Tag: blockchain

The Mechanics of Blockchains

On September 13, 2016

rubrik-fridge The Mechaics of Blockchains

Blockchain technology is like a three-trick pony. It essentially combines three slightly clumsy computer tricks to mimic decisions that a human administrator routinely makes. The difference is that, if done correctly, the computer can perform some of these decisions with great speed, accuracy and scalability. The peril is that, if done incorrectly, the computer can propagate an incorrect outcome with the same stunning efficiency.

1: The Byzantine General’s Dilemma

A scenario first described in 1982 at SRI International models the first trick. This problem simulation refers to a hypothetical group of military generals, each commanding a portion of the Byzantine Army, who have encircled a city that they intend to conquer. They have determined that: 1. They all must attack together, or 2. They all must retreat together. Any other combination would result in annihilation.

The problem is complicated by two conditions: 1. There may be one or more traitors among the leadership, 2. The messengers carrying the votes about whether to attack or retreat are subject to being intercepted. So, for instance, a traitorous general could send a tie-breaking vote in favor of attack to those who support the attack, and a no vote to those who support a retreat, intentionally causing disunity and a rout.

See also: Can Blockchains Be Insured?

A Byzantine Fault Tolerant system may be achieved with a simple test for unanimity. After the vote is called, each general then “votes on the vote,” verifying that their own vote was registered correctly. The second vote must be unanimous. Any other outcome would trigger a default order to retreat.

Modern examples of Byzantine Fault Tolerant Systems:

The analogy for networks is that computers are the generals and the instruction “packet” is the messenger. To secure the general is to secure the system. Similar strategies are commonplace in engineering applications from aircraft to robotics to any autonomous vehicle where computers vote, and then “vote on the vote.” The Boeing 777 and 787 use byzantine proof algorithms that convert environmental data to movements of, say, a flight control surface. Each is clearly insurable in a highly regulated industry of commercial aviation. So this is good news for blockchains.

2: Multi-Key Cryptography

While the Byzantine Fault Tolerant strategy is useful for securing the nodes in a network (the generals), multi-key cryptography is for securing the packets of information that they exchange. On a decentralized ledger, it is important that the people who are authorized to access information and the people who are authorized to send the information are secured. It is also important that the information cannot be tampered with in transit. Society now expends a great deal of energy in bureaucratic systems that perform these essential functions to prevent theft, fraud, spoofing and malicious attacks. Trick #2 allows this to be done with software.

Assume for a moment that a cryptographic key is like any typical key for opening locks. The computer can fabricate sets of keys that recognize each other. Each party to the transaction has a public key and a private key. The public key may be widely distributed because it is indiscernible by anyone without the related private key.

Suppose that Alice has a secret to share with Bob. She can put the secret in a little digital vault and seal it using her private key + Bob’s public key. She then sends the package to Bob over email. Bob can open the packet with his private key + Alice’s public key. This ensures that the sender and receiver are both authorized and that the package is secured during transit.

3: The Time Keeper

Einstein once said, the only reason for time is so that everything doesn’t happen at once. There are several ways to establish order in a set of data. The first is for everyone to synchronize their clocks relative to Greenwich, England, and embed each and every package with dates of creation, access records, revisions, dates of exchange, etc. Then we must try to manage these individual positions, revisions and copies moving through digital space and time.

The other way is to create a moving background (like in the old TV cartoons) and indelibly attach the contracts as the background passes by. To corrupt one package, you would need to hijack the whole train. The theory is that it would be prohibitively expensive, far in excess of the value of the single package, to do so.

Computer software of the blockchain performs the following routine to accomplish the effective equivalent process: Consider for a moment a long line of bank vaults. Inside each vault is the key or combination to the vault immediately to the right. There are only two rules: 1. Each key can only be used once, and 2. No two vaults can be open at the same time. Acting this out physically is a bit of a chore, but security is assured, and there is no way to go backwards to corrupt the earlier frames. The only question now is: Who is going to perform this chore for the benefit of everyone else, and why?

Finally, here is why the coin is valuable

There are several ways to push this train along. Bitcoin uses something called a proof-of-work algorithm. Rather than hiding the combinations inside each vault, a bunch of computers in a worldwide network all compete to guess the combination to the lock by solving a puzzle that is difficult to crack but easy to verify. It’s like solving a Rubik Cube; the task is hard to do, but everyone can easily see a solution – that is sufficient proof that work has been done and therefore the solved block is unique and valid, thereby establishing consensus.

