Hacker

The financial System is made up of 5 components that act as a system. If any of these components falters or is corrupted, the whole system becomes unstable. Therefore, it may not be a good idea to attack any one of these 5 components individually without understanding the consequences to the whole system. In fact, many economic shocks have been an attack on only one of these components.

The trick to hacking the financial system will be to alter it without disrupting the fundamental purpose of each component. In order to accomplish this, we need to replicate and integrate the functions of all 5 of these components. In that way, we may be able to induce what I call “The Big Flip” toward a more sustainable set of outputs.

These 5 components are as follows:

Entrepreneurs (supply — sources)
Markets (demand — sinks)
Accounting System (inventory)
Currency (storage and exchange of value)
Institutions (to keep the game fair)

Entrepreneurs: There is no shortage of entrepreneurs. To harness and release the vast stores of intelligent, productive, and creative people in the world should be fairly easy — all we need to do is give people a game that they can win playing by a consensus set of rules.

Market: There is no shortage of work to do, the entire planet is an epic case study in deferred maintenance. New energy sources, educational programs, safe food and water, transportation, civil liberties, community building and collaborative enterprise are all desperately in demand.

Accounting system: This is where we fall woefully short. Factors of production in the current economic model are scarce land, labor and capital — these are called “tangible assets”. Meanwhile, social capital, creative capital, and intellectual capital possessed by all people are called “intangible assets” and do not appear on a balance sheet — yet are responsible for the value tangible assets!!

Guess what, this is how we are controlled. This is how we are held captive, this is how we are made invisible and how our identity is taken away. As long as we continue to buy into land, labor, and capital economics, we will remain imprisoned by an accounting system that clears our accounts of what is valuable leaving behind what is not.  For example; motherhood is responsible for all taxpayers, yet does not appear on the GDP. This may sound weird, but we are accustomed to it. We need to develop an accounting system where factors of production are abundant Social Capital, Creative Capital, and Intellectual Capital, then allocate that to a sustainable market.

Currency: The dollar will soon expire under the weight of compound interest on an impossible debt load. Cryptocurrencies offer the brightest hope for a new way to articulate value. We are all very excited about this, but cryptos cannot also be called upon as the vetting institution that keeps the game fair. The recent events with the DAO demonstrate this. There still needs to be human intervention of some kind.

Institutions: Today we have laws and courts and enforcement that articulate power to ostensibly keep the game fair. This system is falling apart. Smart contracts embedded in the blockchain do not work. The recommended strategy is human adjudicated smart contract articulated on the blockchain. The best way to keep the game fair is to decentralize the human adjudicators. This is the great advantage of the proof-of-stake algorithm — people can be arranged in many real byzantine fault tolerant systems to secure a network.

Curiosumé is an analog to digital converter for knowledge assets. Curiosumé serves two important functions; the new accounting system and the decentralization of smart contract adjudicators.

1] First it establishes an accounting system for knowledge assets. This allows people to reorganize around social, creative, and intellectual capital in existing communities. Productivity is associated with innovation instead of some increasingly irrelevant association with land, labor, and capital.

2] Curiosumé decentralizes the role of the adjudicator by converting a person’s résumé to cryptography that can open and close contracts on a blockchain. The algorithm can select the adjudicator anonymously until the point of transaction upon which their ID is sealed to the blockchain. You cannot corrupt what you cannot see.

By deploying Curiosumé to a blockchain with the distinct purpose of hacking the financial system via the five components of an economy simultaneously, we may stand a chance of inducing The Big Flip to an economy based on new factors of production. Maybe a lot sooner than anyone is expecting.


earthshot2The hallmark of a great society is the ability to capitalize it’s needs, not it’s arbitrage opportunities.  The Highest and Best Use for Blockchain Technology must be to reduce the cost of capital by decentralizing risk, not necessarily money…yet

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

A different track is required.

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

We have seen this before.

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

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

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

Let’s begin.

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

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

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

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

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

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

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


There is no shortage of crypto pundits who’ll wax poetic over the imminent disruption that blockchain technology will render over the insurance industry.  A more likely scenario will be a slow and intentional transition between new and old technology.   The objective of this article is to present some questions related to Bitcoin Protocol for the insurance industry and begin laying out a strategy for mitigating these perils.

