Building a better silo
We are often asked by innovation and venture teams about use cases for Blockchain technology in engineering. It would be expedient to come up with a direct analogy between financial transactions and engineering transactions – after all, everyone understands money and both involve recording events in time. It would likewise be simple to demonstrate potential cost savings on a spreadsheet for any number of use cases from BIM to outsourcing to staffing, etc. The value proposition is that automated transactions on blockchains can help cull the back office and further commoditize the engineering profession. Such use-cases could likely result in venture funding or a magnificent ICO round. This is important to us because like most start-ups, we need economic growth before we can provide technological change.
However, under the current state of Blockchain art, this condition may accomplish little more than building ourselves a better silo rather than what is truly required; the creation of a fundamentally new and more efficient project delivery system. As with any engineering project, it could be immensely costly and likely irreversible to start down the wrong path.
The Design is the Contract
Engineering is different than finance and insurance. Finance and Insurance merely need to represent a physical object in a party / counter-party transaction script. There is no design involved. Engineering represents a physical object – the engineering design and specification IS the smart contract. Then, what happens in construction, operations, maintenance, renovation, and replacement is far too complex to be scripted in a single smart contract. Engineering outcomes involve enormous mass, forces, and real-life consequences. Attack vectors can kill.
We stop where the others start
With few exceptions, it is only after the engineering and construction is completed and validated that a financial or insurance product can be created. The engineers are done long before the banks and the insurance companies even start securitizing the asset. The Global Supply Chain is not even chain-able until after the Marine, Aerospace, Software and Transportation Engineers have gone home. Meanwhile, the maintenance, operation, and renovation of the asset continues to be integral to the securitization process.
IEBC suggests that the full potential of Blockchain technology in all industries would be constrained by the absence of a Blockchain specific to the engineering industries, such as we also propose.
Derivatives and Integrals
A DERIVATIVE is something whose value is derived from the value of something else. Financial instruments do not exist in the physical world. The Dollar is simply a representation of the collective productivity of workers – it is not actually the product. Bitcoin (et al.), are just another derivative token being traded on a secondary or tertiary market and have no intrinsic value.
An INTEGRAL is something from which the value of something else is derived. Engineering is INTEGRAL to finance. Engineering creates the collateral upon which the value of all securities is derived. Engineering creates the machinery through which human productivity is represented by a Dollar. Engineering creates the electricity through which the value of Bitcoin is mined.
Why is Blockchain called a “Revolution”?
At the culmination of the so-called Dark Ages, Nicolaus Copernicus (1473 – 1543) convinced world leaders that the Sun did not actually revolve around the Earth, rather, the Earth revolved around the Sun. This idea was so revolutionary [sic] that others before him had been killed for even making such a suggestion. Everything that people knew about their world changed overnight, everything needed to be reinvented in this new context. But great innovation – The Renaissance – followed relatively quickly and likely with no less comparative fervor than the Bitcoin Revolution today. These innovations were made possible by technological change first, followed by economic growth.
We need to decentralize the Engineers, not machines
There is a very specific order in which we need to approach the implementation of Blockchain in Engineering. Our proposed Blockchain (called QUANT) would be different from what some other financial and insurance consortia may be building. The engineering process is literally a chain of ‘blocks’ that result in a structure, process, or machinery. Engineering works are indelible and immutable by definition. An engineer cannot be validated by anyone except another engineer. It is essential that an Engineering Blockchain have a proofing, consensus, and validation algorithm of our own specification and design.
Our Copernicus Moment
Technological change must always precede economic growth. Economic growth cannot precede technological change. We are going about the process of Globalization backwards.
To all Engineers, engineering firms, and regulators, this is our Copernicus Moment. With the QUANT Blockchain, we now have the opportunity to introduce a correction to the global financial system where the technological change is the cause, not the effect of economic growth.