Whoever solves the puzzle is awarded electronic tokens called bitcoin (with a lower case b). This is sort of like those little blue ticket that kids get at the arcade and can be exchanged for fun prizes on the way out. These bitcoins simply act as an incentive for people to run computers that solve puzzles that keep the train rolling.

Bitcoins (all crypto currencies) MUST have value, because, if they did not, their respective blockchain would stop cold.

A stalled blockchain would be the crypto-currency equivalent of bankruptcy. This may account for some amount of hype-fueled speculation surrounding the value of such digital tokens. Not surprisingly, the higher the price, the better the blockchain operates.

While all of this seems a bit confusing, keep in mind that we are describing the thought patterns of a computer, not necessarily a human.

The important thing is that we can analyze the mathematics. From an insurability standpoint, most of the essential ingredients needed to offer blockchain-related insurance products exist as follows.

1. The insurer can identify the risk exposures associated with generals, traitors, locks, vaults, trains and puzzles.

2. The insurer can calculate probability of failure by observing:

The degree of Byzantine fault tolerance.
The strength of the cryptography
The relative value of the coins (digital tokens)

3. The consequences of failure are readily foreseeable by traditional accounting where the physical nature of the value can be assessed, such as a legal contract.

We can therefore conclude that each of the tricks performed by this fine little pony are individually insurable. Therefore, the whole rodeo is also insurable if, and only if, full transparency is provided to all stakeholders and the contract has physical implications.

Markets are most efficient when everyone has equal access to information – the same is essential for blockchains. So much so that any effort to control decentralized networks may, in fact, render the whole blockchain uninsurable. It is fundamentally important that the insurer is vigilant toward the mechanics of the blockchain enterprise that they seek to insure, especially where attempting to apply blockchain to its own internal processes.

Adapted from: Insurance: The Highest and Best Use of Blockchain Technology, July 2016 National Center for Insurance Policy and Research/National Association of Insurance Commissioners Newsletter: http://www.naic.org/cipr_newsletter_archive/vol19_blockchain.pdf

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Are Blockchains Insurable?

By Admin

On August 3, 2016

In General Information

home-fire Are blockchains insurable? This question was posed to us as a topic for presentation by the Center of Insurance Policy and Research, a research arm of the National Association of Insurance Commissioners (CIPR / NAIC)

The trigger appears to be that some insurance companies are being asked to insure the business operations of blockchain enterprises. This same concern would apply to legacy business operations that may choose to deploy a blockchain – basically, a shared database managed by software. If one listens to the blockchain activists, this could basically apply to everyone in the near future.

The Ingenesist Project volunteered the following opinion to the question; Are Blockchains Insurable? The article was published in the July 2016 CIPR Journal

Article available here

This article is comprehensive and staggering in its implications. It begins by shaping the given landscape of finance and entrepreneurship in terms of insurability. It follows with, in essence, a mathematical proof that arrives at a conclusion that blockchains are insurable, but business processes using blockchains may not be. Luckily, the technology offers sufficient mathematical underpinning to calculate and adequately pool risk exposures of its components. However, the trouble arises where digital assets can neither be treated as money nor property. This extralegal condition may exist which would be categorically non-insurable in mainstream finance.

“Extralegal” refers to a condition in which something is neither legal nor illegal. Economist Hernando De Soto writes about how the extralegal sector in many parts of the world grossly inhibits economic growth because people are unable to secure “title” to property and businesses that they create. They are unable to bridge the capitalization gap – that is, the ability to borrow “money” against tangible assets or future returns.

Blockchain technology appears to be languishing in the extralegal domain as courts and governments have little uniform ideas about how and where this tech fits in society. That is, until something goes wrong like a major hack where important people lose a lot of money. Then some patchwork of blanket legislation will likely emerge to favor those of one sector over another. The running joke in crypto-space is that any effort to control blockchain technology would negate any benefits of having it in the first place.

There is a third option.

This article raises the possibility that the pairing of blockchain tech with professional engineers (as the decentralized adjudicators of smart contracts) would achieve a state of insurability and thus bridge the capitalization gap required for mainstream financing of blockchain enterprise. This arrangement applies primarily to basic infrastructure and derivatives of basic infrastructure which may not actually be a bad thing at all.

On a critical path.

