QuantChain – Executive Summary
QuantChain is a multi-agent algorithmic game where engineers make claims and validations, related to their professional experience, to a shared decentralized ledger. Engineers are awarded a system token for populating the ledger – their token award is proportional to their accumulated stake in the game and other factors.
This game activity creates an intentional network of transaction records that may be analyzed for business intelligence. Individual transaction records serve as a unique identifier, certification system, and private key for players who ‘mine’ tokens through their engineering acts and deeds. Meanwhile, the accumulated transaction records of all participants serve as an Engineering Body of Knowledge (Q-BOK). The Q-BOK is searchable and may be parsed by objects, location, chronology, etc. The analysis may also return the secure identity of persons and their intentions associated with various search entries. Anonymity is preserved until the point when a physical transaction is mutually agreed in a market. As the community grows, the system enjoys network effects such as Metcalfe valuation, fault tolerance, Byzantine consensus, etc.
Analysis of the network transactions reveals business intelligence, which may be accessed by purchasing system tokens from an exchange. New tokens can be acquired only from those who mine them through claims and validations. Financial Institutions, Insurance companies, and Enterprise would seek to access the network for the ability to apply quantitative analysis to external risk associated with the projects that they underwrite. In this process of being reabsorbed by the system, tokens are sunk. However, engineering experience from these new projects, in effect, recharge the tokens to a higher state of network value and stake.
This is a summary whitepaper from the Integrated Engineering Blockchain Consortium describing QuantChain and the native cryptocurrency called Quant. The IEBC has four specific goals:
Our first goal is to impress upon engineers that they are collectively responsible for creating the value upon which money is based. Modern civilization could not exist as we know it today without engineers to design, maintain, and renovate the infrastructure upon which society depends. QuantChain will measure the true value of engineers and works of engineering in relation to its contribution to human productivity.
Our second goal is to notify engineers, investors, and entrepreneurs that building blockchain applications specific to the engineering professions will resolve problems of intrinsicality that constrains the current rendition of tokenized ecosystems. Blockchain technology cannot reach full potential without first establishing intrinsic value in native tokens.
Our third goal is to position the engineering profession as the third financial instrument, next to Finance and Insurance, as the adjudicator of physical risk underwritten by the other two. QuantChain will reduce volatility in physical systems essential to the assurance of collateral, insurance products, securities, and tokenized assets.
Finally, The basic idea behind QuantChain is that it would be more efficient to decentralize the intrinsic value of engineers rather than attempting to decentralize every extrinsic manifestation of engineering. This whitepaper provides a framework for the development of a blockchain specific to the engineering profession thereby accomplishing the goals of the IEBC.
The Opportunity of QuantChain
Smart contracts are among the most interesting applications of blockchain technology. Smart contracts often rely on an independent 3rd party, called an “oracle” or “adjudicator” to validate a condition or event from which the software may execute a transaction. More often then not, the oracle or lineage of the oracle must involve a technical validation by an engineer of record. QuantChain provides a decentralized body of validated oracles serving the smart contract adjudication market on all blockchains.
The typical blockchain ICO pitch sounds something like this:
Meet Alice and Bob. They are small family farmers who don’t stand a chance against big global warming. Luckily, they have CropCoin, a revolutionary new token that promises to end world hunger. CropCoin is a decentralized smart contract arrangement that pays Alice and Bob money if the temperature exceeds say, 100F for 14 days consecutive days. This is good for Alice and Bob, so it must be good for you…
The problem is that the hypothetical CropCoin relies on an Oracle such as a thermometer operated by United States Weather Service to provide temperature readings. The US weather service is a centralized institution that manages thermometers, pressure gauges, sensors, satellites, aircraft, and much more. Ultimately, all of these devices are designed, manufactured, calibrated, maintained, and interpreted by engineers and scientists without which the temperature reading is invalid thereby rendering the smart contract unsecured. A similar problem exists with many common contracts in real estate, finance, and insurance and will become increasingly important for Internet of Things (IoT) and artificial Intelligence (AI) applications.
Who are the true Oracles?
It does not take too many token layers to see that the value of every cryptocurrency is wholly contingent on the value of engineers, designers, scientists, and ‘makers of useful things’. Transportation, energy, buildings, computers, supply chains, sensors (IoT) and all derivative data, goods and services (AI, AV, AR, etc) are becoming the targets for tokenization – and all are ultimately adjudicated by engineers. All of these technologies, the Internet, and Blockchain itself were created by engineers. To secure the engineers is to secure technological systems
The integrated Engineering Blockchain Consortium posits that it may be more efficient to decentralize the intrinsic value of engineers than it would be to decentralize all of the extrinsic manifestations of engineering. While easier said than done, QuantChain resolves those complexities on a dedicated blockchain, distributed ledger, algorithmic game mechanics, and a native cryptographic token.
