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The Hack-plications That will Change Everything

Zertify, Gamidox, and Exoquant (ZGE) are NOT the applications that will change everything.  Rather, the hack-applications that follow on the ZGE data suites will, in fact, challenge the idea that periodic economic collapse and hard-fought restructuring is a necessary inevitability of the human condition.

The current financial system is vulnerable to disruption.

One reason is that it is becoming unstable.  However, by far the more important reason is that it is very inefficient.  The underlying notion that competition alone can determine a winner is wasteful because the time, energy, and resources required to battle, kill off, and dispose of an opponent may exceed, many times over, the value of a win.

What exactly is the nature of winning and losing?

Can truly winning only happen when the opponent is truly dead?  Can a student win by learning even if they can obviously be vanquished by their teacher?  Does a teacher win by living among productive citizens, as they themselves become vulnerable elders?  Can such an exchange form without there necessarily being a financial, or even governmental, intermediaries.  Today, quite the opposite is happening in companies and communities facing both knowledge gap and layoffs.

How Stable are The Stabilizers?

The legal system is very expensive to maintain.  Global military projection is certainly not cost free nor are the subsequent defenses.  Even the so-called competitive “college degree” and “intellectual property” are outliving their accessibility, and therefore, usefulness. Ironically, it will be the financial system itself that is undermined by the scarcity of the lifeblood money.  People will adapt to new forms of enterprise as they have for millions of years.  This is what Zertify accellerates.

What are the alternatives?

It would be vastly unfortunate for civilization if the financial system were to become ineffective prior to  human’s natural evolution to a high order of economics.  In fact, it seems that the failure of society to evolve is the only thing keeping the current financial system in play – there is no other game in town.  Think about it; if money does not represent your productivity, why would you work in exchange for it?  When you can no longer “harvest” your own productivity, why would you sow that field?  People would sow a different field. This is what Gamidox provides. 

Let’s Measure Ourselves Into Existence

History shows that the darkest depths of re-organization preceded prior leaps of human civilization.  But is that ultimate, inevitable competition and sacrifice actually necessary, except to measure the old system out of existence.  People are already quite organized, why do they need to be re-organized except to fit within a measurement system that has outlived it’s usefulness, applicability and relevence.  Exoquant allows the new humanity be measured into a new existence. 

Let’s get it right this time

The ZGE applications provide the intermediate step that never existed at any other time in history.  ZGE are built and structured upon trust networks and Internet connectivity.  Why not start rebuilding now while we still have a chance to get it right, very right.

How To Change Everything Without Changing Anything

Today, I am releasing an outline of the first of three sections of my upcoming book release called:

Hacking The Financial System; How To Change Everything Without Changing Anything.  

This book will be a step-by-step instruction manual for correcting the relatively tiny flaw in Market Capitalism that is driving civilization into an unsustainable future.  All the tools that we need to correct this flaw (and consequently most of our planet’s most pressing problems) exist today and are readily available to everyone.   Does it sound too good to be true?  There is a hitch:

It is easier done than said.

For example: it was not until human civilization was “ready” to realize that the Sun was the center of their universe, and not the Earth, were we able to access all of the science and technology that resulted from that profound knowledge.  Yet all the facts were clear and present to humanity for millions of years prior.

The same may be true for the next economic paradigm, as I will describe in this book.  All the fact are clear and present today, it is only our ability to shift a simple observation that will determine the advent of a sustainable future that seems so daunting today.  I am confident, with reservations, that we can do it.

I would appreciate your feedback

Please find the table of contents below for the first section of the book. Section 2 and 3 will be posted later.  The appendix will have case studies of how we are deploying The Value Game in the Construction, Aviation, software development, and Philanthropic industries.  I hope that these early demonstrations will help the entrepreneurs among us realize that there may be an alternate business method that is, in a very tangible way,  vastly profitable.

***

Find PDF link below:

Hacking The Financial System:

How to Change Everything Without Changing Anything

Table of Contents

 

Preface

Introduction

Factors of Production

Part 1: Hacking The Financial System

Part 2: The Accounting System Hack

Part 3: The Institution Hack

Part 4: The Wall Street Hack

Part 5: The Currency Hack

Part 6: Evading The Antigen

Conclusion

Next Whitepaper: How everything changes

Final Whitepaper: How Nothing Changes

Appendix: Progress to date

The Currency Hack

This is the final post of the Financial System Hack Series.  Contrary to conventional wisdom, the currency is the last hack, not the first.  Only after Zertify, Gamidox and Exoquant are established would it be possible to introduce a currency that could compete, if not hedge the dollar.

With Zertify we can estimate the probability that a collection of knowledge assets will be able to execute a business plan some time in the future.