The Earth is an epic case study in deferred maintenance. There are very real and serious global problems that impact every living creature on Earth that we need to attend to immediately. Critical path methodology is a technique familiar to all builders as a set of instructions specifying where one action must precede the next in order for subsequent actions to occur. Millions of business plans that provide basic human needs and protect our natural resources, and that are currently unprofitable, will suddenly become hugely profitable.

These outcomes could be accomplished with the recommendations provided within. Please read this article and forward it to others who are interested in this technology. There is very real money to be made in the next economic paradigm that is currently at our fingertips.

Article available here

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The Highest and Best Use for Blockchain Technology

By Admin

On May 14, 2016

In General Information

The hallmark of a great society is the ability to capitalize it’s needs, not it’s arbitrage opportunities. The Highest and Best Use for Blockchain Technology must be to reduce the cost of capital by decentralizing risk, not necessarily money…yet

Blockchain technology carries a promise of great opportunity, efficiency, and fairness in business operations and governance for an entire struggling planet. If that is true, then Blockchain technology should be integrated broadly and uniformly across society and within as many existing institutions as possible. If that is true, then Blockchain development should not be the exclusive domain of a single sector, such as banking. Nor should Blockchain development reflect priorities of highest ROI from VC start-ups. Likewise, purely Decentralized Autonomous Organizations (DAOs) may carry the risk of operating in an extralegal sector without legal recourse, thereby increasing net volatility, not decreasing it.

A different track is required.

The primary objective of Blockchain technology must be to reduce the cost of capital by decentralizing risk, not necessarily money. The highest and best use for blockchain technology is therefore insurance, not necessarily banking. In doing so, blockchain innovation can then be applied broadly, evenly, and intentionally across the economy. This makes sense because when building anything complex or important, one logical piece needs to go in front of the next logical piece regardless of it’s individual ROI, because the collective ROI is the true basis of valuation. If people tried to build an airplane in the same manner we are now trying to build decentralized economics, a few may benefit, but an air transportation system, as a whole, would be tragically constrained.

We have seen this before.

Many of the issues currently propping up the narrative to the Blockchain phenomenon were also present during the time of this author’s participation in the NAFTA negotiations. Anyone who was around in the early 1990’s may remember the mantra of modern globalization was that decentralized markets were good and centralized markets were bad. The mathematics supporting the efficiency of free trade models such as the Theory of Comparative Advantage were, and still are, bullet proof. So what happened?

Unfortunately, decentralized markets were administered unevenly, disproportionately, and only partially insurable, at best. The act of trying to control a decentralized market eliminated many of the benefits of having one. Today, we face a similar peril, except we are playing with a far more powerful technology promising exponential efficiency, or exponential deficiency. Don’t let the pundits fool you. It can go either way.

The difference today is that we also have the knowledge, foresight, a technological tool kit, and profound responsibility to get it right this time.

Let’s begin.

The place to start developing blockchain technology is through a consortium of Insurance and Professional Engineering institutions for the creation of relevant infrastructure and the physical derivatives upon which everyone utterly depends. This includes renewable energy, clean air, safe water, transportation systems, health and welfare, housing, building systems, computer networks, etc. After all, bitcoins aren’t worth a whole lot when the power goes down.

Infrastructure projects, and all their beneficiary derivatives, require financial institutions that can bridge the capitalization gap between the inception of a project and revenue from the project. This period of time is rife with peril because the “money and title” precedes the delivery of the physical asset. The cost of capital is directly proportional to the risk associated with project delivery. Wherever the insurance industry is capable of pooling project risks, the cost of capital will fall precipitously. The insurance industry is therefore an imperative component to this objective. Banking is relatively simple, accounts can be cleared with a placeholder currency; a token, if you will.

Herein lie both the challenge and the opportunity facing Insurance and Engineering institutions related to Blockchain Technology:

First, as with all new technology, we need to recognize that society will reorganize itself around Blockchain Technology. We need to provide hundreds of millions of entrepreneurs and citizens the support systems with which to do so.

Second, if each component part of the blockchain system is insurable, so too should the entire system. We need to insure and reinsure each individual components of a blockchain business system(s) in order to lower its cost of capital.

Finally, once insurable, each component part of the new economy will have the same cost of capital as any other part. The relative value of an investment will therefore be ordered in time — the most important and valuable piece is the one that goes next in the critical path. This is how things get built.

