Quant vs. BitCoin

Q1: Are the coins mined?

A1: No. Not in the conventional sense. Currently QuantChain is a proof-of-stake, not proof-of-work. Presently the Quant sit on the BitShares blockchain and are distributed by the QuantChain creator, Dan Robles. The screenshot below shows the state of my chain:

Q2: Scarcity Since the doc says there is no scarcity, are they just assigned based on our Project work?

A2: Yes, tokens are currently assigned arbitrarily on a per-Participant (Project) basis. Also, the number if Quant is finite and has a total pool of 223,300,000,050,980, (two-hundred twenty-three trillion, three-hundred billion, fifty-thousand, nine-hundred and eighty) which apparently was the magnitude of global debt as measured in 2015 when the Quant was initially cast. See screenshot below:

Q3 Energy intensity: Is the energy intensity of BitShares greater than the energy intensity of a Visa transaction? How does it compare to mining BitCoin? I would like to understand the energy intensiveness of the coins maintained on the BitShares blockchain and transfers/transactions. 

A3: I presumed that E_BitShare_transaction < E_Visa_transaction < E_BitCoin_transaction, and did a little research and found what appears to be an authoritative article with various pros and cons. I did not see any discussion of relative energy intensities, so will do a bit more digging by attempting to engage those who maintain the BitShares witness nodes.

Moving Engineering Tokens into Mainstream Insurance Economies

Condominium Structural Engineering Scenario: A pool of engineering experts [Participants] are participating in The Innovation Bank [TIB], i.e., accepting digitally blockchained tokens in mutual exchange for opinions and recommendations.  A condominium (B) association [Client] has a structural concern for which they require the opinions of several types of engineers. However, after receiving quotes from several engineering firms with good reputations, they realize that they cannot afford the rates as measured in United States Federal Reserve Notes (D)  The Client goes to TIB exchange and purchases a given amount of Engineering Tokens [Quant, Q] that they spend on various expert Participants, say, civil, structural, geotechnical, construction, legal, etc. How many Quant does the Client purchase? What does the Client receive for this purchase? 

Concerns over Consequences: As with fiat currency, liability must be proportional to the number of Quant that the Client negotiates with TIB, which holds D in reserve and in exchange distributes Q to each Participant. As a consequence of the networked nature of TIB, how does liability for eventual structural failure or perceived safety of C become insulated and distributed as a result of the "arm's reach" nature of the disparate  opinions and recommendations of the Participants? Conversely, how does persistent structural soundness of C result in reward for the Participants? Is liability proportional to the number of Quant that the Participants convert to fiat currency [$], and therefore shared across TIB?  The latter condition would constitute a naturally adjusted "insurance product," favoring high-risk mitigation over low-risk mitigation thereby generalizing and organizing risk removed from complex systems. 

This is an extremely important construct because insuretability is the catalyst of investment.  Is there anything here to associate token allocation (proportion, velocity, vectors, etc?)  and systemic risk reduction?   

What is missing is a time element and a formal relationship between the relative values of the currencies. Can we set up a ratcheting model for the Quant vs. Dollar Q:$?

How do the Participants see their actual value increase as well as the value to the Client? The three variables must be Q, D, B., where Q is Quant, D is USD ($), and B represents livable square feet of the condominium or generally perceived value of the condominium.

The Participants on the Condominium Project would need to agree to a Byzantine's General agreement where each accepts a portion of the liability for the other participants such that the total liability sums to unity. 

The answer to the question also involves the Bargaining Problem whereby the Client purchases $10M of coverage for $1M. The Participants must also invest less than they receive in return. Participants know that each Quant is equal to 

Now for each Participant, B = $0: the condominium has no immediate value to each Participant initially as no Participants live in the condominium. For the Client, Q = $0.

So we have 

Fundamentally, in order for an economy to move, all entities involved must relinquish items of low value in favor of items of greater value (Nash, 1950).

How many dollars are there?

Is There Really No Money?

While experimenting with a cryptocurrency we are calling the Quant, and after watching Ray Dalio's video How the Economy Works, the thought, "How many dollars are there?" occurred to me. Let's look at an example: 

A Guy Walks Into a Bar

Guy walks into a bar with $1.00 and buys a beer. After the transaction, the Guy has -$1.00 and the Bartender has +$1.00. Running an accounting analysis on the transaction, we find that

-$1.00 + $1.00 = $0.00.

So one entity's cost is the other's income. If the accounting is done properly, the net transaction sums to zero. 

Doesn't this simple scenario illustrate that there are no dollars, implying that there really is no such thing as money? Probably not. Of course there is money. I can open my billfold right now and see it. I can open my online banking app and see it. 

Is Debt Money?

But how many dollars are there actually? How many Euros, Yuan, Rubles, etc., for that matter? Do we just add up all of the money in all of the cash registers and bank accounts and that's our answer? Could be. But what about all the debt? For example, if someone owes a quarter million dollars on a mortgage, is this negative money? Sure. Okay, so let's just add up all of the debt (negative money) and all of the assets (positive money), and THAT'S the total amount of money, right? Maybe, but probably not. Let's explore the subtleties of how money is created and destroyed.

