The Next Economic Paradigm

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Making Money

The Ingenesist Project: Making Money

Nobel Economist Robert Solow calculated that 80% of economic growth is the result of advances in technology. This Makes sense. Technology makes us more productive.

However, GDP measures the products, not the producers. Engineers, Scientists, and Technologists are responsible for ideation, design, and implementation of new and improved technology.

Unfortunately, Engineers, Scientists and Technologists are classified as “intangibles” Intangibles are, in turn, classified as expenses to be minimized, not investment to be maximized.

Here’s the good news… 80% of the true global economy is simply hidden from view. Trillions upon trillions of dollars are sitting on the table waiting to be measured into existence. Can you see it?

The Ingenesist Project uses game theory, blockchain, and Artificial Intelligence to convert Intangible Assets into a tangible form.

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Analysis

The purpose of this video is to synthesize the simplest interpretation of value and test that against prevailing economic principals. Engineers, scientists and technologists are treated as EXPENSES, let that sink in. If they are not assets, then they are LIABILITIES… full stop. This is a clear, present and vastly consequential flaw that must be addressed by someone somewhere.

Otherwise, if there is no institution willing or able to defend this flawed economic principal, then it is super-vulnerable to disruption. We need to maximize innovation, not minimize innovation. There needs to be a wholistic and systemic approach to solving problems in the world. We must head off global systemic risks. As clever and experienced as the VC community is, they cannot be expected to pick and choose winners and losers in the next economic paradigm.

There is far more ‘money to be made’ by shifting engineers, scientists, and technologists to the ASSET column of the global balance sheet.

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An Invisible Economy

An Invisible Economy: The Ingenesist Project

A firefighter is worth millions of dollars per hour preserving lives and property…  but only when there is a fire. A Fire Protection Engineer can design thousands of buildings that will never burn.

In the absence of a fire, the true value of the Scientists, Engineers, and Technologists is invisible. But the value of their economic contribution continues to persist.

What if we could measure the true value of intangible assets into present value existence. A massive new asset class would be unlocked.

The Ingenesist Project uses Game Theory, Blockchain, and Artificial Intelligence to convert intangible assets into tangible form, at scale. There is no shortage of money, only a shortage of imagination.

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Analysis

The purpose of this video is to demonstrate how engineers, scientists, and technologists remove RISK from complex systems. Risk is directly correlated to “return” and, therefore, profits.

So what happens to all of that value that a single diligent engineer creates when they remove all of the risk? Is it paid to the engineer? no. Is it returned to the non-victims of the calamity averted? no. Is captured by the the banking system as some form of arbitrage? Yes, absolutely, yes.

This is the deep dark secrets of finance. Don’t let the engineers, scientists, and technologists know that they are paid 2-20% of what they are worth. They may want free stuff like healthcare, job security, or royalties, or else they’ll go build something else that pays better social dividends. Can’t have that.

Obviously the question becomes, what happens when there are no more engineers to eliminate risk? There is a tipping point and we are dangerously close to approaching it. These things are easy to measure, assess, and resolve but there needs to be an institution able to secure material facts and assert the economics of those facts.

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A Tiny Flaw

A Tiny Flaw. The Ingenesist Project

What if there was a tiny and nearly imperceptible flaw in Market Capitalism that could be easily corrected? To do so would solve many of society’s most pressing needs without disrupting the institutions upon which we depend.

Technological change must always precede economic growth. We are going about the business of civilization as if economic growth must always precede technological change. It’s like driving a car while looking through a mirror. In other words, money is not the cause of innovation. Money is the result of innovation. The implications of this tiny flaw impacts everything from Climate Change and Social Equity to Venture Capital and Global Debt. 

It started with classical economic theory. In the 1700’s economic inputs such as Land, Labor, and Capital were easy to measure. The products that resulted from these inputs were also easy to measure. However, in the 1700’s; social, creative, and intellectual inputs by humans were not so easy to measure. Accountants call them intangibles, but they are simply “invisibles”. 

Today, this is an easier problem to solve.  Ironically, technological Change has brought us new ways to measure intangible assets. All we need to do is convert them to a tangible form.  The resulting economic growth will far exceed global debt because there is no such thing as “not enough money to innovate”.  Together we can correct A Tiny Flaw   

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Analysis

This is largely the initial video in the series and the first that we published. Attention should be drawn to the idea that maybe there is a tiny flaw that can be easily corrected. Instead of trying to solve every single problem that is strangling civilization as we know it, we could solve one single problem and the other problems will solve themselves.