Taken together, Insurance and Engineering are sufficiently disintermediated from short-term objectives and are ideally suited for the long game. Together, they can bridge the capitalization gap upon which everyone can then cross. They provide outcomes in the physical world that are essential to everyone. Together, they can deliver the projects that are most important — the ones that come next as we navigate our critical path into the future.

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Identity Verification On Blockchain

By Admin

On January 5, 2016

In General Information

This Panel was formed at the Future of Money and Technology Summit in San Francisco on December 5, 2015 to unpack the issue of Identity verification on Blockchain. One of the most powerful components of blockchain technology is the equal ability to disintermediate a person’s identity from their data, as to associate identity with a dataset. During this panel of experts, the lines were clearly formed around the notion of who “controls” identity and whether anonymity is considered as valid a form of identity in a transaction as full disclosure.

Dan Robles, PE – The Ingenesist Project (moderator),
Tim Swanson – R3
Paige Peterson – MaidSafe,
David Birch – Consult Hyperion,
Joyce Kim – Stellar.org

Background:

There can be no blockchain banking without verification of identity on blockchain. While this may seem like an invasive requirement, it may also be considered a liberating requirement. Billions of people are “unbanked” and cannot hold assets because there is no way to identify who owns what. Where blockchain makes banking available to more people, so too must identity be verifiable among those people.

Even in the developed world, identity is deeply flawed. Why would I need to show a driver’s license with address and driving record just to prove that I am old enough to buy a beer, or receive a senior’s discount at the movie theater? Why can’t a person simply prove age, or prove driving ability, or prove residence, or identify any facet of trade without also revealing every other facet? It is often such matters of identifications that can best secure privacy.

This brings to question who would maintain, manage, and / or control identifications. Would it be a fully decentralized system or would it be a permissioned database system? Would the identity institution be a bank or a private corporation, or a government or a decentralized organization?

Finally, what is the core objective of an identity system? Will it project the ability to access something? Would it quantify and qualify the potential to produce something? Does identity pertain equally to the object of commerce and the objective of commerce? To what degree does the security of identity impact the durability of ownership?

Blockchain technology and those who seek to apply it are all encountering the identity issue. From Banks trying to comply with KYC/AML to engineering societies trying to identify the right knowledge assets to solve a particular problem, the question of identity management is a paramount consideration. These are exciting times because the subject is so new. Please sit back and enjoy this rare opportunity for such a diverse panel of experts to drill into an important subject that impacts us all.

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Zertify Zillow Zestimates On Blockchain

By Admin

On December 9, 2015

In General Information

Big Problem with Zillow Zestimates:

Perhaps the best example of metadata being imposed upon an unwary public is the “Zillow Zestimate”. Zillow.com is a real estate website that aggregates public information and boldly publishes the value of your personal property while quietly disclaiming that invalidity of their own valuation. In all fairness, RedFin.com and Trulia.com also provide similarly structured valuations of your most valuable asset with no physical verification. The slightest misrepresentation could cost the homeowner tens of thousands of dollars for which there is absolutely no recourse.

According to Homevisor.com: if your house (or a house you are looking to buy) has a Zestimate of $300,000 – there is almost a 25% chance that the house will sell for less than $240,000 or more than $360,000. That is a pretty wide margin of error.

There must be a way to Zertify Zilliow Zestimates on blockchain

Implications:

The result is that responsible homeowners who have conscientiously maintained and improved their property at great expense of time and money may be punished in a market while those who neglected their properties may be overly rewarded. Neither the buyer nor the seller has any way of inspecting comparable homes used by Zillow. This causes market distortion that affects the buyer, the seller, and the community at large.

Root Cause:

Zillow, Trulia, and RedFin all scan from public data sources. The problem is that there is no trusted public ledger where owners can register valuable improvements and amenities that may dramatically impact the value – and which lower the risk of owning a particular property. If such a trusted ledger did exist, it is certain that data scrapers such as Zillow, Trulia, and RedFin would be happy to scrape the data at no marginal cost.

Solution:

An organization such as the National Society of Professional Engineers has sufficient authority to provide a blockchain based ledger where a licensed professional engineer could physically review major components of a property including structural, plumbing, electrical, envelope, energy efficiency, HVAC, Solar Installations, mold, corrosion, critical slope, tree liabilities, view amenities, etc., and formulate an annual cost of ownership statement (ACOS) over a standard period of time. The licensed engineer will register the ACOS, along with recent remodeling permits filed with the city, on the NSPE blockchain where it may be accessed by Zillow, Redfin, Trulia, MLS, banks, insurance, and the public, etc.

