The Financial Value of QUANT

It is often stated that the financial value of Bitcoin is proportional to the value of all the things you can do with bitcoin that you cannot do without bitcoin. Likewise, the value of QUANT will ultimately reflect the value of all the things that you can do with engineering that you cannot do without engineering.

[Note: QUANT is the cryptocurrency of the Integrated Engineering Blockchain Consortium (IEBC) with first issue and copyright on December 15, 2015 on the Bitshares blockchain and should not be confused with tokens of a similar name. QUANT is novel among digital tokens for representing value intrinsic to the ingenuity of people.]

Technological Change vs. Economic Growth

According to Nobel laureate Robert Solow, technological change is responsible for 80% of economic growth. For every dollar spent on engineering 4 dollars are created in the economy. Assuming these assessments represent the true value of human ingenuity, one would initially expect the QUANT to settle in constant dollars at around 4 dollars per QUANT.  But there may be more to this.

Increased Efficiency in Delivering Engineering

Other factors that may influence the value of QUANT may include:

  • Elimination of costly punitive vetting mechanisms, replaced by immutable transaction records
  • Reduced management overhead, replaced self-optimizing decentralized decision making.
  • Reduction in asymmetric information, replaced by aggregated transaction records,
  • Misallocation of engineering assets, replaced by predictive best-use allocation
  • Increased collaboration, iteration, fault tolerance, and transfer of knowledge inherent in validation process
  • Introduction of novel insurance and financial products to reduce volatility of outcomes.
  • Reduction of catastrophic failures.

Social Value of QUANT

The long tail ‘intangible’ value of technological change is a rarely discussed but is known to exist. For example, a bridge crossing a river may cost 100 million dollars but it saves 1 hour per person, over the next fastest alternative, for, say, 10,000 people per day for the 100-year lifespan of the bridge, at an average per capita rate of 25 dollars per hour, amounts to 9 Billion dollars for a 100 Million dollar investment, which may be as high as a factor of 100.  The next layer of social value is immeasurable since works of infrastructure, safe water, roads and building allow communities to come together and exchange ideas, form alliances, innovate, create markets, create art, music, schools, sports, families, and all the things we hold dear.

Cyclical Value:

QUANT may experience cyclical value if there were to be a shortage of engineers, or if a strong hurricane season is predicted, or a natural disaster occurs. Mega projects like planetary carbon sequestration or colonization of Mars may occupy many engineers, but higher values will drive more engineers to practice. Likewise, the completion of the project may cause a temporary surplus. Engineering companies today already experience similar business cycles, but a liquid pool of engineering assets may diversify these risks away.

The Rational Value of QUANT

Therefore, a rational argument can be made that the natural value of QUANT could align somewhere between 4 and 10 dollars per QUANT (in constant dollars). QUANT is not likely to be speculated wildly unlikely to be speculated wildly nor would it be vulnerable to bubbles.

Conclusion

Again, If we apply the Bitcoin standard to QUANT, the value of engineering is in all the things you can do with engineering that you cannot do without engineering. Prince Philip of England said “Everything not created by God, was created by Engineers”, while somewhat whimsical, the point is well made that engineering is integral to currency, not a derivative of currency. In fact, nearly 10 years ago, a legendary engineer Satoshi Nakamoto invented Bitcoin. Now the next generation will bring society the currency of ingenuity, the QUANT.