The question becomes: are we too vested in our misery to even consider such a possibility? Are we so narcissistic to believe that our particular problem is the one that must be solved even if it worsens someone else’s problem? Are we all expecting the “other guy” to change and that will make your world work? Good luck with that.

The flaw is no tiny, so hidden, yet so obvious that it defies the imagination. All we need to do is measure ourselves differently. Who is stopping us from doing this? nobody. What law says we can’t do this? There is none. And if we do correct the flaw, who suffers? No one.

Will we do it?

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A Knowledge Inventory System

A Knowledge Inventory System; The Ingenesist Project

Have you ever wondered why the credits at the end of a movie are printed so small and scroll by so fast? The credits are not there for your benefit. The credits exist for the benefit of the movie industry.

Film production is a highly intellectual, creative, and social enterprise. In other words, Hollywood is denominated by knowledge assets.   The rolling credits serve as a knowledge asset inventory system for all things needed to make the next movie.

Everything revolves around being on the credits or being known by people on the credits. This is how people find each other.  The rolling credits make this possible. Not unlike a blockchain, in order to cheat the system, one must alter every instance of the celluloid reel or digital file.

Engineering, science and technology are also social, creative, and intellectual industries fueled by knowledge assets. Not unlike a blockchain, engineering processes are irreversible and immutable.

When we look at a sturdy bridge, or magnificent structure, or a brilliant piece of software, there is no easy way to find the people who are responsible for a specific element of that work. The Ingenesist Project uses game theory, blockchain, and Artificial Intelligence to create a knowledge asset inventory so that Engineers, Scientists, and Technologists can find each other.

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Analysis

Engineering and science have long been compared to the Arts as a creative profession. The point of this video is to demonstrate how other creative professions deal with the intangibles gap. While the Hollywood system has its own set of pros and cons, the comparison is worthwhile. Notably, the arts often compensate creators with “royalties” while engineering, science, and technology most often pay hourly wages.

In addition, there are comparably fewer barriers, silos, or human resource management hurdles to navigate for artists. They don’t attempt to reduce a 4-dimensional performance down to a 2-dimensional CV/resumé. Instead, they can submit the 4D performance as their resumé. A great deal of efficiency is retained.

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An Algorithm For Innovation

An Algorithm For Innovation; The Ingenesist Project

A useful definition allows people to identify, replicate, or measure the subject being defined.  Yet the best definition we have for Innovation is basically, “You know it when you see it”.

How can we sustain our world if we cannot even define the sole instrument of change? 

Have you ever had an epiphany? That ah-ha moment that comes from deep within… …when suddenly your knowledge about something grows exponentially within a very short period of time? Let’s call that “innovation”, where one large innovation is comprised of many smaller innovations.

In order to measure innovation, all you need to do is measure the rate of change of knowledge with respect to time. You don’t need Calculus to recognize this as an algorithm for innovation … but it helps. 

If that idea doesn’t change the world, nothing will.

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Analysis

Innovation is a great mystery that does not need to be. Everyone innovates – it is necessary for survival. Yet the magic and mystique of the innovator is a cultural phenomenon that forms the foundation of tech social status. Innovation is denominated in money – if you are not flush with cash, then you are not an innovator. Only VC can be innovators due to their ability to navigate financial markets. It almost seems that the more difficult it is to identify something, greater scarcity can be assigned to it. With greater scarcity come greater value. Again, when we become vested in our own misery, progress grinds to a halt.

This is all quite counter productive.

The problems of the future will require innovation, creation, new ideas, and vast execution at an astonishing scale. In order to achieve true economic sustainability, we need to a metric to denominate true value, not propped up scarcity value.

It is relatively easy to create and measure where high rates of change are occurring in a community or society. It is then relatively easy to observe what innovations take place as a result. This isn’t exactly a unicorn farm, but you probably can’t have a unicorn without these conditions in the first place. It is then only a matter of memorializing these conditions in a tangible form.

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Dividends of Innovation

The Dividends of Innovation

Innovation is not linear  Modern civilization did not begin 10,000 years ago with 250 Trillion dollars sitting in a box somewhere in the desert.