Value Proposition:

The ACOS and the Professional Engineering condition assessment could be provided to owners for a flat fee or subscription fee with a ROI greater than 10:1. This means that viability threshold for engineering assessment is defined as adding more than 10,000 dollars to the average sales price of the property for every 1000 dollars that the homeowner spends on the engineering report. Owners that don’t meet this minimum threshold would not benefit from an ACOS and could not be listed on the NSPE Registry.

Size of market:

Assuming that there are about 100 million private homes in the US. The percentage of under-valued homes that would benefit from a 10:1 PE registry are characterized at over +1 standard deviation on a bell curve distribution and higher. This is roughly equivalent to 14% of 100 million, or approximately 14 million properties. If each of those spends a minimum of $1000 dollars for assessments, the value of the market would exceed $1.4B dollars. According to Homevisor.com estimates, the market would bear an engineering cost of $6000 yielding a $60,000 ROI, or roughly a $10B dollar market.

Conclusion:

Such a blockchain would safeguard the health and welfare of people and property while increasing the visibility of professional engineers as a public financial institution with real financial impact. The NSPE data would reduce volatility in banking and insurance ledgers so that pricing becomes more efficient. Real Estate professionals, renovation contractors, and real estate appraisers would also benefit from the registry by delivering the right product to the right client at the right time. It will increase the demand for a retail professional engineering sector to defend the technical best interest of society. It will signal high integrity rather than low integrity to the preventive maintenance market. Most importantly, the homeowners who maintain their property and those who will buy those properties benefit from fair market assessment of property values at a far greater utility than the typical point-of-sale home inspection.

Notes:

The ideas presented here are the sole creation of the author and not meant to reflect the intentions or interests of the National Society of Professional Engineers, Zillow, or any other referenced entity.
Zertify takes its name from a portmanteau between the word certify and the statistical z-test https://en.wikipedia.org/wiki/Z-test

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Municipal Governance On The Blockchain

By Admin

On October 13, 2015

In General Information

As a member of the City of Edmonds Planning Board, I hear a lot about what the public wants and what they do not want from their local government. As a seaside town, property values can be greatly impacted by water and mountain views. As such, there is an incentive to remove trees blocking views. In other parts of town, the urban forest is extremely beautiful and there is great incentive to preserve trees from high density developers. So what happens when a town wants to regulate trees? In our case, it was NOT an Edmonds kind of day. Perhaps it’s time to try municipal governance on the blockchain.

Problem:

Many municipalities are adopting laws which may restrict the cutting of trees on private property in response to factors such as canopy loss, erosion control, wildlife protection, urban forest management, development, view amenities, climate change, etc.; or to enhance tree cutting to make way for new development and associated tax dollars. However, most models for tree regulation are unpopular with their imposing fines, permit fees, high density development, and government regulation on private property. Yet, these fines and permit fees are required to fund a bloated top-heavy tree code in the first place!!

Proposal:

Incorporate cryptographic and/or block chain technology to create a web-based public ledger and tree inventory that everyone can see and anyone can audit. By adding simple gamification features, the tree code may become self-regulating as players interact with the game. This may minimize government involvement, except in the most exceptional circumstances.

Discussion:

Think of it like a huge public accounting ledger that everyone can see, but can only edit their own data. Instead of accounting for money, the ledger accounts for trees. The game starts when a property owner registers his or her own trees on the ledger. The city will issue cryptocurrency based on the number of tree units the property owner claims. These tokens would go into an electronic wallet on a blockchain associated with the property parcel number. Each year, the resident will be issued more tokens by the city as their trees grow – the value of the tokens is derived from climate data or LIDAR surveys. Some years may increase token values, some years may decrease token value based on estimated growth rates.

When a person wants to cut down a tree, they need to spend tokens to do so. Ideally, A property owner would not cut down more than they can grow. If they don’t have enough tokens, then they need to buy them from adjoining neighbors who are also trying to grow more than they must lose. If trading is restricted to adjoining properties (not commoditized like carbon credits), then community actions must be agreed upon by neighbors to settle any difficult situations.

