, and intellectual capital.
Most importantly, this dataset needs to be populated and in direct control by the persons whose transaction record is being curated. It is important that this system is decentralized since the data will be extremely valuable. Someone else will gladly do it for us with every manner of IoT sensor, AI bot, or some old-school regulatory hurdle.
The Innovation Bank
The Innovation Bank uses game theory and blockchain technology for the purpose of curating valuable, truthful, productive, and validated “good data” created by people and their productive interactions with each other. There is no entry for bad news. The Innovation Bank rewards the users with a cryptographic token that memorializing their transactions. The tokens may then be exchanged for access to the metadata curated by others on the platform. This technique for delivering the right asset to the right place at the right time thereby releasing the other 80% of economic value produced by society.
In short, The Innovation Bank is auto-funded by creating a form of money that measures the remaining 80% of economic output. The Innovation Bank incentivizes high impact solutions precisely when and where they are needed most. There is a market for that, all we need to do is measure it into existence.
“Technological Change Must
precede economic growth. We are going about the process of Globalization as if
economic growth can precede technological change – this is not sustainable” – D.
Robles
The Ingenesist Project is deploying our blockchain based ancillary innovation solution to important projects and institutions in the US. By representing intangible assets as tangible, and using a novel tokenization strategy, ancillary innovation can be equitably deployed thereby restoring the balance between technological change and economic growth.
Commercializing Innovation
The successful commercialization techniques of novel ideas or research has evolved over the ages into an elaborate techno-legal-fiscal monstrosity of regulations and gatekeepers. It did not start this way and it may not need to continue this way.
All innovation stands on the shoulder of some prior
innovation – e.g., the wheel, wedge, and lever are still ubiquitous in modern
life. Innovation has always existed, but
was greatly accelerated by the creation of the Scientific Method, considered as
one of the most important advancements in human thinking. The
Scientific Methods required inventors to determine causation and enforce the
discipline of disproving the null hypothesis as a condition of validity.
The Patent system was created in the 1790 and is largely responsible for the industrial revolution by giving inventors a temporary monopoly so that they can develop their works. The cotton gin, the steam locomotive, Portland Cement, the electric generator and propeller were patented during these times. Eli Whitney, Faraday, Edison, The Wright Brothers, Henry Ford all benefited from the patent systems as did society as a whole.
As secondary inventions were built over primary inventions,
the velocity of innovation increased dramatically. This cause a financial disconnect where the
new inventions could not be funded directly from the revenue generated from prior
inventions. Things became more complex in the age of computers and internet
where all prior patents could be “re-invented” on a computer of over the
Internet ushering an era of very rapid innovation across every industry.
Today, the velocity at which total innovation occurs vastly
out-paces the velocity of the mainstream financial means for funding – as was
the original intent of the Patent System.
The result was an inversion whereas technological change once preceded
economic growth providing a means to fund continued innovation. Now “economic growth (capitalization)” must
precede technological change in order to fund innovation. This is an unnatural condition that gives
rise to various debt related instruments and institutions such as “venture
capital” who select winners and losers based on factors that may not be driven
by the unity and advancement of society as intended by the patent system.
Most new ideas are abundant, unable to be restrained, dynamic
and interdependent. Most ideas include elements of human nature or intangible
value that simply cannot be expressed in the legal terms of a patents. There
is now a very large gap between the patentable invention and the commercialized
invention. Nearly all of the activity in
this gap is innovative and intangible in nature, that is; commercializing a
novel invention is likewise novel.
Ancillary Innovation:
Where Secondary
Innovation is defined as a new or deliberate application or modification of an
existing ideas, methods, or device. Ancillary Innovation refers to the provision
of necessary support to the primary activities or operation of an organization,
institution, industry, or system. Ironically,
ancillary innovation may be the greatest untapped opportunity for primary innovation
since the invention of the Patent system.
Commercializing Ancillary Innovation differs in many ways than primary or secondary innovation.
For example, even if a marketing study demonstrates that a
primary innovation will fail in a certain demographic, the ancillary innovators
were successful regardless of the impact on the primary invention. Killing a bad idea early is the hallmark of
Capitalism. In fact, the value of the Ancillary
innovation staff becomes increasingly honed with each experience being applied to
the next market study until the support professional is regarded as having
wisdom.
The nature of statistics is that an experimenter can observe
a small sample of normally distributed events, and calculate the probability
that the next observation will fall within a prescribed size, condition, performance,
etc. Managers are generally characterized
by their experience and thus their wisdom I being able to, say, assign the correct
allocation of resources or priorities, etc.
Many accelerators, incubators, and venture capital firms
serve in the capacity of ancillary innovation.
They are run by people whose past experience is sufficiently (statistically)
populated with failures and successes such that the probability of success in
the ancillary innovation process is increased when given a new set of
circumstances.