725_aHR0cDovL2NvaW50ZWxlZ3JhcGguY29tL3N0b3JhZ2UvdXBsb2Fkcy92aWV3L2QzNjA1NGQ3MDZmZDM2ZDQ0NDIxYWJhZWY3ZDk1NGEzLnBuZw==On a sour note, the Bitcoin protocol now provides a way for Insurance Company Executives to eliminate countless brokers and administrators from the balance sheet as computer algorithms are now capable of performing many of the same tasks.  On the other hand, these same executives are being asked to provide insurance to clients who intend to do exactly that; replaced countless brokers and administrators with a computer algorithms.   Can these companies identify the risk exposure to their selves and their client?   Can an actuarial scientist calculate the probability that any number of perils will manifest?  If so, does anyone truly understand the consequences of a crypto-block-coin meltdown?  I didn’t think so.

Meanwhile, regulators are faced with with a set of circumstances without precedent.  The purpose of regulations of any kind is to encourage or discourage certain types of human behaviors.  So if the human is removed, are these regulations still needed?  How will they be interpreted? What new regulations must be created?  What current regulations stand in the way of insurance innovation using the blockchain?

How different would it be to insure a decentralized organization than it would be to insure a centralized organization?  Where do the liabilities attach and where is dominion asserted by the owners where decisions and outcomes are determined by a computer algorithm?   Is bitcoin money? Can it be taxed like money? Does taxation make it money? Is bitcoin property?  Can I hold title to bitcoin?  Is bitcoin risky? Is there any actuarial data that provides valid historical trends to extrapolate from?   Are blockchains defensible in a court of law? Are their  currencies legal, illegal, or extralegal?

These are huge questions.  Fortunately, the world will not likely change as rapidly as the pundits will have us believe.  There will needs to be a methodical transition plan between current centralized structures and future decentralized structures.  The best way to start is be collecting an inventory of existing social institutions that are codified and acting successfully as an effective bureaucracy today.  Then we need to slowly add a blockchain to their clock and study the opportunities in that environment.  We need to understand the difference between where human decisions can be replaced by algorithm but to also be vigilant to preserve those human judgements that are not replaceable by an algorithm.

The outcome will be a new type of bureaucracy where humans act at a much higher level as adjudicators to smart contracts on a blockchain


Blockchain Technology and the Engineering Profession

Blockchain Technology and the Engineering Profession

Blockchain protocol and technology is said by many to be among the greatest accomplishments of human intellect since the Internet.  Blockchain is the underlying technology to what is commonly known as Bitcoin, however, the technology is not exclusive to Bitcoin.  Swarms of innovators are working feverishly to design and deploy new business platforms that incorporate blockchain technology.

The blockchain protocol

However, the implications of combining blockchain technology and the engineering profession may be among the most profound.  In short, a blockchain is a computational “machine” with vaults, gears, and locks that acts as a trusted 3rd party to secure a database that is mutually shared by banks, insurance companies, corporations, and private parties. They use cryptographic “keys” instead of physical keys to open and close doors. Blockchains also include a feature where computers (owned by “miners”) compete to solve a trivial puzzle (proof-of-work) in order to open new blocks in a chain and reveal the next puzzle.  This assures that the block cannot move backwards in time therefore forming an indelible seal, or “notarization”.   This process also generates an electronic token (coin) that provides people with incentives to work hard to maintain the network. With these components, the “machinery” can automatically verify facts and execute transactions between parties where nobody can cheat.

The Professional Engineering Protocol

By contrast, for nearly 100 years, the Professional Engineer too has acted as the trusted 3rd party to banks, insurance, corporations, and the public.  The PE stamp has served to secure the public ledger of accounts related to physical infrastructure upon which modern civilization depends.  In the United States (and other countries) the PE stamp is the node of assurance that validates time and fact. Each PE is a node in a system and is individually secured by education, experience, examinations and model law. Engineers solve real puzzles in order to reveal the next real puzzle in a chain – the engineering product can never move backwards and is therefore indelible. The combination of these components provides banks and insurance companies with assurance to execute financial transactions and payments whose value is, in fact, stored in public infrastructure and productivity.  Nearly all actuarial data used by banks and insurance companies is tied somewhere to the professional engineering stamp of assurance.

The problems with Blockchain

Part of the problem plaguing cryptocurrencies is that they are virtual assets and can never meet the intrinsic standard of representing a real physical asset. This problem may be solved if professional engineers were to adopt blockchain as their own new iteration of the PE stamp.