Money was measured into existence as a function of the things that scientists, engineers, and technologists built. Innovations such as the wheel, wedge, and lever came long before the invention of International Trade Agreements Innovations in machinery, transportation and energy enabled advances in sanitation, healthcare, and computers

Yet, the wheel, wedge, and lever are more important and more widely applied than ever. Wouldn’t it make more sense if we developed a monetary system backed by the dividends of innovation rather than the gravity of debt?

The Ingenesist Project uses game theory, blockchain, and artificial intelligence to measure the true economic contribution of engineers, scientists, and technologists.

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Analysis

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How It Works

How It Works; The Ingenesist Project

The Ingenesist Project Uses Game Theory, Blockchain, and Artificial Intelligence to convert intangible assets to a more tangible form.

Part One: Observe The game is based on a system of claims and validations among a population of players. 

Part Two: Measure Blockchain acts like a giant datalogger that captures time-value data of game transactions.

Part 3: Predict The Percentile Search Engine predicts the likelihood  various combinations of players would produce novel outcomes. 

These three applications acting together create a virtuous circle that converts intangible assets into a more tangible form. Join The Ingenesist Project

Analysis

In almost every video, we make the statement that The Ingenesist Project uses game theory, blockchain, and AI to make intangible assets more tangible. This sounds pretty complicated, so how do you explain it in under a minute? The audience deserves to know how we intend to deliver on the promises that we are making.

The answer to this, and almost every engineering or scientific problem, boils down to making observations, measuring outcomes, and predicting future results. The same should be true here.

We’ve also stated that engineers remove risk from complex systems. Risk assessment follows a similar sequence; first you need to identify the risk exposure, then you need predict the likelihood it will manifest, then you need to measure the consequences of the event.

The game sets things into motion, the blockchain records the motion, and the AI reads the recorded motion and predicts the next point on the curve.

So what may seem like a very complicated and jargon laden geek storm is actually an extremely simply set of tasks that almost everyone already practices in the professional lives. Why reinvent the wheel?

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Network Effects

Network Effects: The Ingenesist Project

To borrow from a famous quote:  “Uber, owns no vehicles… Google and Facebook create no content… Alibaba holds no inventory… Airbnb owns no real estate….” But they have a combined value of almost 3 Trillion dollars. This is very interesting.

Whereas most companies are priced according to strict financial performance, Network platforms provide a virtual bridge that connects people to each other. They are priced proportional to the square of the number of human connections they serve.

This is known as Metcalfe’s Law of Network Value. If network platforms create a virtual bridge connecting people, why can’t we value real bridges using Metcalfe’s law?  Why can’t we value roads, airports, buildings and all manner of engineering, scientific, and technological infrastructure as proportional to the connections they serve? 

The Ingenesist project uses game theory, blockchain, and artificial Intelligence to convert intangible assets into a more tangible form. Join The Ingenesist Project

Analysis

We often say that Engineers, Scientists, and technologists need only to measure themselves differently in order to become “more tangible”. Most people’s eyes glaze over as if we’re living in some fantasy world. This video demonstrates that principal exactly as it happens with network platforms that are popping up everywhere around us. Really, we’re not making this up.

Metcalfe’s law arose from the telecommunications industry to measure the utility of telephone connections. The value of the network grows exponentially with the number of points in contact. Let’s start by saying that telephone networks themselves are a creation of engineering and scientific professions.

The engineering value of a bridge is equal to it’s replacement cost – so that’s what they pay engineers to create one. However, the economic value of the bridge includes every transaction, truck delivery, soccer game, doctor appointment, and math class that resulted from the ability for 10,000 people per day to cross the river.

Facebook, Google, Alibaba, AirBnB, et al, could not exist if they were valued according to their replacement cost. Imagine what amazing works of engineering, science, and innovation are non-existant today only because it is valued incorrectly.

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Risk And Return

Risk and Return

As the saying goes, money makes the World go around. This may not be entirely true.

Where risk is high, the cost of money is high. Where risk is low, the cost of money is low. Engineers, scientists, and technologists specialize in removing risk from complex systems.  So, why is there never enough money to mitigate the world’s most pressing risks?

Fortunately, all we need to do is reorganize engineers, scientists, and technologists and the money will surely follow

The Ingenesist Project uses game theory, blockchain technology, and Artificial Intelligence to reorganize the engineering and scientific professions. 