While the world has changed remarkably in the last 100 years, the engineering profession has not. Education, regulation, organization, definitions, jurisdictions, compensation model, and even the project delivery methods are no longer fit for purpose. Engineering is perhaps the only truly global profession, yet engineers are among the least globally integrated.
The laws of physics are nearly identical at every point on earth, yet engineers are segmented in manners than have little relation to those natural laws. The current state of curation for this critical resource is restrictive rather than expansive as is required to meet modern global requirements. As such, the engineering profession is vulnerable to disruption.
The circumstances that gave rise to engineering disciplines and engineering organizations of today are being rapidly disrupted by new technology. Robotics, AI, advanced manufacturing, blockchain, cloud computing, online learning and global digital working platforms are creating an entirely new set of economic circumstances that engineers are willing and able to adapt to.
Corporations, governments, and citizens are constrained by the immobility of engineers across industries and jurisdictions. Immobility of engineers, like an illiquid asset, escalates project costs, increases systemic risk, and obfuscates congruity of responsibility. Technology is often applied to mask these symptoms rather than finding a cure. Inevitably, more risk is being transferred through the system adding additional cost and friction. These burdens are ultimately transferred to the public in the form of productivity overhead – a fancy word for poverty.
We must build flatter, more adaptive, more robust, more flexible global body of engineers with a high degree of liquidity of knowledge assets across organizations. This will allow our corporation to evolve in the role of complex system integrators and network platforms gaining network efficiencies and profits.
QuantChain will effectively and efficiently organize engineers into a global network of deployable knowledge assets for the purpose of adjudicating smart contracts in finance and insurance – in process, on block, at any time, any place, any blockchain.
The Integrated Engineering Blockchain Consortium has developed a bold and comprehensive plan based on nearly 25 years of research. While others are treating the symptoms, QuantChain develops the cures.
- Engineer makes a claim and earns Quant
- Another engineer validates claim and also earns Quant
- The combination of a claim and a validation constitutes a single transaction.
- Individual Transaction Records (TR) form quasi-anonymous identity, professional certification, and stake
- The cumulative transaction records form the Engineering Body of Knowledge (Q-BOK)
- Revenue is generated by transaction fees for quantitative and qualitative analysis of individual TR and Q-BOK.
The Quant Cycle: Sources and Sinks
- Quant is created by engineering claims and validation that form transaction records.
- Quant circulates in quid-pro-quo transactions creating additional transaction records.
- Quant is purchase by enterprise that anticipates need for Q-BOK analytics.
- Quant is expended (sunk) when accessing analytics.
- Quant is re-issued to next cycle of claimants and verifiers.
- Quant Value increases by network effects.
Balancing Supply and demand
- External entities may horde quant thus constraining demand, but also sending price signal for claims and validations to increase supply.
- Excess supply sends a price signals fueling innovation arbitrage – cheaper to build and innovate now rather than later.
Factors of Production
- Reciprocal Claims and Validations signal collaboration and iteration.
- Iteration signals innovation and technological change.
- Total number of outstanding quant measures net productivity
- No incentive to cheat on claims
- No incentive to cheat of validation
- Peer-to-peer (P2P) exchange rates are self-determinant
- The Dominant game strategy is to maximize Quant value
- The Dominant game strategy is to preserve QuantChain integrity
Value Vectors are the ways in which game mechanics create and distributes value to the players, the network, and the community at large. “Value” includes social, creative, and intellectual value contributed to the system and converted to tangible capital through predictive analytics measured by system tokens.
- A productive person makes a meaningful claim. Other productive people want to validate such claims in order to increases their stake.
- Relevant validators gain stake. Irrelevant validators lose stake.
- Collaborators are identified by demonstrate alternating claims linked to mutual transaction record.
- High quality claims attract higher quality validation – stake increases
- The longer the TR the higher the QuantChain stake and the higher the Quant awards.
- P2P measures student to teacher and teacher to student pairs – high “delta-sigma” increases stake.
- Alternating P2P TR measures iterations between collaborators – high frequency Sigma increases stake.
- The cumulative transaction records may be mined for business intelligence and scenario testing. Access to Q-BOK analytics requires an expenditure of Quant.
- Analytics provide predictions about what P2P transactions would yield optimum outcomes.
- New Quant are generated as claim and validations resulting from P2P Transactions hit the network
Individual Transaction Records
- People own their transaction records like property and will tend to them appropriately
- TRs measure positive event, not negative events like credit score
- Nobody other than the owner may write to a transaction record.
- Value of each person’s TR is proportional to quality and quantity of transactions
Cumulative Transaction Records (Q-BOK)
- Cumulative Transaction Records provides valuable qualitative and quantitative data about the entire network.
- Cumulative TR data may be parsed for geography, subject, date, predictive analytics, frequencies, demographics, etc.
- Value of Q-BOK is proportional to the average quality and total quantity of the individual transaction records.
- Q-BOK may be easily audited for corruption markers.