The city would rarely get involved except to peg the value of the tokens on climate data. Algorithms programmed into the public ledger would manage the token values and electronic wallet exchanges automatically.

Shifts incentives

This sounds innocent enough. But in reality, it changes all of the incentives that we are now attempting to manage with convoluted linear rules and imposing government regulations on private property.

For example,

It rewards tree preservation.
It rewards early and active registration,
It is self-enforcing because neighbors have a vested interest, and the ledger is public.
It is self-governing because neighbors need to agree on price.
It is self-limiting – an area cannot get rapidly stripped without progressive costs.
If a developer tries to take out a lot of trees, the neighbors can make it very expensive to do so – or negotiate concessions, etc.
If an arborist is needed, then the business case exists to hire one.
The municipality is able to referee disputes and establish coin allocations based on canopy quota or weather conditions, etc.
It provides tree liability (or asset) disclosure at property sale.

Business case

Today, proposed tree code regulations expose the citizens to cutting fees as high as $1000 dollars per tree. Violations for unauthorized cutting can approach $3000 dollars per tree. This money is required to fund a tree department that may consist of up to 3 arborists (for a small seaside town in Washington state; pop. 50,000), a permit reviewer, an enforcement arm, and possible court challenges. It could cost a million dollars per year to have an effective tree code for a city under 100,000 people, or 10 dollars per person per year just to regulate.

A price point of 1 dollar per citizen per year would therefore not be an extraordinary amount of money for a city to resolve a difficult social problem with modern technology. Several thousand small cities dot the American coastline making this a strong candidate for private entrepreneurial partnership simply to maintain and audit the public ledger.

Conclusion:

A new generation of web applications and cryptographic technologies would allow this activity to happen autonomously. No new labor is required. No regulators are needed, no special penalties or enforcement mechanisms are required. The city can stay out of the private property tree business completely.

Technically, this is called a multi-agent algorithmic game on a decentralized autonomous platform. The difference is that today, these things can be made to look and feel like a game that is fun to play – people may play it. How many other Municipal Governance functions can be self-governed on a blockchain such as motor vehicles, animal control, gun control, schools, parking, water rights, energy, executive power, or any intrinsically valuable shared community asset.

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Gun Control On The Blockchain

By Admin

On October 6, 2015

In General Information

The following discussion related to Gun Control On The Blockchain is a thought-exercise only inspired by new and emerging technologies for decentralized self-governance and does not necessarily represent the opinion of the author. It is not intended to favor any single political position. it is not presented as a comprehensive solution to all scenarios. This article is intended to invite readers to imagine new approaches and constructs to resolve complex governance issues using blockchain technology on public ledgers.

Problem: According to some sources, 280,000 Americans have died from guns in the last decade. Even opponents of gun control acknowledge that there is a need to assure that a gun owner is qualified to operate each specific type of firearm that they possess. Even proponents of gun control acknowledge that registering a gun with a central authority (government, insurance, gun schools) constitutes a loss of civil liberty. Everyone knows that “blanket legislation” accomplishes little more than punishing a large number of responsible people in order to deter a relatively small number of irresponsible people.

Proposal: A person who seeks to acquire a gun may create an anonymous Curiosumé persona that includes their training, qualifications, mental health record, police record, and personal references from other qualified gun owners, etc. This anonymous information can then be encrypted and time stamped on a blockchain. Any changes in these conditions must be added to the persona by one-way edit. The identity of the persona remains on a private key held by the owner.

Gun dealers would be able to sell the level of armament commensurate with the threshold of competence evident by a quasi-anonymous persona. In the event of a disputed gun discharge, the actual identity of the person and their gun becomes known, therefore, their private key can be revealed without loss of civil liberty. If the gun owner’s persona is accurate, then they will be protected under the 2^nd amendment and receive an isolated incident judgment. If the person lied on their persona, they forfeit some protected under the 2^nd amendment and receive broad penalty and liabilities.

Alternate: Gun Owner Insurance:

Without revealing identity, the gun owner’s Curiosumé persona may act as a proxy identity for the person. The proxy would then be assigned to a risk sharing cooperative pool based on similar Curiosumé personas of the other people in the pool. The gun owner would pay insurance premiums commensurate with their persona – i.e., corresponding to the correct risk pool of their persona. In the event of a claim, the identity is unencrypted and revealed. If the person cheated on their premiums, they would not be covered. If they were truthful, they would be covered for accidental discharge.