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Analysis

This video poses a legitimate question. If there is money to be made by mitigating risk, why are Engineers, Scientists, and technologists classified as expenses (liabilities), and not assets on global balance sheets?

It’s amazing how vested we are in this staggering little flaw in market Capitalism.

Key Phrase: Risk and Return

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The Innovation Standard

The Innovation Standard: The Ingenesist Project

Solving the problems of the future will require humans to innovate at an astonishing rate… … far greater than anything our existing economic system can support. In order to achieve this, there must be a fundamental shift in how knowledge assets are measured, curated, and exchanged.

Today, a traditional bank distributes money backed by your promise of FUTURE productivity. Innovation is also a promise backed by FUTURE productivity. Two currencies backed by the same underlying asset are readily convertible.

In the future, an Innovation Bank, would issue currency backed directly by the true value of innovation. All we need to do is measure ourselves differently. 

The Ingenesist Project uses game theory, blockchain, and Artificial Intelligence to convert intangible assets into a more tangible form.

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Analysis

The Innovation Standard is a reference to the Gold Standard or the Debt Standard, or the Oil Standard, etc. Whatever the standard, it needs to represent human productivity or else nobody would work in exchange for it (think about that for a sec).

The problems that face the world are global and they are systemic. That means that free markets technically don’t exist and the next thing that needs to be produced is the thing that society needs. Sure everyone wants a new Lambo, but it’s not very useful if the roads are too rough to drive it. Sure.Bitcoin is awesome but it’s contingent on a reliable energy grid. Sure, I love AI and much as the next geek but who’s going to read my content if they lack education to act on it?

Money as we know it just does not move fast enough. It does not represent the true productivity of Moms and Dads, soccer coaches, engineers, Scientists, teachers, and event organizers. Money needs to be produced as thenet sum of productive human behaviors. People know what problem needs to be solved next and if you give them the tools to fix things, they will.

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The Law of Nurture

Competition is one way of arriving at the optimal solution to a problem. Some call it the “Law of Nature”, survival of the fittest – where the  final score can only be One to Zero. Unfortunately, in order to feed the winner, we must cultivate suitable losers.  Evolution is slow and inefficient as a business optimization tool.   

The laws of Nature provide infinitely more examples of collaboration than competition.  Even if one player does not win today, their capacity to innovate remains to continuously improve the game for everyone later … if we let them. 

The Ingenesist Project uses game theory, blockchain, and artificial intelligence to convert intangible assets into a more tangible form.   Join The Ingenesist Project

Analysis:

This video acknowledges the value of competition as a solution optimization tool. So competition is not being called into question. However, a different problem involves preserving the knowledge, innovation, and wisdom that was created in the act of competition so that they can be developed in future or tangential problem solving environments.

Economics is the science of incentives which invariably invokes the discipline of game theory. we do have complete control over how a game is played, how players are preserved (or destroyed) and how equity is distributed. As such, we have complete control over the sustainability of the game which is ultimately in the best interest of everyone.

The conclusion is that a game which maximizes the health and welfare of the players ultimately maximizes the value of the game.

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A Virtuous Circle

A Virtuous Circle:

A bank won’t lend money to a project that is not insured. An insurance company will not underwrite a project that is not properly engineered. Engineering projects need to be financed to cover the cost of design and construction.

This is the Virtuous Circle of economic development. If any part of this cycle is broken, incomplete or corrupted, economic development fails.  

Financial institutions simply issue paper receipts called “Money” to represent the actual things that engineers, scientists, and technologists create.

Money is, in fact, the intangible asset and engineering is the tangible asset! We’ve gotten it backwards.

When a virtuous circle reverses itself, it becomes a vicious circle. This is where we are today Fortunately, this is an easier problem to solve. The Ingenesist Project uses Game Theory, Blockchain, and Artificial Intelligence to reverse this vicious circle. 

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Analysis:

The purpose of this video is to introduce the big picture of how the Innovation Bank will integrate with existing financial networks to make the production cycle more efficient and more responsive to systemic risk.

The point of this video is to isolate the idea that our global economy is an interrelated system with 3 critical components that must be integrated and operating at peak efficiency in order for the economy to serve global citizens equitably.