It is also worth mentioning that the value of the commercializing ancillary innovation far exceeds the value of the commercializing primary innovation, yet it is possibly the least understood. Furthermore, an enormous amount of innovation never reaches fruition for lack of ancillary innovation resources. It seems somewhat odd that so much technological innovation would be allocated to making a mundane passenger vehicle .5 seconds faster on its 0-60 time when the same technology could elevate entire communities from poverty. The difference is the prioritization of ancillary innovation.
Primary originators often receive a very small percentage for their contribution to the ancillary enterprise. The value of the commercializing ancillary innovation may be characterized by the quantity and quality of risk removed from commercialization; as compared to a risk-free hypothetical value of the primary investment alone.
Each of these failure modes exist due to an absence of
ancillary innovation of some kind. Each requires
a deep and highly specialized set of knowledge assets to mitigate. No single experience set can mitigate all of
them, and most inventors are lacking most or all of the skills required to cover
the ancillary innovation roles.
1. Lack of market need (42%): Metaphorically Is
your product a vitamin or a Painkiller.
2. Lack of cash
(29%): Many startups run into money problems /short runway.
3. Wrong team
(23%): Having a cohesive group of highly motivated, persistent, and diversely
skilled people is crucial for startup success
4. Too much
competition (19%): A second-mover advantage allows new competitors to
quickly capture market share that you helped validate.
5. Pricing issues
(18%): Figuring out how to price the product.
6. Poor product
(17%): founders sometimes release products that don’t fully appeal to customers.
7. Business model
(17%): Lacking a monetization strategy. Failing to find ways to scale.
8. Ineffective
marketing (14%): not understanding how to get one’s product into the
hands of the target market.
9. Not
customer-centric (14%): Many startups fail to obtain customer feedback
and act on it.
10. Poor timing
(13%): Airbnb’s success can be attributed to its impeccable timing, as it “came
out right during the height of the recession when people really needed extra
money.
Conclusion:
The ancillary innovation process satisfies the demand of the
scientific method by forcing the inventor to understand causation and disprove
the null hypothesis of failure. These
ideals describe the role of the ancillary innovator.
The ability to assemble a specific combination of diverse knowledge
assets deployed at the right time and the right place would not only mitigate
risk, but if properly measured, would be able to quantify the value of risk
mitigation in a tangible form that can be directly monetized.
It is essential that the time required to deploy ancillary innovation is vastly decreased from current methods, systems, and institutions. This is necessary in order to restore the natural and equitable intentions of the Patent system so that primary innovation can directly capitalize its own iterations.
The Ingenesist Project is deploying our Blockchain Based Ancillary Innovation solution to important projects and institutions in the US. By making intangible assets tangible, ancillary innovation can be readily monetized therefore restoring the sustainable balance between technological change and economic growth.
The Game of Zero was developed in order to populate the knowledge inventory. The purpose of GOZ is to introduce a constraint to Curiosumé which produces an equal amount of supply and demand for knowledge assets. The reason for this is to incentivise the formation of a market between and among knowledge asset holders.
(The Game of Zero (GOZ) is a subset of The Value Game (TVG) which may be found by searching this site.)
In order for a player to advance in a Value Game, the claims
that they make in forming their Curiosumé must be verified by another game
player and registered as a combined transaction record on the Knowledge
inventory.
In order to create a dynamic market of data, information, knowledge,
innovation and Wisdom, each player must register as both surplus and deficit knowledge
assets (teacher and students). A score
of surplus (what one knows) must be balanced by a score of deficit, (what one
wants to learn) in order for the player to create tokens.
Introduction: As the name suggests, game mechanics are employed to move the production forward. Incentives consist of a combination of intrinsic motivations as well as financial compensation. A knowledge inventory is expressed from an ontology that brings context to interactions. The two-way flow of information is expressed as a simple bell-curve distribution for states of knowledge ranging from teacher (+1,+2,+3 Sigmas) to student (-1,-2,-3 Sigmas).
The Game of Zero gets
its name from the only constraint that is applied: each participant MUST have a total score of ZERO.
Formation of
Knowledge Inventory:
Ontology is a difficult topic to address universally because
every company, institution, and every affinity group has their own specific
means and methods for defining themselves in terms of ontology.
Example: the following is the Wikipedia Ontology:
Generalized Knowledge Inventory:
Top Level Wikipedia Categories
-3s
-2s
-1s
+1s
+2s
+3s
General Reference
X
Culture and The Arts
X
Geography and Places
X
Health and Fitness
X
History and Events
X
Human Activity
X
Mathematics and Logic
X
Natural and Physical Sciences
X
People and Self
X
Philosophy and Thinking
X
Religion and Belief Systems
X
Society and Social Sciences
X
Technology and Applied Sciences
X
TOTAL = 0
-3
-6
-2
+4
+4
+3
Absolute Value = 22
Claim your
Intellectual Property:
Earn Power by claiming your IP blocks.
Increase your power by having each block
validated by another participant.
Surplus refers to knowledge that you offer to
others
Deficit refers to knowledge that you need from
others
Rank yourself as you fit among the community of
your peers
Positive and negative must balance at zero
Adjustments
can be made at any time
Important: Each of the above categories likewise have
sub categories for which the same constraint holds. Below those categories may exist many more for
which the constraint likewise holds.