There is no shortage of crypto-pundits who wax poetic over the ideals of a decentralized universe thanks to the miracle of the blockchain.  Meanwhile, speculators fawn over Bitcoin’s potential as an alternate currency, possibly a black market currency, without really understanding the nature of currency itself.  The truth is that money must represent human productivity otherwise people would not be willing to work in exchange for it.  Human productivity is the domain of engineering, period. 

The Opportunities for Blockchain in Engineering

Needless to say, the opportunities to deploy blockchain technology in the engineering profession cannot be overstated.  The professional engineer represents a “smart key” that can open and close smart contracts on a blockchain.  All contracts ultimately must lead to a physical entity and more often than not, that physical entity is tied to an engineering stamp somewhere in it’s value chain. This is a fact.

What you will not find is a collection of experts who understand the direct analogy of blockchain technology to the institution of professional engineering as deeply at the researchers at Coengineers. It is almost as if the Bitcoin designers came to the conclusion that professional engineers had it right all along.  Coengineers, PLLC is now at the forefront of this industry, at the global level.

Give us a call and we will help you develop blockchain applications specific to your engineering business methods.  We understand the technology, the platforms, and the developers. Industry, government, banking, and insurance are all beneficiaries of blockchain applications adjudicated by professional engineers.  We are Coengineers, we build together.

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Coengineers, PLLC is currently leading the Financial Technologies Task Force for the National Society of Professional Engineers.  The objective of the task force is to research the implications and discover the opportunities to deploy Blockchain Technology to the Professional Engineering Disciplines. [Reference: The Bitcoin Protocol and Future Currency Impacts on the Engineering Profession ]

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Please forward this article “Blockchain Technology And The Engineering Profession” to others.


coengineers.comProblem:  Many contractors say that their COGS (cost of goods sold) consumes 10-30% of their expenses. Obviously, this cost is passed on the customer.  Bidding can be made far more efficient with BidPool Adjudicated Smart Contract Gaming platform.

For example: 5 contractors may spend $10K bidding on a 1 million dollar project that only one will win. Further, each contractor may only win 1 out of 5 bids submitted. These losses are ultimately passed on to the market in increased cost, lack of industry collaboration, and influence peddling. As such, the cost of bidding is represented by the following relationship:

Cost of bidding = COGS multiplied by Number of Bidders

Adjudicated smart contract: Consider a process where a project owner and all 5 contractors (or more) each put a $10K promissory note into a blockchain  escrow account. An engineering firm such as Coengineers, PLLC will then perform a 3rd-party project definition report and Statement of Work that collects all relevant information that the contractors would need to bid on a job. All contractors are then invited to an electronic RFP.

Game Mechanics: Whoever wins the RFP pays (by escrow release) $10K to Coengineers, PLLC for the SOW report. The losers pay nothing. If the owner does not select a contractor, the owner then pays for the report and can use it to hold another contest in the future. These savings are ultimately wrapped into the discount of the projects according to the following relationship:

Cost of bidding = COGS divided by number of bidders

Aligned Incentives: Where there is no penalty for either winning or losing, the incentive to cheat is reduced. The Value Game realigns major incentives and the projects benefit from.

  • Improve matching of qualifications to the project
  • Improve quality and seriousness of owners (no “tire kickers”)
  • Eliminates bidding redundancy
  • Everyone bids “apples to apples”
  • Rewards collaboration and intangible assets
  • Reduces project variance (i.e., change orders)
  • Reduces marginal cost of additional bidders
  • Opens market to more bidders (prediction markets)
  • Increases transparency
  • Reduces project costs
  • Insulates conflict of interest
  • Resistant to corruption

Additional benefits:

A comprehensive project definition can be used for many purposes downstream:

  • Contractor RFI/RFP
  • Master Schedule
  • Bank Financing
  • Project Insurance
  • Statement of work
  • Contract language
  • Inspection compliance
  • Construction and Accounting Forensics

Scalability:

Future advancements in financial technologies such as the Blockchain protocol and Knowledge asset networks such as the Curiosumé protocol will allow BidPool to scale infinitely to many project types, markets, and jurisdictions.

Summary:

BidPool is a Value Game that reduces the cost of procurement, increasing project assurance, and realigning market incentives to reward high integrity and not reward low integrity. By introducing simple game mechanics and deploying modern financial and knowledge Asset technologies, BidPool may generalize procurement across markets and industries with direct lineage to the banking, insurance, and engineering sectors.