Interest as Money Fountain

One of the alchemist's tricks to "making more money" is of course to either charge or pay interest on a given balance. For example, I just made about $0.11 last month from my various conventional banking savings accounts. Where did this money come from? I appears to have come from the belief that most of us hold: in the future, there will be more money. This belief appears to be the self-perpetuating myth that allows money to persist.

Money's Purpose

This belief gives most people an aspiration to earn or otherwise acquire money as a means of acquiring both necessities as well as luxuries. The acquisition of necessities of course increases one's chances of perpetuating one's genes to the next generation, thus perpetuating (typically) a quest for money. The acquisition of luxury items diversifies the economy and may or may not increase one's chances of gene propagation. 

How Much Money is Enough?

But how much money is "enough?" For most, even the wealthiest among us, there is really no such thing as "enough." Since money is used more or less as a technology or tool for enabling the existence and propagation of various sectors of the economy, more money has the ability to accelerate one's particular sector of choice: a farmer can buy a bigger better tractor, a fisherperson can buy a bigger net, an oil company can build a better drill, etc. 

Are Dollars Like Electrons?

Returning now to our original question of "How much money is there?" perhaps the answer lies close to the Wheeler-Feynman One Electron Postulate that rather than seemingly countless electrons in the matter around us, there is only one electron. This notion, while at first seemingly ridiculous, may help explain why all electrons have the same mass. So just as the question regarding the total number of electrons may be moot, so, perhaps is the total number of dollars. 

Taking this dollar-electron analogy a bit further, take a moment to consider the Tesla-Edison battle, that is sometimes referred to as "The Current War." Edison pushed for DC power, where electricity, as carried by electrons in metals such as copper and aluminum, flowed in one direction around a given circuit, whereas Tesla espoused and eventually prevailed with the help of Westinghouse (and physics) to promulgate an electric grid using AC power. In AC power, the voltage (electrical pressure) fluctuates sinusoidally between a positive (pushing) and a negative (pulling) value. As the voltage fluctuates back and forth (or up and down), or in whatever combination of complementary directions you might like to think of voltage as moving, the electric current also fluctuates. So when AC power moves through an electric circuit, the electrons, on average, remain stationary. They go nowhere, just back and forth, sort of like "the wave" you might see in a sports stadium. Sure the participants might leave their seats momentarily, but no one actually goes anywhere. 

So maybe just like the electron in the wire conducting electricity, and the sports fan participating in the wave, the dollar merely moves back and forth among participants in the economy, but never really goes anywhere.

A One-Dollar Economy?

Let's imagine for a minute that the Wheeler-Feynman One Electron Proposition is correct and apply this same analogy to the US economy. What would an economy look like that had only one dollar? The "one percenters" would share about $0.50, the next four percent would have a quarter to split, etc. So rather than having our zeros to the left of the decimal point, $1,000,000.00 (one million dollars), $1,000,000,000.00 (one billion dollars), $1,000,000,000,000.00 (one trillion dollars), etc. the zeros would be to the right, right? If we assume that the global economy consists of one hundred trillion dollars ($100,000,000,000,000.00), then the the trillion dollars that Amazon is worth, would now be worth a penny ($0.01), and that beer that the guy bought would be worth a one trillionth of a cent ($0.00000000000001). What's the big deal? As long as all transactions add to zero, we're okay, right? But what would a one-dollar economy "fix?" The important economic consideration of course that would persist would be the distribution of wealth as discussed at length by Picketty. Indeed, it is wealth distribution, or rather the disproportionate bimodal distribution of wealth that concerns many economists, sociologists, and historians. See, for example Harari's 21 Lessons for the 21st Century for his views on the so-called "irrelevants" that the emerging technocracy is creating.

Scarcity Creates Value in the Cryptocurrency World

Circling back to the Cryptocurrency my colleagues and I have created, I recently noted that there are 223,300,000,050,980 Quant in the "Max Supply," which was the estimated global debt in 2015. As these digital tokens "get spent" and diffuse throughout the technosphere, what will make them "valuable?" For example, what would someone do to earn a Quant? For that matter, what makes dollars valuable? The answer of course is a combination of the dollar's utility to obtain life-sustaining commodities and the relative scarcity of dollars. We have created a society where dollars represent the results of our efforts, our labor, and moreover our time, which is without question a finite and dwindling resource.

Creating Cryptocurrency Relevance

In order to maintain relevance, it appears as if any cryptocurrency must tied to another currency such as the dollar. This is typically how BitCoin is measured. The dollar, which was previously pegged to the finite amount of gold, is now pegged to the apparently finite amount of oil via what is typically referred to as the petrodollar. Without a physical benchmark in "the real world" money quickly loses its meaning. Thus the initial rules of Quant distribution are being tied to a monthly "salary" of 10,000 Quant per month of participants who are then allowed, enabled, and encouraged to spend their Quant in any manner they wish. Will the Quant become fungible? Let's play the game and see.