Absolute Values in
each category may be analyzed as well for business intelligence. The combined knowledge inventory will
accumulate substantial value.
Implications for Merchandizing
platform:
The Game of Zero provides a way for the participants to
increase their “stake” in the system. By
accumulation of Absolute Value, the participant increases their likelihood of gaining
a more valuable position / winning a more valuable prize.
The network of participants can safely contact each other
based on mutual interests of validating knowledge and information. One buyer may want to alert other buyers of a
good product or service based on their unique identifiers.
There is no incentive to cheat – If I lie about my knowledge
inventory, this is the equivalent of spamming myself.
There is no incentive to troll because any claims that are
not validated by one or more participant of relevant profile can be ignored by
the system.
Playing the Game of Zero
Most applications require a user to become familiar with a
detailed set of rules that are necessary overhead for security (passwords),
Identity (KYC/AML), terms of use, rules of engagements, limits and levers,
means and methods, etc. Each requires a
mental investment on the player as well as a resource overhead on the
application.
Video games are taught with a simple objective and just
allowing the user to play at level 1.
Level 1 teaches the player the skills that they will need to be
successful at level 2, which likewise prepares the player for level 3 and so
forth.
The Knowledge Inventory: The Game of Zero requires
that a player complete a detailed profile in order to accumulate “stake” in the
community. The profile is anonymous which allows the player to use an avatar or
any name that they choose. They can change their name at any time. They can delete a profile and start again. They
can even maintain more than one profile. Each of these freedoms has
consequences at higher states of play, but at the beginning the player is
encouraged to experiment to find their place in the community. The system will allow them to do anything
that they want except violate the rule of zero.
The player will quickly realize that the game interacts with
them based on the inputs to their profile.
If they create a frivolous profile, they will get frivolous
results. If they provide meaningful
inputs, they will get meaningful results.
Once they realize how it works, they may abandon a profile at this early
stage and create a new one. Penalty for
this is that they will need to re-start the clock (like starting on square
one). This is not a big penalty at the
early stages, but at the later stages this will become a significant
deterrent.
The more stake that a player holds, the greater the payout
will be from the system. Payout may
exist in many forms from prizes to targeted economic opportunities such as gigs,
validations, contests, and paid product endorsements. The value of the economic opportunity
increases at higher states of play.
Higher States of Play
The Game of Zero forces that player to maintain a net state
of ZERO across the entire spectrum of ontology. At higher States of play the
players may also need to validate their claims in order to increase their
stake. If they claim to be a +2 Sigma
Computer programmer, they will need to find another +2 programmer to validate
their claim. If they balance their
expertise with a -3 sigma desire to learn the game of tennis, they will need to
validate their claim with a tennis partner.
Other scenarios are possible depending on market forces.
The process of claims and validations builds social
cohesion, community engagement, and value of the system. Failure to complete transactions or validate
claims limits the benefit of game play and may eventually upset the balance of
ZERO.
Each claim and validation becomes a permanent record cast in
time and cannot be altered without a corresponding counterclaim, or deletion of
the profile.
Network Effects
The next level of growth will include a transformation from
a strict e-commerce site to a networked platform. The following features will
be added.
Branding
Encourage communities to interact with each
other
Precision matching of “teachers” to “students”
drives value creation
Targeted incentives
Formation of affinity groups and buying pools
Managed by algorithm
If the system is trained to behave like a network, then a
simple valuation component will be reflected by the square of the number of
nodes multiplied by the quality of each interaction set equal to the current
linear valuations.
Management will then use this relationship to drive policy
that concentrates on two things: Increases the number of participants and
increasing the depth and breadth of engagement among the members.
Conclusion
How a Value Network
Works
In business and commerce, value networks are an example of an economic ecosystem. Each member relies on one another to foster growth and increase value. Value network members can consist of external members (e.g., customers) or internal members, such as research and development teams.
Value networks enhance innovation, social welfare, the environment, as well as many other areas. Weakness in one node can affect the entire network. For example, if a development team is weak, the production team has a harder time creating the product, which can leave a buyer waiting for their shipment.
History: The Game of Zero was first identified by the author in response to requirements for managing the Summer Intern program at The Boeing Company between the years 1998-2002. Later around 2005-2008 the system was studies for closing the knowledge gap at Boeing as well. The research showed great promise and some parts of the work have been applied by the company. Additional research and development was conducted through various companies and start-ups from 2008 until present. The Game of Zero was generalized from the Boeing Experiments in private follow-on research and development as described in Curiosumé and The Innovation Bank. Details of this history are outlined in the whitepaper.
Over the years we have identified several features of Curiosumé that every VC and “investor” wants to change – but these features are so fundamental to the operation of Curiosumé that to change them would render the application useless. More clinical, the Math falls apart.
On the other hand, this phenomenon serves as a very powerful test of human nature. Violating one or more of the six tenets represents the temptation of control and power over others – people who seek to exploit other people cannot resist this temptation and will shortcut or manipulate one of the following 6 tenets, thus guaranteeing failure. Those whose hearts are truly focused on empowering people can easily resist, and even thrive, in an environment of collaboration and inclusion, thus guaranteeing success.