With Gamidox, The Value Game is played where several communities interact around a shared asset such as a condominium, airplane, school, hospital, road, car, or any “product” that has socially redeeming value.

These interactions are measured such that we can assign “value” to the game with the Exoquant algorithm.

So taken together:

If we can predict the probability that the interactions carried out by communities of people (relative to a product) will have a known value in the future, we can represent it as a “cash flow” with a known volatility (risk).  Now, combining many interactions carried out by many communities around many products with known volatilities, we can pool the predicted cash flows into one large diversified cash flow.  Next, we can  cut the large flow into “bonds”, which we can extrapolate to net present value and to fund the community activities.  This very similar to the way that corporation form and raise money – except without the corporation.  While banks continue to issue Debt Bonds, communities will issue Innovation Bonds in parallel

Here is the hack:

In the old days everyone carried gold around with them to engage in trade.  Since gold was heavy, bankers let people keep the gold in their vaults and they wrote little chits that represented the gold.  After a while, people just traded the chits and it was no longer necessary to convert back to gold with each transaction.  Eventually, the gold standard was eliminated altogether and people just traded the paper that now represents their future productivity (debt), not necessarily gold.

The currency of abundance

Likewise, after a while it would no longer be necessary to convert the community currency into dollars.  As the dollar slowly starts losing it’s value under the weight of the debt load people will just trade community currencies.  All of these values are made visible and validated from Zertify, Gamidox, and Exoquant data.

The antigen will not be triggered because this is exactly the same way that corporations interact with banks to capitalizes and securitizes dollar debt, the difference is that we are capitalizing and securitizing community innovation by measuring data, information, knowledge, innovation, and wisdom.  A currency of abundance can then replace the currency of scarcity.

Nothing Changes and everything changes

Corporations and government can continue activities to the degree that they produce socially redeeming value by simply purchasing innovation bonds from the people with their dollars – if they’ll accept them.

The Wall Street Hack

In the first post of this series, we identified the 5 components of a financial system and suggested that Zertify, Gamidox, and Exoquant would serve to simulate their functions in a parallel economy before ultimately being adopted completely.

In this post we will identify the hack on the Wall Street Financial instrument regime.  Although exoquant is a bit technical, the basic hack is quite simple:

  • Everyone knows that money is created through the creation of debt.
  • Everyone also knows that debt is a promise to produce something more in the future.
Likewise:
  • Everyone also knows that innovations increase human productivity.
  • Everyone also knows that innovation is a promise to produce something more in the future.

Here’s the hack:

Therefore, a currency backed by debt and a currency backed by innovation are both backed by future productivity.  As such, two currencies backed by the same underlying asset are fully convertible with each other.  Water dissolves water and innovation dissolves debt.

Here is how the Wall Street algorithm works: 

  • People produce stuff in exchange for money
  • Bankers do not care about money, they care about the rate of change of money over time.  This is called the “interest” rate.
  • Stockholders do not care about interest rate, they care about the rate of change of interest rate over time, this is called growth rate.
  • Hedge fund managers do not care about growth rate, they care about the rate of change of growth rate over time, this is the margin on their bets; options, and derivatives, etc.
  • CDOs and other financial exotica become increasingly divorced from the fact that people produce stuff for money.

The Exoquant Analogy:

  • The value of information is derived from the rate of change of data over time
  • The value of knowledge is derived from the rate of change of information over time
  • The value of innovation is derived from the rate of change of knowledge over time
  • The value of wisdom is derived from the value of innovation over time.
In order to “see” innovation before it happens, all we need to do is identify and measure rates of change of information in communities…and so on. Technically, this is a derivative, i.e., something whose value is derived from the value of something else.   All of these metrics can be seen quite readily in the Zertify, Gamidox data sets.  Each is a “derivative” backed by the stuff that people produce rather than the fiction of debt.  The ability to predict future productivity is superior with an innovation backed currency and therefore superior to debt forced productivity – often compared to slavery.

The Silver Bullet

Innovation is a magic word.  The hack is true to the Wall Street math as well as American culture.  Anyone running for public office would not attack the proposition of an innovation backed currency.  Therefore, the hack will not trigger an antigen.
 The next and final post, The Currency Hack, will formulate this innovation currency in more detail.

The Institution Hack

In the first post of this series, we identified the 5 components of a financial system and suggested that Zertify, Gamidox, and Exoquant would serve to simulate their functions in a parallel economy before being adopted completely.

In this post we will identify a hack to the vetting institutions and players that are supposed to keep the financial game fair but are in fact complicit with it’s unfairness; these include Libor Scandals, Banks, Insurance, The legal system, etc.  Any institution that sets the rules of play, Gamidox will change the rules.