For more information contact Coengineers.com


Uber AirlinesAs the Uber/Lyft business model continues to hone its end-run around the heavily regulated taxi industry, many are now looking at the air transportation industry for vulnerability to Uberesque disruption. Enter Uber Airlines.

Long before social media, entrepreneurs have been trying to sell empty legs on private airplanes – almost 40% of all private jets fly empty as they return their pilots to base after dropping off their charge – and again for pick-up. Every few months I’d hear about some new start-up claiming to provide private jet service for the price of a commercial flight.  A few limited operations exist, but not many – and they can’t scale.

I spent about a decade in commercial aviation and later co-founded Social Flights, a jet-sharing service out of Nashville – we unsuccessfully tried to solve the same problem and learned a great deal in the process. I can say with great confidence that it is not possible to close the business case on Uber Airlines, YET.  A few more technologies need to be invented and maybe, just maybe, we’ll see an Uber Airlines achieve a scalable business model.

The aviation industry is heavily regulated by the Federal Aviation Administration. There are mountainous regulations pertaining every detail of the air transportation process; the aircraft, the crew, the passengers, weather, DHS, customs, scheduling, baggage, the airport, etc.  Aviation is many times more regulation dense than automobiles and the costs associated with air transportation are many times again higher than automobiles.   In order to make the economics work, an operator needs to be a commercial airline with scheduled service flying big jets between hub and spoke airports or they need to be a private on-demand charter operator. You can’t just stand on a street corner and hail Uber Airlines to anywhere.

There are three technologies that need to happen first:

  1. Next Generation Air Traffic Control. NextGen ATC refers to aircraft management technology that uses space-based GPS instead of ground-based radar to manage air traffic around airports. NG-ATC could literally light up 500 municipal airports and eventually up to 5000 small airports with all-weather service. Currently, only 30-40 major hubs can handle such operations.
  1. Curiosumé is a concept that we first developed at Social Flights, LLC for determining the probability that a certain number of people within a certain geographic area would all want to go to another geographic location within a certain window of time – and again in reverse, on the same day. The reason that we wanted to take this approach was an attempt to manage 5 sets of FAA regulations statistically instead trying to do so preemptively.
  1. Blockchain Technology would then provide the database technology which could handle all of the pilot qualifications, flight logs, aircraft maintenance logs, passenger manifest, inter-party payments, ground transportation, hotel reservations, etc. A set of rules and adjudicated contracts could be developed to manage the rest of the regulations.

With these technologies, we estimated that an Uber Airlines service would need a minimum of 2.5 million registered users located within 10 miles of 500 small NG-ATC airports (5000 per airport) in order to fill 6-8 seats on a private aircraft traveling in both directions to and from any one of the other 500 airports within an 8 hour period at least once per day. If this puzzle can be solved for small airplanes, it is only a matter of time before you could disintermediate large carriers as well.  That is how to solve this problem.


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

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

Background:

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

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

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

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

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

 

 


Introducing QuantWhat is Quant?

Quant is a digital token that represent human productivity. The total number of Quant that can be mined is 223.3 Trillion corresponding to the approximate dollar value of outstanding human productivity existing on December 15, 2015. This is the amount of future productivity that everyone in the world has committed to each other in the form of global debt obligations.

The flaw

What people may not fully understand is that human productivity is not stored in banks, corporate boardrooms, and governments – these institutions only maintain and control the ledger of future productivity, they are not the actual source of the productivity.

Rather, human productivity is stored and sourced in the combined education, experiences, talents, skills, health, community, passions, professions, careers, as well as works of engineering, artistic expression, and scientific achievements of humans. These are the actual stores and sources of human productivity.

Unfortunately for most people, it is very hard to see this distinction without a proper reference. Introducing Quant provides that reference unit of account.

Fixing the Flaw

Curiosumé represents a person’s talents, interests, and skills (i.e., future productivity) in a form of cryptography. In essence, fabricating smart keys that can open and close social contracts on blockchain. As a result, knowledge assets may become visible to an accounting system under the explicit control of the owner. Once built, Curiosumé will mine Quant from the “proofs-of-work” performed by real people solving real puzzles that maintain a real network. The Network will be able to allocate Quant using algorithms measuring fault tolerant network dynamics, thereby decentralizing production.