The Six Tenets of Curiosumé
You are forewarned, each of these six tenets pass directly against the grain of traditional venture capital and investment systems making the work difficult to fund by traditional means:
1. 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 private database or to define the ontology because this is the most tangible form of control. In Curiosumé all data must reconcile upward to the single ontology owned by the commons. Investors will have a strong desire to own the ontology and privatize the database – we must resist this.
2. Non-competitive ranking system. Our culture is steeped in tradition of competition; war, sports, even evolution (survival of the fittest), etc – all purport the necessity of competition as a means of arriving at the best solution. It was very difficult to find a suitable rating systems that does not invoke some form of competitive hierarchy. But in reality, Nature exhibits many more examples of collaboration than competition, yet collaboration is not intuitive to the Capitalist psychology. We are not saying that competition is bad, it is just inefficient on a crowded planet. Instead, there should be a perfectly valid market for everyone. There will be a strong tendency for investors to rank people on a hierarchy – we must resist this.
3. Self-selecting: People must self-identify their participation in a community. That way, they cannot cheat because they would only be cheating themselves. There is a strong tendency to tell people what to do, how to behave, and how to appear to a “market”. We must avoid this. If we can eliminate the incentive to cheat, then we can avoid the crippling friction of a punitive vetting mechanism in our processes. There will be a strong desire by investors to have a means of punishing people who game the game. We must resist this. Instead, we need to develop a system that allows people to game the game to improve the game. This is where creativity and innovation will come from.
4. “Learn-collaborate-teach” scale. It is extremely important that people are ranked ONLY on units of learning, units of collaboration, and units of teaching. The reason is that students and teachers do not compete with each other. Besides, people who is unwilling to teach others in an organization are just as useless as people who are unwilling to learn new things. Nobody knows everything and everyone knows something that can be taught to someone else. Learners represent demand for knowledge, teachers represent supply of knowledge, and collaborators represent factors of production in our new proto-economy. There will always be a temptation to create winners by producing and abandoning “losers”, we must avoid this.
5. Anonymity until the point of transaction (AUPOT): There is no reason anyone needs to know your identity until there is a tangible transaction, then and only then you must show your cards. Lack of privacy is what makes Big Data both invasive and unreliable. People acting anonymously behave differently (for better or worse) than those whose identities are known. The intrinsic unbiased activity data has completely different meaning than biased, impulsed, or controlled behaviors. The utility of such data would inherently be more beneficial to markets and society. There will always be a strong desire from investors to own the one-way communication channel (advertising, propaganda, control, etc) where they may impose controls – we must resist this.
6. Formation of the Asset: An asset can only be described in terms of a Quantity and a Quality of something. 100 gallons of drinking water is a completely different asset than 100 gallons of irrigation water. “100 gallons of water” without specifying the qualities of the water is not an asset. Curiosumé a claim as a “quantity” and a validation as a “quality” as a means of formatting a knowledge asset. This is called a unit asset and represents a node in the network. Investors will often want the asset to be described in terms of money where the components are explicitly risk vs return. We must arrive there a different way.
Conclusion
We are open to any new ideas on how we would build the Curiosumé application. However, the 6 tenets discussed here are non-negotiable features of Curiosumé that must remain intact otherwise the whole project will fail. Each one of the tenets rubs against the grain of current VC models, corporate investment models, even academic commercialization models. Obviously, these 6 tenets have made funding for our programs difficult.
On the other hand, the reasons why nobody has copied us is because they would have the same problems in funding. Breaking this legacy funding mold will be absolutely essential to emergence of a new economic paradigm.
The WIKiD Tool algorithm provides a mathematical framework for analyzing dynamic data related to social interactions in a network and memorialized on a Blockchain. This example uses an analogy to the position / velocity / acceleration equations that some people may remember from their school days.
These types of relationships are important for measuring things like innovation. Ask any VC for a definition of Innovation and they’ll probably say “I’ll know it when I see it” or “it’s a good idea with an economic outcome”. Neither of these things are measurable until long after the innovation occurs which is not practical. However, if we could measure something that is closely related (correlates) with innovation, perhaps we could use that to measure the thing we can’t see.
A similar thing happens on Wall street – how do you measure consumer confidence? Financial analysts noticed that the price of some commodities track closely with consumer confidence so they use that as a proxy for the thing they cannot measure directly. This is called a derivative – something whose value is derived from the value of something else. Suppose we use the same idea to measure things like Wisdom, Innovation, Knowledge, Information, and Data (WIKiD)?
As engineers interact with each other to form transaction records, the blockchain records the chronological order of every event, so we can now correlate all events with respect to time. The connections that are made may be analyzed for both quantity and quality (magnitude and direction). We can now use common mathematical tools from finance and physics.
We have established that the blockchain records the time function for
all events to an immutable ledger. In order to represent vector
magnitude we’ll follow a well known analogy to the
displacement-velocity-acceleration formulas from physics and associated
Calculus.