At first Gamidox resembles a classic MBA analysis and strategy tool called Michael Porters 5 Competitive Forces.  In Porter’s analysis a corporation competes within its own business environment against:

  • Competitive rivalry within an industry
  • Bargaining power of suppliers
  • Threat of new entrants
  • Threat of substitute products
  • Bargaining power of customers

The Zertify Hack swaps out the competitive nature and installs a more efficient collaborative nature.  Revisiting Porters 5 Forces for collaboration, we can say the following would be true of the parallel economic system:

  • Collaboration within an industry
  • Collaboration with suppliers
  • Collaboration with new entrants
  • Innovation of improved products
  • Collaboration with customers

This is already happening.

Social Media is driving many social innovations that act as “institutions” would in the legacy economy.  For example:

  • Vendors use Customer Relationship Management (CRM) systems in nearly every industry.
  • Designers use Supplier Relationship Management (SRM) systems to collaborate Globally.
  • Social Media has spawned the field of Vendor Relationship Management (VRM) where the market tells the producer what to make and how to behave.

Community Relationship Management

But when we combine CRM + SRM + VRM we get Community Relationship Management (CoRM).  In essence CoRM is a Value Game.  Where customers, vendors, and suppliers all acting in the best interest of their constituents are in fact acting in their own best interest.  Cheating gets you thrown out of the game.  The combined analytics provide extensive data to the next hack called Exoquant.

Benign.

Gamidox is an organization that educates, creates, and deploys this new class of business methods where  Communities are encouraged to act in their own best interest when collaborating with other communities.  Jobs are created, things are produced, value is exchanged, and assets are accounted.  Capitalism remains in high gear and the hack will not trigger an antigen.

Playing The Value Game

The Value Game is played wherever 3 or more communities interact with each other to preserve a shared asset rather than consume it.  A Value Game can be built around any sharable asset such as a public corporation, an airplane, a high impact citizen, a condominium building, public infrastructure such as schools, bridges, and health care, etc.

However, A Value Game fails for asset and communities that offer literally no socially redeeming values (that is the point of social redemption, BTW)

The New Value Movement

The Value Game literally manufactures New Value.  As communities interact with each other around a shared asset, they teach and learn from each other – populating the Zertify Hack.  Several layers of vetting and conflict can be eliminated from an economy which will make all many forms of production and associated employment, run faster,  smoother, and more efficiently.

The Accounting System Hack

In the first post of this series, we identified the 5 components of a financial system and suggested that Zertify, Gamidox, and Exoquant would serve to simulate their functions in a parallel economy before taking over completely.

In order to accomplish this, we need to start with an accounting system hack. Fortunately, standard accounting practices are quite robust with double entry balancing of assets and liabilities.  Luckily, the problems only arise with the definition of what is an asset and what is a liability.  That is a relatively easy jailbreak.

The Price Is Wrong

The problem is that we “price” assets from low to high, from bad to good, and from loser to winner, etc., with little regard for proximity, environment, community, or time, etc.   The financial system needs to artificially create losers in order to price the winners.  This is fairly obvious for tangible assets like cars, tomatoes, and real estate, but not so much for so-called intangible assets like people.  This is hugely inefficient on so many levels and therefore vulnerable to attack.

The collaborative advantage

Zertify classifies human knowledge assets on a scale of 1-6 beginning with “teacher” and ending with “student”.  Students and teachers do not compete with each other and therefore intermediate levels represent various degrees of collaboration, not competition.  The teacher bias represents supply of knowledge and student bias represents the demand for knowledge, this establishes a trade vector in our proto economy.

Technically, the 6 segments represent 6 standard deviations on a normal distribution.  This allow for communities to organize around their diversity rather than recoil among their similarity. This arrangement also allows the for the usage of an important body of predictive mathematics.

Benign.

This simple hack is important because it is benign to the current economy and will not trigger an antigen. Corporations, governments, and communities already seek to match the right knowledge asset to the right demand asset for knowledge – this is actually improved under the new accounting system.

Therefore, the hack is true to the math because it provides the existing financial system with an equivalent predictive asset while eliminating irrelevant bias and costly competition.

The Resume Must Die

The objective would then be to move away from the resume system and establishing a community knowledge inventory system under a commons based ontology.  Everyone would have their individual API which they own, manage, control and transact. A person’s CV would be expressed as a string of code that  is anonymous until the point of transaction. A tremendous amount of data will be derived from Zertify which will feed into the next hack called The Value Game.

Hacking the Financial System

Hacking The Financial System is not about some doomsday scenario for the end times, it represents the natural ability for humans to adapt to constraints in their environment.  Right now, the financial system is vulnerable to many new systems and technologies that are reorganizing society. This series hopes to describe the meta dynamics behind these trends and offer ways for all people and institutions to adapt.

The financial System is made up of 5 components; they act as a system.  If any of these components falters or is corrupted, the whole system becomes unstable.