The challenges of the future will require humans to innovate at an astonishing rate – far more rapidly than our current financial system can support. There is no way that Venture Capital – our current “best bet” – can respond to the speed, breadth, and depth of technological change.

The problem ahead is systemic risk. It is not possible for a collection of competing VC to pick the winners and the losers of the next economic paradigm. Unintentionally, the the VC system may cause more damage than good.

This idea is useful for when we introduce the game, blockchain, and AI components – the blockchain serves as a check valve that allows the virtuous circle to spin in only one direction. The game mechanics provide the energy to keep the virtuous circle spinning in the right direction, Augmented Intelligence will help identify what components of the system are operating optimally so that innovation can be applied correctly.

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Decentralization Of Engineering, Science, and Technology

Decentralization is the rallying cry of the Blockchain Movement.

Few people realize that the Science, Engineering, and Technology professions are already decentralized. Unlike Banking and Finance, there are no all-powerful incumbents that must be vanquished. And the laws of Nature already apply to everyone.

Instead, Scientists, Engineers, and Technologists are contained by innumerable silos that have little to do with the Natural Laws  We are segregated by jurisdiction, academia, ontology, corporations, politics, Trade Groups, Societies, international borders, and much more.

We represent 5% of the workforce but are responsible for 80% of economic growth. But collectively, we are weak, disorganized and powerless to prioritize the needs of our World. The only thing standing in our way, is ourselves. This is a much different problem than decentralization.

The Ingenesist Project uses Game Theory, Blockchain and Artificial Intelligence to remove the silos that divide us.

Analysis:

The single point of this video was to introduce the distinction that a centralized institution and a collection of compartmentalized institutions may have similar characteristics to the participants, but are not the same thing. The former is far more difficult to disrupt while the latter is entirely vulnerable to disruption. This represents a huge opportunity for those who can see the distinction.

This idea plays a central role in the execution of The Innovation Bank. Where many see a stone wall of resistance to change, there may actually exists a paper veneer.

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A Tale From The Crypto

Have you ever wondered why a soccer goal has a net? The purpose of the net is to provide a visual contrast so that 50,000 observers can immediately reach a consensus that something very important has happened. 

After that, a digital token is awarded to the team that scored a goal.  The digital token also secures valuable business intelligence like game strategy, player stats, league standings, revenue, and everything else.

However,  the consensus is by far the most important part.   With the consensus, a player can make a lot of money.  Without the consensus, they are invisible.  With the consensus, the community can invest in a new stadium. Without the consensus, we can only play at the school yard. With the consensus, the economy flourishes. Without the consensus, it fails. 

Lots of crypto projects have these same pieces. But mostly, they are mixed up.  The Ingenesist Project uses Game Theory, Blockchain, and Artificial Intelligence to secure community consensus.

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An Accounting System for Knowledge Assets

AI Generated Image

Summary:

Classical economics is built upon a scarcity model of supply and demand of physical assets. In the trade of knowledge assets, the transfer of knowledge to one party does not require the cessation of knowledge by the other. As a result, it is estimated that 80% of a modern economy is intangible simply because it is not measured in accordance with generally accepted accounting practices. New methods in Blockchain and AI allow us to measure new value assets into tangible existence. This article proposes an accounting system for the next economic paradigm.

When Bears and Bulls Collide

In conventional accounting practices, a positive entry in the asset column of a balance sheet must correspond to a negative entry in the debit column. However, Knowledge Assets (K-Assets), function differently. The transfer of K-Assets does not require deducting the asset from the previous owner. Consequently, K-Assets are abundant and necessitate a different form of accounting to correctly attribute the contributions of STEM practitioners on a balance sheet.

A Brave New GAAP:

The Innovation Bank by The Ingenesist Project,  provides the substrate for the production of K-Assets. This process is similar to how financial institutions facilitate the production of Capital Assets (C-Assets), but with distinct differences. Furthermore, the successful accounting system would facilitates the equitable exchange between of K-Assets and C Assets. The goal is to establish parity between these previously separate asset classes based on an universal risk-adjusted basis, rather than a scarce profit-adjusted basis.

Revolutionizing Technology Transfer

The Innovation Bank revolutionizes technology transfer by focusing on knowledge assets in their natural state – the mind of the practitioners – rather than a physical objects like machines, buildings, or processes that they may create. Although the end result is identical, this approach proves far more efficient.  