WIKiD stands for:
(W) = Wisdom (I) = Innovation (K) = Knowledge (i) = information (D) = Data
Data: In general, we can define data as points
placed on such a coordinate system. Each point defines a position in
space and the time where an event is recorded. The distance between data
points can be called “displacement”, because of the relative distance
between the points. In the simplest sense, we can see that Data (D1) and Displacement (D2) share an analogy.
Information: When you draw a line connecting two points, or you draw a line approximating a cluster of points, the slope of that line on a graph provided information about the phenomenon under observation. Is it getting larger slowly? Is it getting smaller rapidly? In essence, the slope of the line represents the rate of change in displacement with respect to time and gives the observation its “velocity”.
This may be represented by the relationship simply stated as:
i = dD/dt
Information is proportional to the rate of change in the data with respect to time
It should be clear that we are defining ‘information’ as a derivative
of ‘data’. a derivative in physics is the same as a derivative in
finance, that is “something whose value is derived from the value of
something else” That said, we now proceed down the latter of
derivatives.
Knowledge: The analogy between velocity and
knowledge is intuitive. Knowledge is a phenomenon that may be modeled as
the derivative of ‘information’. Strictly speaking, the value of
knowledge is derived from the value of the information from which
knowledge was created. It is intuitive that one accumulates knowledge
over a long period of absorbing information and integral data. Education
is the process of absorbing information from a printed page or screen,
and combining that with other previously accumulated information to form
knowledge.
Hence, the following relationship holds and is simply stated as follows:
K = di/dt =d2D1/dt2
Knowledge is proportional to the rate of change of information with respect to time
Innovation: The analogy between acceleration and innovation is also intuitive but a little more difficult to put to words (that is why we use equations). Consider an child who is knowledgeable in riding a bicycle on pavement. Suppose that the child, for the first time, encounters sand on the pavement while also executing a sharp turn. During the ensuing deceleration, the child experiences a very high increase in knowledge about their environment within an extremely short period of time. In any case, the child is forced to innovate a solution. Likewise, the motocross racer is constantly innovating to adapt to the conditions of the track. You can read a book about riding bicycles, but none can adequately describe the moment when the child must create the experience anew.
For the fact of innovation, we provide the following relationship simply stated as follows:
I = dk/dt = d2i/dt2 =d3D/dt3
Innovation is proportional to the rate of change of knowledge with respect to time
Innovation Example: One of the gross errors that we make in business is due to the inability to differentiate an economic event from it’s constituent physical parts. The classic example is innovation; Venture Capitalists often describe innovation as a new idea that has an economic outcome. This is problematic because innovation is defined with one equation having two unknowns. This is mathematically impossible to solve, except by laborious and expensive iterations.
The rational (mathematical) approach would be to test and observe
high rates of change of knowledge in a community and use that as a proxy
to identify the presence of innovation (as defined above). After that,
the community may be tested for economic outcomes. Unfortunately,
I=dk/dt is not normally possible to observe in a hierarchical business
structure. However, when formatted and validated correctly, and applied
to a network organizational structure, then I=dk/dt can be represented
graphically and accurately identified even by a child.
Wisdom: When we think of wisdom, our minds conjure
the image of an elderly person with a lifetime of experiences behind
them. Somehow, our elders seem to be able to predict the outcome of a
series of actions before those actions take place. This is why we seek
wisdom to lead our organizations and institutions.
Consider the manager of a factory floor who has 30 years experience.
During those 30 years, they have seen many things succeed and many
things fail. In fact, their experience represent a statistically
significant sample of representative events that they have experienced
in the past. The wise manager is able to process new information with
old information to predict the probability that the new idea will yield
the desired results. The propensity for wisdom may be modeled as a time
function in a similar manner.
W = dI/dt = dK2/dt2 = d3i/dt3 = d4D/dt4
Wisdom is proportional to the rate of change of innovation with respect to time
In general we could say that Wisdom is the second derivative of
Knowledge and the fourth derivative of Data. Similarly, Innovation is
the first derivative of Knowledge and the second derivative of
information, and so on. In order to identify innovation, we would
measure high rates of change of knowledge. Wisdom would be proportional
to high rates of innovation, etc. The utility of these functions
should be apparent.
Conclusion
The WIKiD tools algorithm provides a set of relationships for what are now considered intangible assets that are integrated by a time function. The Blockchain provides the master schedule for the time function to be recorded, leaving us with a somewhat routine task of identifying rates of change in observable events.
Modern platforms such as Google, Facebook, AirBnB, and others enjoy astronomical market valuations despite having comparatively less hard assets as legacy firms like Marriot, Boeing, T-Mobile, or Walmart. The difference may have something to do with their organizational structure.
Hierarchy: Since the dawn of the industrial revolution, centralized organizations comprised of multiple levels of management have been the proven means for allocating resources and minimizing risk. The value of such a construct is expressed in terms of market demand and sensitivity to risk as expressed by the Capital Asset Pricing Model (CAPM).