- The value of the individual transaction records will increase proportional to the quality of the nodes and the size of their network
- The value of the Q-BOK will increase proportional to the square of the quantity of Transaction records multiplied by the average quality of those transaction records
By nature, a game is designed to be gamed. This releases payer creativity and makes it useful and fun. However, game mechanics must also thwart unfair play. Transaction records provide security by producing consensus among a network of players. The cost of corrupting the consensus increases with every additional node in the network at some point approaching zero probability of failure
- Lazy person makes a false claim. Nobody verifies the claim = “fake news” and diminishes stake
- Lazy person makes trivial claim, lazy buddy verified trivial claim. They may earn a small bit of quant for low stake, but no P2P opportunities emerge creating stake stagnation or reduction.
- Lazy person earns Quant by false claim and immediately sells the Quant on an exchange, system recognizes this and diminishes stake.
- Lazy person is better off investing Quant in quid pro quo with a strong validator and sees stake increase.
- A smart person makes a smart claim. An irrelevant validator reduces his or her own stake. A strong validator increases his or her own stake.
- Hacker makes false claims and designs a bot to validate false claims. System recognizes activity and stake decreases.
- Trivial Transaction records attract very few P2P transactions – stake decreases.
- Bots and cheats are easy to identify, diminished stake is hard to recuperate.
- Low quality or irrelevant P2P diminished stake
- Claimant attempts to spoof transaction records – Blockchain records are time stamped – cheater cannot go back in time. A Spoof would be easy to identify.
- Reset: A bad actor is shut down (zero stake). They need to re-build stake block by block. Very expensive.
- Transaction records are anonymous until point of transaction. Phishers need to first specify transaction and reveal their TR.
- Too much effort is required to create a viable fake TR. Phisher profits break down quickly.
Quantitative and qualitative analysis requires that data exists in a pre-normalized state in order to extract meaningful observations.
Curiosumé: The formation of the unit asset and its relationship to the digital token is the basis for intrinsic properties of Quant. This begins by converting the Résumé to cryptography to predict supply, demand, and factors of production of game assets.
WIKiD Tools: A mathematical relationship among the integrals of Wisdom, Innovation, Knowledge, information, and Data.
The Value Game: is played by isolating a physical asset that is shared by many people and arranging teams such that everyone’s best is interest to preserve the asset rather than consume it.
Nobel Laureate Robert Solow estimates that technological change is responsible for 80% of economic growth as measured by GDP. Technological change is the domain of human ingenuity and reaches beyond GDP metrics. Regardless, a rational expectation is that Quant would settle at 1 Quant = 4 Dollars.
Players of the game are the customers. Therefore, everyone who interacts with the game is a customer. They must be assured that the game is fair.
The primary purpose of a network is to find each other. The QuantChain helps nodes in the network discover value and utilize it in their personal enterprise. An engineer records reputation and certifies skills and network resources commanding ownership of their economic path.
Enterprise gains access to predictive engineering knowledge for the ability to assess risk from staffing risk to technical risks associated with future project scenarios. Enterprise also gains access to a fluid global workforce that may adapt to project cycles and changes.
Early adopters include:
- Blockchain applications requiring secure and decentralized Oracles.
- Aspirational young engineers, mid-career, and senior engineers.
- Enterprise adopters would include small, independent and agile engineering firms or virtual engineering firms with a fast, nimble, and mobile work force acting alone or collaborating with established multi-national firms.
- Finance and insurance companies applying Blockchain technology to existing product lines.
- Finance and insurance companies creating next generation Blockchain products
The basic idea behind QuantChain is that it would be more efficient to decentralize the intrinsic value of engineers first rather than attempting to decentralize the extrinsic manifestations of engineering, such as finance and insurance. In doing so, the tokenized ecosystems may become more robust with decentralized oracles to adjudicate the intrinsic value required for widespread adoption.
This is accomplished by forming decentralized oracle / adjudication layer to validate smart contracts with physical impacts such as real estate transactions, IoT applications, Artificial Intelligence calibration, etc. Oracles are engineers by education, experience or other qualifying measure certifiable by their individual validated transaction records. Oracles are allocated by comparison of individual transaction to the collective transaction history (Body of Knowledge).
Ultimately, engineers are the arbiters of human productivity which is the basis of money. The problem is that their knowledge assets can only be contained by the person. This necessitates allocating real persons. In the past, the hierarchical organizational structures were most efficient in allocating knowledge assets. Today, network structures are the most efficient means for allocating such assets. The challenge then is to convert from the hierarchical org model to the networked org model without damaging the institutions that currently maintain production. The ability to perform a smooth transition is necessary.
QuantCoin does not explicitly attempt to disrupt at the grass-roots level, nor is it aimed at any particular inefficiency or misallocation, it simply attempts to prepare a project delivery system suitable for the networked economy. QuantChain point of entry begins at the single common denominator of all society and institutions – the engineers.