Building Curiosumé

The Ingenesist Project (TIP) has created the Quant Token on the Bitshares Blockchain.  TIP has issued to itself Q10,000,000 to be allocated to the development of Curiosumé.   All participants in the initial phase will be given a donation of Q100 per hour for helping build and disseminate Curiosumé to the public domain. Future levels, if founded, will re-value the earlier round on a ratio of 10:1

Introducing Quant as the internal token of the Curiosumé network will allow people to articulate knowledge assets in true decentralized corporations.

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Disclaimer: Quant is not a currency nor is it meant to represent value or security in any entity.  Quant is akin to a game token where the challenge is to solve a puzzle to a public domain ledger. There will be leaderboards, level-ups, and player interaction similar to any role-play game. Quant may be sourced and sunk only within the intended open-source game that it portrays.  The whole “Global Debt” thing is part of the backstory, not some sort of political aspiration or commentary.  C’mon, this is supposed to be fun.  


zertify zillow zestimate on blockchain Big Problem with Zillow Zestimates:

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

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

There must be a way to Zertify Zilliow Zestimates on blockchain

Implications:

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

Root Cause:

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

Solution:

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

Value Proposition:

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

Size of market:

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

Conclusion:

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

Notes:

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

nspeThe National Society of Professional Engineers has formed a task force to research and review blockchain applications aimed at the banking and insurance sectors for applicability and impacts to the engineering profession.  The task force is made up of 8 visionary engineers from within the membership.  Daniel Robles, PE (this author) was appointed to lead the task force by the president of the NSPE and approved by the board of directors.

Today, Licensed Engineers serve an essential role in the economy as adjudicators to banking and insurance industry underwriting of our nation’s infrastructure, in effect, supporting the value of our currency.  The integrity of infrastructure is what supports the majority of assets on a corporate or municipal balance sheet. It is a natural progression that Professional Engineers would articulate their judgement in design, safety, process, and longevity of these critical assets on smart contracts in blockchain protocol.

For example; The design and construction process is comprised of a master contract and a long series of minor contracts.  Validations, inspections, compliance and defect assurance etc, can all be articulated as smart contracts on a project blockchain where the licensed professional engineer serves as an adjudicator to flip the switches that release payments, trigger insurance coverage, time stamp completion, or open the next contract in a series of work orders.

Further, Curiosumé is an application developed by The Ingenesist Project that converts a résumé into cryptography.  This may be used to fabricate smart keys to open and close smart contracts on a blockchain.  By decentralizing the adjudication process, moral hazard and negative incentives can be effectively eliminated from acquisition, commissioning, servicing, and maintenance of high value public and private assets.

There’s an old saying that “A fish does not have a word for water”. This is because water is so elemental in the life of a fish that they can’t even see it. The same can be said for public infrastructure.  We often take for granted the availability of clean water, warm buildings, and safe transportation that we do not often see it as a storage place for value.  In fact, infrastructure is the perfect store of value because without it, society is far less productive where, say, we had to ride a mule, grow our own food, or chop wood for heat, etc.  It is well observed that the value of a nation’s currency is directly proportional to the value of their infrastructure.

The Liquidity Crisis

Many people in the cryptocurrency space are coming to terms with the speculative nature of the current collection of crypto-coins.  They realize that a virtual asset cannot be represented as a physical asset without some intrinsic intermediary to store real value. Cryptocurrencies appear to solve part of the problem of transferring an asset, but suffer many new problems such as articulating quantity and quality of the asset. In essence, money must represent human productivity otherwise people would not be willing to work in exchange for it – this is the source of low mainstream adoption and poor liquidity of cryptocurrencies.  The social agreement required to form a true currency is, and will remain, elusive without intrinsic value.

The engineering profession is precisely the means by which that intrinsic conversion can be implemented. People need electricity, they need food, shelter, energy, schools, bridges, highways, and airplanes and are willing to convert their own productivity in producing these things in reciprocal exchange with others producing these things.  Blockchain transactions must be developed to represent stored value in infrastructure thereby holding intrinsic value from which supply, demand, and factors of production (markets) can behave as needed in a functional economy.

NSPE Launches FinTech Task Force

The NSPE task force is an extremely important step in bridging financial industries with the needs of people and society. This may be one of the most important developments coming out of the cryptocurrency domain since the Satoshi Genesis block one.