E(Ri) = Rf + Bi (E(Rm)-Rf)
Where:
E(Ri) = Expected rate of return on capital amount Rf = Risk free rate of return Bi = Sensitivity to market volatility (E(Rm) = Expected market return
The CAPM valuation model for an organization is dominated by market
risk multiplied by a firms sensitivity to market risk. CAPM valuations
are limited by market expectations and performance. CAPM is largely a
linear function except in the exclusive state where volatility is very
low and market returns are very high, such as monopoly or some duopoly
conditions.
Networks: A network is characterized by a collection of nodes (which may represent a switch, a computer, a sensor, or a person) and branches (wires, signals, instructions, or communications) connecting the nodes. The value of networks is a function of the total number of nodes and the total number of possible connections that can be completed between them multiplied by some coefficient of value for the quality of those connections.
Metcalfe’s law for Networks suggests that the theoretical value of a network will be proportional to the square of the number of nodes according to the following relationship.
Theoretical value is proportional to: n(n-1)/2
The Actual value would be related to the quality of the nodes, the
actual number of existing branches, and the net quality for the
transactions that transpire over the network. For example, the Value of
Facebook is estimated at:
VFacebook = (5.70 x 10-9) x n2
Where (n2) is the total number of users and (5.70 x 10-9), is an incredibly small number represents the average quantity and quality of nodes and branches between them. The Facebook platform objective is to maximize total number of connects AND maximize quantity AND quality of the interactions. For reference; MySpace still has 500M registered users giving it a valuable network, however, a low coefficient of interaction has eroded value of the platform substantially.
Self-regulation, fault-tolerance, and Management Autonomy
The network can make independent decisions: An engineer that is mis-allocated can quickly move closer to their area of interest and competence. Overlap between civil, mechanical, and electrical engineers can be managed appropriately. A corrupt engineer would have a very difficult time gaining access to a target without enduring a long and difficult road to establishing a transaction record that would permit sufficient isolation to the target to actually profit from the crime. It would be difficult to corrupt an engineer without knowing if they will be assigned to a target. It would be difficult to which engineer will be assigned to a potential target in advance of the attack. If an attack was attempted, it would be easy to identify who committed the crime. High impact targets may be covered with redundancy or a Byzantine proof. Obviously, Bots would be quickly and easily dispatched to the null condition.
Network Learning
Interactions between nodes will tend to optimize claims such that the value of the compensation received is proportional to the effort required to establish and verify a claim. This is a common practice in professional societies and certification bodies today. Further, strong professional communities with sufficient diversity, create conditions for rapidly and iterative teaching, learning, and collaboration leading to a high rates of innovation. Finally, professionals may reflect artistic or literary expertise or cite membership in multiple networks on their own valuation and the valuation of their team. Reflecting diverse interests from professional, recreational, and social opportunities will increase the individuals stake in the network and everyone’s stake in a team.
The Value of the Quantchain Network:
Economist Robert Solow received a nobel prize for his work in
estimating that 80% of economic growth can be attributed to
technological change. Said another way, for every 2 dollars spent on
engineering, society can expect 8 dollars returned to the economy. This
conveniently provided an average nodal value for engineers.
It is easy to count the number of engineers on the Quantchain,
therefore the only variable left is the ability to assess the value and
diversity of the interactions. Quantchain accomplishes this precise
objective in several ways:
The decentralization of engineers diversifies interactions
Dominant game strategy = cultivate a diverse community of claimants and validators approaching Dunbar Number.
The Percentile Search Engine assigns optimum probability vs. cost to all transactions.
Individual transactions and collective transactions are readily analyzed.
Engineering networks can be assembled and subdivided in any number of
ways and theoretical values may be assigned to them making the
valuation of teams, mergers of teams, divestiture of teams, or scenario
testing of any imaginable combination of teams, a quick and accurate
projection of network value.
The Value Game (TVG) is a new class of business methods where value is extracted from an asset, not by consuming the asset, rather, by preserving the asset. The process of preservation and maintenance is the substrate for the creation of social, creative, and intellectual capital in a community. TVG is a difficult thing to sustain in a legacy economic model, but may be quite efficient and profitable in the modern networked organizational structures enabled by decentralized adjudication, a decentralized ledger. and simple game mechanics.
To illustrate, we cite examples from on-line games collectively referred to a Fantasy Sports. Fantasy baseball for example is a game played by adapting real life game statistics to create hypothetical game scenarios using some randomization system such as a set of dice. Over time these games have become more sophisticated, computerized, and have spread to other sports, and now they are on-line. Today, fantasy sports are estimated to be a 2 billion dollar industry involving over 56 million people.
What if a “fantasy play” could be replicated given a set of validated statistics, in real life? How would the real world game actually turn out? This is not an uncommon thought. Many HR directors, corporate recruiters, and entrepreneurs dwell on this topic extensively: “How could we identify social capital, creative capital, and intellectual capital of people, given a set of market measures, and allocate them into a self-optimizing game to yield production and profit?”.
