Tijauna_slums_against_the_fence_largeThe early 1990’s saw the end of the Cold War,  spectacular advances in computers, the Evolution of the Internet, and a new world order fueled by commerce instead of warfare. Upon this landscape,  NAFTA is considered to be the Big Bang of modern Globalization. What is not often considered is how NAFTA, for better or worse, was to influence every free trade agreement that followed.  The Secret of NAFTA was the failure of engineering mobility and therefore the failure of real economic development.

What made NAFTA unique was the provision for the trade of services specifically, financial services and professional engineering services.  The former succeeded while the latter largely failed.  Herein lies the flaw that needs to be corrected.

Many people remember NAFTA as that giant sucking sound of US jobs going South of the Boarder. When I was a young and idealistic engineer I saw NAFTA as Mexico needing everything that US engineers provided. With the free trade of financial services, engineering projects could be capitalized – this had to be huge.

Intangible Assets are the REAL tangible assets

I found myself in Mexico in 1994 taking what was supposed to be a temporary assignment in a small engineering department of a private university right over the California border – I ended up staying 3 years.  This turned out to be the most profound experience of my professional career.

What struck me the hardest was how intelligent, resourceful, and creative the Mexican engineering students were.  By contrast, I saw the general stage of development of Mexico – at the time it was still being described by the Cold War label as a “Third World Country”.   Soon after, I witnessed a tragic devaluation of the Mexican Peso, where the local currency lost about 1/2 of it’s value against the dollar seemingly overnight.  To observe the reaction of the Mexican citizens, was simply indescribable.  I wondered how could money and jobs just disappear when there was so much work to do and so many people who could do it?

I decided that I’d like to test the Mexican engineering students against a known standard.  I developed a program that prepared a select group of 12 students to take the NCEES EIT examination (The Board Exams for US Engineers).  Their success rate was exceptional; 11 out of 12 passed.   Over the next two years we sent a random sample of over 250 Mexican engineers to the US Exams with a success rate comparable to the US engineers pass ratio.  If the engineers were equally intelligent and equally educated as US Engineers, then something else must be happening here.

Cause and Effect

I would later learn that economic development is a hugely complex subject.  However, at the time, I was deeply intrigued by the following idea:

If you throw economic growth (money) at a country are you guaranteed increased productivity?

The answer is NO. 

However, if you throw productivity at a country, are you guaranteed economic growth?  

The answer is YES.

Herein lays a tiny and nearly imperceptible flaw in NAFTA that needs to be corrected.

Technological change MUST precede economic growth. Economic Growth cannot precede technological change. 

We have gotten it backwards

Banks and and associated securities exists for the sole purpose of creating money to fund innovation. The REAL economy lives where the fact of innovation creates the REAL money.  This is the domain of Engineering, therefore, this is the direction that The Ingenesist Project has and will continue to focus on.

 


I will be delivering a very serious presentation at the Nation Society of Professional Engineers Annual Conference on July 2015 in Seattle.  My point will be crystal clear. Money must represent human productivity. Period. The base layer of any economy is a nation’s infrastructure.  As such, any new Cryptocurrency MUST be associated with the engineering domain otherwise it is equal to any other financial derivative whose value is also ultimately dependent on the value of engineered infrastructure.

It’s time to stop the poetry and time start building a civilization we can all be proud of.  It is time to build Curiosumé

Bitcoin Protocol Impact on the Engineering Profession

Abstract: 

The Bitcoin Protocol and Future Currency Impact on the Engineering Profession

In a Wall Street Journal essay, two authors wrote, “The digital currency known as bitcoin is only six years old, and many of its critics are already declaring it dead. But such dire predictions miss a far more important point: Whether bitcoin survives or not, the technology underlying it is here to stay.” This session will cover what digital currency means for the engineering profession.

“Decentralization” is a term being applied to platforms that use the Blockchain Protocol pioneered by Satoshi Nakamoto, the inventor of Bitcoin.  As a cryptographic currency, Bitcoin remains problematic.  However, as an algorithmic protocol, blockchain technology will enable society to cheaply perform common business processes that are now controlled by institutions such as banks, insurance companies, corporations, government, etc.  Today, rapidly emerging platforms are under development to bring “smart contracts” (algorithms based on blockchain technology) into the mainstream.  

An important and essential variant of smart contracts is called an “Adjudicated Smart Contract” that requires an independent 3rd party adjudicator that would “flip the switch” on algorithmic agreements in finance, insurance, and decisions of governance.  There is a staggering opportunity ahead for the engineering profession to position itself for the role of the adjudicator in a wide variety of important and high value transactions.  The caveat is that we too must change the way that we organize ourselves.   

This presentation, Decentralizing the Engineering Profession, begins with the failure of the NAFTA MRD followed by an introduction to blockchain technologies, and ending with specifications on how our profession can jump to the top of the value chain in the era of Social Capitalism – if, and only if, [the engineering profession] can choose to change.  

Date:

Thursday, July 16, 2015
Start Time: 3:15 pm
End Time: 4:15 pm
Number of PDHs: 1
Speaker: Dan Robles, P.E.
REF:

Bitcoin Protocol Impact on the Engineering Profession


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

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

What Happens Next:

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

Why does it still work?

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

Then came … and went … Bitcoin;

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

Bitcoin has 3 fatal flaws:

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

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

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

 

Consider an Engineering Backed Currency:

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

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

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

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

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

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

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

The Mother of All Hedge Funds

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

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