In the Innovation Bank, the K-Asset, is created when one practitioner makes a claim and another practitioner validates it on a decentralized database. As a reward, they each receive cryptographic tokens that can later be used to access system metadata or traded on an open exchange for business intelligence.  This dynamic “nano-credentialization” in aggregate, forms a means to measure economic potential.

A simple game with extraordinary implications.

The system operates autonomously, providing practitioners with incentives to generate new K-Assets. The rate at which they gain access to other practitioners depends on the quality and quantity of their own K-Asset production. Practitioners are driven to maximize token rewards and accumulate a personal transaction record consisting of successful claims and validations. Access to the database opens up more opportunities for them to generate further claims and validations, creating a positive cycle of growth.

Digital Career Path

Individual transaction records essentially serve as a digital public key, representing a practitioner’s résumé, CV, or portfolio. The owner maintains full control over this record. To ensure integrity, the same game mechanics that populate the Innovation Bank discourage trivial, false, inaccurate, and malicious transactions. The ledger is immutable, auditable, and incorruptible, providing a robust system that prevents such fraudulent or malicious behavior.

The Economy of the Future

In this brave new world of accounting, where knowledge assets are valued on their intrinsic merit rather than their scarcity, the Innovation Bank represents a significant step forward. By embracing this new accounting paradigm, we can unlock the full potential of human knowledge, foster innovation, and create a more inclusive and sustainable economy for the future. Imagine the world that humanity can build for itself if the other 80% of economic growth could be measured into tangible existence.

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Mitigating Global Systemic Risk

Image by Gerd Altmann from Pixabay

The State of The World

The world is facing increasingly systemic challenges that pose significant threats to the global economy. The risk of a catastrophic event in one part of the world triggering widespread instability or collapse is now more imminent than ever. This isn’t merely a political issue; it’s an engineering challenge with the potential for a straightforward solution.

Insurance plays a vital role in ensuring the smooth operation of the global economy by providing a steady financial backbone for its builders, innovators, and participants. However, insurance can only function effectively when we have a clear understanding of known risks, their probabilities, and the consequences of potential losses. This underscores the critical importance of curating accurate and validated information about the physical state of the world.

The Domain of Engineering

Engineers, fundamentally, are professionals dedicated to reducing risk in complex systems. Interestingly, their analytical methods bear a striking resemblance to those employed by actuaries in the insurance industry. This highlights that the task of mitigating global systemic risk hinges on harnessing the expertise and observations of global engineers, scientists, and technologists.

The Age of Disinformation

In the information age, the business model predominantly revolves around collecting, manipulating, and leveraging information. Sadly, there are limited incentives to curate and verify accurate information. It’s worth noting that the absence of information can be as detrimental as false information, and both are considerably cheaper than producing and validating factual information. This is where the financial system faces significant challenges.

Converting Intangible Assets into Tangible Assets

One of the most pressing issues facing society today is the misallocation and confinement of engineers and scientists within various silos, such as academic institutions, political boundaries, corporate structures, arcane ontologies, and other factors unrelated to the natural laws equally affecting us all. Their knowledge is often categorized as “intangible assets,” not because it lacks substance, but because it’s challenging to quantify. Imagine if there were a quick and straightforward method to measure these intangible assets, transforming them into “tangible” assets, thereby creating a new asset class significantly more valuable than traditional assets. 

A Straightforward Solution 

The Ingenesist Project, a nonprofit professional network, is developing a platform designed to measure intangible assets and render them more tangible. Through the utilization of game theory, blockchain technology, and artificial intelligence, credible individuals make claims about the physical state of the world, which are then validated by other participants on the professional network. This dynamic process creates a validated and easily measurable large language graph, from which valuable AI business intelligence can be derived. Participants receive electronic tokens for contributing to this immutable native blockchain. The global insurance and finance industry can access this powerful network graph by purchasing tokens on a third-party clearinghouse from those seeking to sell them, with token value determined by market supply and demand.

Vast Consequences

By introducing this innovative framework, a new set of incentives can be established, making truth more profitable than fiction, at scale. The barriers that have traditionally separated engineers and scientists will no longer obstruct the curation of information essential to the insurance industry for crafting effective and socially impactful insurance products. This platform operates under a set of rules that apply equitably to all participants, eradicating corruption and unnecessary friction. Crucially, it provides the insurance industry with a reliable baseline of data to train AI models accurately, ensuring they operate in the right place, at the right time, and at the right price.