Building A Value Game
The Value Game starts by identifying any asset that a group of people may share.
The next step is to find 3 or more diverse communities that have a vested interest in preserving the asset rather than consuming the asset.
Each player acting in their own best interest will seek to play their expertise among the others as best as possible.
Any threats to the shared asset will be neutralized by the majority of players in a network.
The transactions between the diverse communities of people will “mine” social capital, creative capital, and intellectual capital into existence generating tokens in the process.
Individual transaction records will be memorialized on a blockchain under the control of the individual.
Validated transaction records may be transferable to other Value Games, blockchains, or tokens.
Example: A condominium is an arrangement of several individual owners (of living units) who all have individual talents. It is in the best interest of each that the building is well maintained, but none are necessarily qualified to manage and maintain a complex structure. Another community of nearby vendors such as restaurants, accountants, engineers, physicians, and employers have in their best interest that the condominium is maintained because the value of the units impacts the value of commerce – and the productivity of the residents is the primary source of revenue for vendors. It is also in the best interest of neighboring buildings, the school district, and the city tax pool, civil servants, etc., that the shared asset is maintained to optimize it’s value. Each player is aware of the impacts in the network based on the analysis of similar networks.
While malicious actors may be a symptom of illness, by actual attack vector is apathy and neglect. Gravity, weather, and deferred maintenance are constantly trying to reduce that condominium structure to lower state of value. Maintaining an asset creates value equal to the entropy of the system plus asset appreciation due to the creation of social, creative, and intellectual capital.
The Value Game would form a cryptographic token that may be exchanged among the parties in whose best interest it is to preserve an asset rather than to consume the asset. This is done in many forms today – a restaurant may offer a coupon to residents for a lunch special. A physician may locate close and rely on referral instead of advertising. An trades person saving time and travel expenses may pass that on to local community. When a drug dealer comes to town, they are quickly identified and excised from the community by the community.
Almost any shared asset may be used to form a value game.
A residential or commercial building
A Corporation
A car, airplane, or other transportation asset
Land for farming, mining, or urban forest
Water, food, and energy
Engineers, Doctors, Civil Servants
Educators, mentors, apprentices
Laborers, Maintainers, cleaners
Planet Earth
New Value Entrepreneur
The objective of the New Value Entrepreneur will be to organize three or more communities to interact around a shared asset where the interactions among these communities act to preserve the asset rather than consume the asset. As people interact with each other, they teach, learn, and iterate with each other. This activity manufactures social capital, creative capital, and intellectual capital memorialized by transaction records represented by the community token.
In general, once a value game is started, it will improve itself. All players will eventually find and play roles in Value Games that correspond most closely to their natural interest and passions and therefore maximize their personal value.
After about 4 years of not posting to this site, I have decided to return to the original ideas that resulted in so much innovation in this space. For a quick review, the term “Ingenesist” is derived from the Latin word for Engineer – A Maker of Useful Things.
The TIP archives found here include almost 600 blog posts (site map) approaching 1/2 million words. You’ll find the original thesis for the international mobility of engineers under NAFTA between US, Canada, and Mexico. That project involved 6 universities, the California Board of Professional Engineers, The National Council of Examiners for Engineers and Surveyors, and the National Society of Professional Engineers – and with the cooperation and support of CETYS University, the Baja California State Government, and over 250 Engineers from Mexico who presented the US Engineering Board exams.
That work was further developed at the Boeing Commercial Aircraft Company and published at the Boeing Technical Excellence series of conferences by their Technical Fellowship. From this effort, TIP developed The Innovation Bank that would match most worthy knowledge surplus to most worthy knowledge deficit to form an internal market (network) for knowledge transfer. That work is memorialized in an old 2007 Patent Application
Later, TIP co-founded Social Flights – a ride sharing service for private jets. The innovation was our ability to predict most likely passengers and match them with most likely seats available on private aircraft. Supply and demand were both dynamic. Keep in mind that this was before Uber and we were acting within a highly regulated industry. Ultimately Social Flights was acquired.
TIP developed three key innovations:
The Value Game: An economic game where multiple self-interested agents must share a common asset. Their motivation and incentive would be to preserve the asset rather than consume the asset. This was supposed to simulate a sustainable economy such as what is desperately needed for our planet. The Value Game originated at Boeing and was tested with Social Flights and successfully deployed in several remodeling projects for condominium associations (shares asset communities)
The WIKiD Tools Algorithm. WIKiD Tools creates a mathematical relationship between (viewed backwards) Data, information, Knowledge, Innovation, and Wisdom. WIKiD tools is useful when you can’t measure something like innovation directly, you could measure a derivative such as the “rate of change in knowledge” as a proxy. In this way,the richness of Wisdom, Information, Knowledge, information, and Data can be more predictable.
Curiosumé is a combination of the words Curate and Resumé. The idea behind curiosumé is to convert the CV or Resumé to a form of code that can be overlaid on other information databases such as Wikipedia, Amazon ontology, even the Library of Congress. This allows us to measure intangible assets as they act in a community.