These 5 components are:

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

For example:

The dot.com crash was a problem with the accounting system failure. The 2008 crisis was a vetting mechanism failure. Devaluations across the globe are currency failures. Poverty is a market failure.  Corruption is an entrepreneurial failure.   All of these forces are interrelated and any one will have an impact on all of the others.

Curiosumé, The Value Game, and The WIKiD Tools Algorithm are specifically designed to replicate major functions of these 5 components – but in a different way.  Since Finance and Economics are mathematical, and natural systems are also mathematical, we cannot escape the math – our hack needs to be true to the math. For this reason, the work may seem fairly technical.

On the other hand, we have an incredible opportunity to correct many flaws of the old economy.  Anything that has no direct impact on the math also has no impact on performance and function of the 5 components – and can be easily designed OUT of the system.

For example:

  • We have an opportunity to swap out competition for collaboration
  • We have an opportunity to swap out scarcity for abundance
  • We have an opportunity to swap out mass consumption for mass sustainability
  • We also have the opportunity to eliminate a wide range of biases such as gender bias, racial bias, physical bias, social class bias, political bias, and many many more factors that may be irrelevant.

Where’s the Hack?

Every time there is an economic instability of any magnitude, black market currencies tend to form.  We have all heard stories of Levis, cigarettes, or even tulip bulbs being used as currency.  Black market currencies can also be quite subtle, yet no less tradable.

With 21st Century technology and social media, we are witnessing the emergence of what we can only now call “social currency”; such as reputation, referrals, vouches, influence, SEO, community, groups, and various other domains.  These are all black market currencies because they are used for the storage and exchange of the value that people create…what they lack is the rest of the “system”.

The difference now – and perhaps this is the first time in human history – should the so-called black market currency become systemized to the same extent and actually perform better than the currency that it hedges,  “a flip” will occur and the old system will fail to re-boot back to it’s current form as it has after every preceding economic crisis.

That’s the hack.

The Vicarious Search Engine

The search engine wars continue as both Google and Bing develop more exotic ways of arriving at the wrong answer.  Both commit the same error as all declining industries in social media space; assuming that they can predict what people want without engaging them in a conversation.

The first development is the predictive search notably pioneered by Amazon.com for predicting future purchases based on past purchases.  While predictive search is an improvement, the next step is the “vicarious” search, that is, when the search engine sees the world through your eyes – or someone Else’s – for your benefit.

The Web is Flat

The Ingenesist Project specifies a standard knowledge inventory that may be represented as a packet of code.  If someone wanted to see the web through the eyes of another person, they could buy a packet of their knowledge inventory.  Likewise, a web article would be tagged with the representative knowledge inventory code of the author.  Each comment or re post to a blog article would contain the knowledge inventory of its aggregated vetters.

The search can be done in reverse as well.  If I find an idea on the web and want to know who can execute it locally, I can simulate the knowledge inventory in one or more local people.  This is not trivial.  It literally allows an entrepreneur to manage knowledge assets that they did not know exists and predict content that does not yet exist.

Been there, done that?

Obviously there are privacy, security, and ethics issues related to others seeing the world through your eyes.  But what if every American was told 20 years ago that their identifier number for an insolvent social security program would be attached to their personal, medical, financial, and civil records then spun through Wall Street algorithms, sold worldwide to advertisers, politicians, banks, insurance companies, demographers, and ultimately hacked?  The cities would have burned.

So why can’t social mediators monetize?

The difference today is that if packaged correctly, we can own and control our knowledge inventory.  We can allow or decline access and we can revoke access – it happens all day long on Face Book, Linkedin, Twitter, and My Space.   On-line communities represent collections of knowledge assets.  The 400 Billion dollar per year advertising budget is on the table – up for grabs.  The 100 Billion dollar “head hunting” budget is up for grabs. The multi-billion dollar election budgets are all up for grabs. What are we thinking?

The likelihood of Innovation

The innovation economy will depend on business intelligence related to society’s knowledge inventory to match most worthy knowledge surplus to the most worthy knowledge deficit.   Entrepreneurs must know supply and demand for knowledge assets as well as where to find them at what cost.  Entrepreneurs need to predict competition, disruption, risks, and volatility in knowledge assets.  They need to conduct scenario tests before expending money.  They need to predict the likelihood of innovation and all of the options that they have in the future related to those innovations.

The Securitization of Knowledge Assets

Entrepreneurs need to securitize knowledge assets in order to finance innovation on the scale that will be required to offset our massive debt. This is how the innovation economy must play out.  We cannot depend on corporations or governments to do this for us.  People must control, regulate, anonymize, and manage  their own knowledge inventory.   If only they could see their world through the entrepreneur’s eyes – perhaps they need a vicarious search engine more than anyone.

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