Visionary Leaders

The Ingenesist Project seeks sponsors to expedite the development of the “Innovation Bank.” Additionally, directorships and governance positions are available for visionary leaders in the insurance and engineering fields who recognize the potential of this groundbreaking initiative.

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The Innovation Bank: Decentralization of the Engineering and STEM Professions

1.0 Abstract

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. 

Full Paper:

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Behind Every Fraud Is A Mountain of Truth

Max Mallory, Supervillain

“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.

**

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The Innovation Bank Project Overview

The Innovation Bank applies to All Branches of the STEM professions

Image by Gerd Altmann from Pixabay

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:

The Innovation Bank; Blockchain Technology and the Decentralization of Engineering Professions

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Four Reasons Why Engineers and Scientists Need Their Own Blockchain

Image by Pete 😀 from Pixabay

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.

Please, let’s not squander it.

Please read this important paper:

The Innovation Bank and the Decentralization of The Engineering and Scientific Professions

Blockchain Is Better for Engineering. Global Engineers and Scientists must adopt Blockchain Technology to directly enforce physical fact over financial fiction.

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You Can’t Buy Global Solutions with Local Money

Courtesy of Wikimedia Foundation

epSos.de, CC BY 2.0, via Wikimedia Commons

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.

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The WIKiD Tools Algorithm

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.  

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TVG: The Value Game

A New Class of Business Methods

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.

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The Return of The Ingenesist Project

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.

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Blockchain and NAFTA May Have a Lot in Common

nafta-crossingAnyone who was around in the early 1990’s may remember the mantra of modern globalization was that centralized markets were bad and decentralized markets were good. Fast forward to 2016 and blockchain technology: centralized ledgers are bad decentralized ledgers are good.  Does this sound familiar?  Blockchain and NAFTA may have a lot in common. The good news is that perhaps this new world is not quite as uncharted as it now appears.

Coinciding with the end of the Cold War, we can now look back at NAFTA as the Big Bang of modern globalization.  The supporting calculus is credited largely to the ‘theory’ of Comparative Advantage;  an economic thesis referring to the ability of any given economic actor to produce goods and services at a lower opportunity cost than other economic actors. The idea first appeared in 1817 in a book by English economist David Ricardo, “Principles of Political Economy and Taxation”  David Recardo’s ideas still serve as the logical basis of international trade. The efficiency of this economic model were at the time, and still are, indisputable.

Further back, the 15th Century concept of Laissez-Faire is an economic system in which transactions between private parties are free from government interference.  Meanwhile, the “invisible hand” was a term first used by Adam Smith to describe the unintended social benefits of individual actions.  These ideas formed the cornerstones of modern Capitalism – the decentralization movement of a prior era.  Indeed, Capitalism solved a great many human problems while arguably ushering into existence new, and possibly more perilous problems such mass political instability, financial crises, and even climate change.  Now, the advent of bitcoin claims to solve many of these problems.  This begs the question, what new problems will be created after 25 years of blockchain technology?

More importantly, perhaps this connection to a large body of precedence (if we are clever) can guide us to a different set of outcomes than prior decentralization technologies.  This is an important and timely question given the blockchain technology, due to the Network Effect, is exponentially more powerful than the relatively linear Law of Comparative Advantage.

Lessons Learned

I was involved with developing standards for the mutual recognition of engineering professionals between US, Canada, and Mexico back in 1993-1996.  What made NAFTA different, and hence “modern”, was an inclusion of free trade in services sector.  These included financial services like banking and insurance as well as professional service providers from engineers to librarians.  Essentially NAFTA attempted to treat intangible value directly as a tangible object for international trade.  Still a problem yet to be solved.

At the time however, the mutual recognition of professional engineers was controversial and divisive. The US engineers were fearful that they would lose their high paying jobs to cheap Mexican engineers, whose salaries were about 1/10 the US engineering salary.   A “giant sucking sound” was the popular phrase coined by a billionaire presidential candidate at the time.  The fear was made very real for many people, not unlike the immigration debate that continues to rage today.

I saw something different.