Discussion:

Disciplined and experienced owners will pay a trivial amount for gun insurance while beginners would pay substantially more. This is an incentive to become educated in the rules of firearm ownership. If an individual has demonstrated severe shortcoming of responsibility, judgment, or prior convictions, then they will be pooled with others possessing the similar characteristics. As such, their insurance would be exponentially more expensive, perhaps prohibitive. Therefore, they would need to pay more to own a gun and or complete a rehabilitation program. The market will reach a new equilibrium of relative safety.

This type of arrangement applying a Curiosumé layer to a blockchain effectively preserves the identity of the gun owner while also providing essential data to a public ledger that may be assessed by gun dealers, gun trainers, insurance companies, mental health professionals, personal references, legislators, and the public at large.

Again, in the event of a shooting, the gun owner and their gun are discovered anyway, therefore privacy no longer exists. Only at that time may the public ledger be reviewed. There is a negative incentive for all people in the chain of possession in a community to allow an unstable person to possess a gun.

In the event of a worst case scenario intended by our founding fathers requiring for a protection by a trained citizen militia, then the blockchain can be shut down until such civil order is restored.

The Curiosumé layer on a blockchain satisfies the 2nd amendment on all points while protecting the public by filtering incompetent owners without punishing competent owners through fair market forces.

***

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Introducing Intrinsic Coin

By Admin

On August 15, 2015

In General Information

From Wiktionary: INTRINSIC

Nothing economic can happen until two or more people get together and build something useful. In a global human network that is facing global constraints, the core function of the economy must be to find each other. This is made extremely difficult by the existing “factors of production” that now classify and allocate your productivity and mine. The true intrinsic value of money resides in the social, creative, and intellectual capacity of people who design, maintain, and support those factors of production.

Early cryptocurrencies solve only part of this problem by providing a indelible ledger and medium of exchange. But true money must store (represent) human productivity, otherwise people would not be willing to be productive in exchange for it. To reconcile these shortcomings, The Ingenesist Project (TIP) is building a new class of cryptocurrency with the defining characteristic of storing and exchanging social, creative, and intellectual value intrinsically, i.e., within the currency itself.

By integrating a Curiosumé layer with an efficient and robust blockchain backbone, people can exchange a currency that represents the intrinsic value of their own productivity in collaboration with that from their community. Curiosumé converts the résumé into cryptography that allows people to control their own identity as “smart keys” where they can interact with each other using “smart contracts” on a “smart blockchain” such as Bitshares and others.

It is well known that the value of a nation’s currency is backed by the productivity of its citizens. The same is true for states, communities, and even individual persons. Money must have intrinsic value. There really is no way around this except by developing an Intrinsic Coin with these specific characteristics. This already works on a small scale with community currencies and in co-ops. The challenge now is to scale broadly it to a point of voluntary generalized reciprocity.

Introducing Intrinsic Coin solves this problem by decentralizing productivity of a community prior to the exchange, not after. This allows people to take control of their identities and the market place for their social, creative, and intellectual capital. From decentralizing so-called ‘human resources’, to putting a tollbooth on big data, to hedging debt instruments, the implications of an Intrinsic Coin are sweeping and vast.

There is no shortage of work that needs to be done, but there is increasingly scarce money to pay for it. There are abundant social, creative, and intellectual assets in people that are not articulated in any traditional accounting system. If we can create that accounting system, we’ll be able to tap into a ground swell of hugely productive makers who are misallocated in their jobs and careers by the silos they are placed in … or excluded from.

People need a new form of money that they can trade among their selves which helps them find each other and represent their true unadulterated productivity. They need a decentralized ledger and a local exchange. This is where the promise of blockchain technology started. This is where Intrinsic Coin will serve.

The Ingenesist Project Team is comprised of multi-disciplinary experts in Engineering, Insurance, Banking, Philanthropy, and Blockchain Development. Interested partners and financial technology media are encouraged to contact the Ingenesist Project at https://ingenesist.com

References: Curiosumé – Reorganizing In the Era of Social Capitalism

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Occupy BitCoin

By Admin

On December 14, 2013

In General Information

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

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

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

People are Corporations

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

The post-Dollar economy

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

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

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

The End Game

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

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

Call to Action

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

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

References:

How The Bitcoin Protocol Actually Works

Bitcoin Wiki – Contracts

True Value of Bitcoin – Stefan Molyneux

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