Then Came Blockchain:
We stopped publishing to The Ingenesist Project in 2016 in order to apply TIP innovations to emerging technologies such as Social Media, Blockchain, AI, etc. It appeared that the decentralization of the engineering profession would be an important step in achieving the original goals of sustainable global enterprise. During this time, I also started a small engineering consulting firm called CoEngineers, PLLC that served a traditional local market bringing engineering services to a retail clientele. CoEngineers, PLLC helped pay the bills while also serving as a sandbox for testing and developing TIP Innovations. Our first entry into blockchain was the creation of a token called Quant on the BitShares Blockchain.
SIBOS, NSPE Task Force, and National Association of Insurance Commisioners: Collectively each of these organizations represent the Banking Industry, The Insurance Industry, and the Engineering Profession. TIP published 3 whitepapers that became the basis for the next iteration. It was noted that each of these industries trade an invisible currency called Risk. It was found that TIP methodologies were better described by actuarial math (probabilities) rather than interest laden monetary metrics. This 3-way association became the genesis of the Insurance / Engineering Blockchain Consortium. This was later changed to the Integrated Engineering Blockchain Consortium or IEBC.
IEBC: Over the course of several years, IEBC was the umbrella organization for 150 engineers, scientists, and business persons who advanced the idea of a decentralized engineering network to mesh with the banking and insurance environments. IEBC published numerous seminal documents and spoke at dozens of industry conferences. The two main achievements were to publish a whitepaper with detailed specifications for a blockchain strategy that would accommodate all prior TIP innovations. The IEBC team built a prototype blockchain by cloning an existing successful chain and modifying it to suit MVP demonstration. IEBC ultimately ramped down for lack of funding. But everything we learned is now open for iteration.
Where to re-Start? TIP has always been a place where ideas are formed and implemented either by ourselves or by others. Many TIP Ideas survive to this day in the many hundreds of engineers and scientists who have participated in the conversations, the start-ups, the publications, lectures, and webinars over the last 15-20 years. We can see many past TIP contributors advancing in their careers, businesses, and leadership roles.
There is something that binds people to this network – it has to do with the underlying belief that Makers Of Useful Things are the cause, not the effect, of sound and sustainable economic activity. The flaw of market capitalism has the world operating in a mirror image of the economy that was supposed to happen. The solution is more about perception than it is about revolution.
The value of engineering is perhaps the greatest arbitrage opportunity in history. After 100 years of regulated professional engineering practice, engineering is still valued on a linear time and materials basis. In the Internet age, where everything and everyone is connected by engineering, I argue that the value of engineering may be accounted by the exponential Network Effect.
For example, many social networks such as Facebook or Google enjoy corporate valuation in accordance with Metcalfe’s law which states that the value of a network is proportional to the square of the number of nodes in the network. Facebook, Linkedin, Google, etc., are simply a platform upon which participants reflect value through their interaction with each other. The real physical value of those interactions is projected upon the virtual value of the platform. This is significant.
This condition may be mirrored with engineering infrastructure, such as a bridge or a building. The physical value of the bridge is accounted for in a linear time and materials, but the network value of the bridge is proportional to the exponential number of connections that people make in using the bridge. The difference between the two quantities represents an arbitrage opportunity whose value would be easily measured into existence by a clever cryptocurrency.
This analysis can be extended to nearly all works of engineering from renewable energy facilities, clean water installation, transportation systems, and all buildings, etc. The Network Effect also applies to the security, fault tolerance, transparency, and reliability of a network as well – each reflect additional layers of engineering proof of work.
Today, the value associated with the network effect of infrastructure engineering is unaccounted for – it does not exist on any balance sheet yet it is widely distributed in society. For example, doctors have hospitals, manufacturers have machinery, bankers have assets to finance, insurers have accidents to underwrite – none could exist without the network effect of engineering.
The World’s First Intrinsic Cryptocurrency
The purpose of Quant is to measure the network value of engineering into existence with a digital currency. Such a currency would represent the intrinsic value of all people who interact with works of engineering. A currency that accounts for intrinsic value will quickly achieve a generalized reciprocity among a community of beneficiaries who will then readily trade in that currency.
Much like Amazon.com started as a bookseller, Quant will start with infrastructure engineering. This initial transition step is essential to achieve initial reciprocity of the digital currency. The interface will be at the adjudication of smart construction contracts upon which banking and insurance depend to capitalize and underwrite the works. Once this point of entry is established, additional layers of infrastructure can be added eventually capturing the true value of every human being that contributes their productivity to the network.
The consortia being promoted by The Ingenesist Project between engineering and insurance will be a critical component in establishing this base layer of intrinsics. We have compiled a group of founders and visionaries that can bring this idea into a practical blockchain protocol. Would you consider joining us?
The value of engineering is perhaps the greatest arbitrage opportunity in history. After 100 years of regulated professional engineering practice, engineering is still valued on a linear time and materials basis. In the Internet age, where everything and everyone is connected by engineering, I argue that the value of engineering may be accounted by the exponential Network Effect.