In Mexico, I saw an entire nation – an entire continent – that needed everything that US engineers create. Mexico, Central America, and South America needed roads, bridges, structures, water, energy, and every manner of infrastructure upon which free markets utterly depend.  Since NAFTA also liberalized trade in financial services, that meant that economic development could be financed at low cost of capital.  In my youthful idealism, I felt that the opportunities for engineers from all countries was beyond extraordinary – to me, it was specifically the rising tide of basic infrastructure that would float all boats.  Unfortunately, this opportunity was woefully squandered.   Let me explain.

In the US, and many developed countries, the professional engineering licensure laws assure transparency, consensus, and economic incentives that rewards high integrity rather than low integrity among engineers and contractors who carry such licensure.  When the PE stamp is indelibly attached to the project plans, the asset that is described by those plans is held in suspension on the balance sheet during the design and construction phase. This span of time is when the highest monetary risks and technical risks occurs.  Insurance companies depend heavily on engineers to verify the design, materials, processes, components, chronological order and performance of all components of the systems that they insure.  Where risk can be transferred to insurance, the cost of capital can be minimized.

The problem with the NAFTA Mutual Recognition Standards for engineers was that the three negotiating bodies for the US, Canada, and Mexico failed to reach an agreement over reciprocity of the other member’s licensure model and instead defaulted to the highest common denominator which fell far short of practicality while also failing to meet the conditions of insurability, especially for Mexico.  As such, infrastructure projects could not be financed for lack of licensed engineers in the relevant NAFTA jurisdictions. This was not for lack of money because NAFTA also liberated access to financial services – but for lack of insurance. Without a tip-to-toe insurance presence, Latin American economies continue to experience difficulties in bridging the capitalization gap.  Innocent people suffer.

Many trade agreement that followed NAFTA would go on to include free trade in services, and also inherit this flaw capitalization of infrastructure for lack of Global Engineers.  Unfortunately, mutual recognition of engineers would be stopped cold at the borders for lack of insurance.   Many of the problems associated with globalization today, in my opinion, can be attributed to the failure of the NAFTA Mutual Recognition Document for Professional Engineers.  We have an opportunity to correct this flaw and it is imperative that we do so.

To centralize, decentralize, or re-centralize. 

While the economic theories of decentralization are sound, the intended outcome has been elusive.  Instead of converting from centralized serfdom to the invisible hand of freedom, we keep inventing new forms of re-centralization where one centralized system is traded for another under the auspice of decentralization!  The danger is that blockchain technology will not reach its potential of economic freedom for all, rather, it will simply become another form of mechanization that replaces people with machines.  A decentralized solution will require the integration of machines with people.  That means we need to augment human capacity not “surplus” it.

Blockchain technology replaces some – but not all – of the decisions that a human administrator makes.  It will be important to look at bureaucratic processes and accurately discern what can go to a blockchain and what must remain in human judgement.  The current markers of re-centralization include so-called permissioned ledgers to replace back office workers.  Permissioned by whom? A centralized authority? The running joke in the cryptocurrency space is that any effort to control a decentralized system quickly cancels out the advantages of having one in the first place.  Re-centralization is dangerous.

Instead, the integration of humans and blockchains should take a hybrid approach where humans serve as adjudicators to the blockchain machinery pointing smart contracts toward the intended outcome at specific points of risk transfer.  Eventually, a means to decentralize the human adjudicators will be required so that they cannot be corrupted.  One such solution is proposed by The Ingenesist Project.  It is called Curiosumé and it converts a CV to cryptography so that holders can lock contracts to a blockchain quasi-anonymously.

The consortium between engineering and insurance is a critical development in the current evolution in blockchain technology and is required to break the cycle of recentralization by expanding the insurance capacity of our financial system to a fundamental storage of value – public infrastructure.  We need to learn how to convert existing engineering and construction contracts into blockchain adjudicated smart contracts. We need to figure out how to decentralize the adjudicators in a fault tolerant system that cannot be easily corrupted, thus providing for optimal allocation of public and natural resources.  Then we need to expand the adjudication system to all other service professionals who also serve the needs of our human markets.  The resulting cryptocurrency will have intrinsic properties that people will be willing to trade. In this manner, the cost of capital will be lowest for the most proper allocation of resources required by an increasingly crowded planet.

(Adapted from; Insurance: The Highest and Best Use of Blockchain Technology, D.Robles, 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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