The financial System is made up of 5 components that act as a system. If any of these components falters or is corrupted, the whole system becomes unstable. Therefore, it may not be a good idea to attack any one of these 5 components individually without understanding the consequences to the whole system. In fact, many economic shocks have been an attack on only one of these components.
The trick to hacking the financial system will be to alter it without disrupting the fundamental purpose of each component. In order to accomplish this, we need to replicate and integrate the functions of all 5 of these components. In that way, we may be able to induce what I call “The Big Flip” toward a more sustainable set of outputs.
These 5 components are as follows:
Entrepreneurs (supply — sources)
Markets (demand — sinks)
Accounting System (inventory)
Currency (storage and exchange of value)
Institutions (to keep the game fair)
Entrepreneurs: There is no shortage of entrepreneurs. To harness and release the vast stores of intelligent, productive, and creative people in the world should be fairly easy — all we need to do is give people a game that they can win playing by a consensus set of rules.
Market: There is no shortage of work to do, the entire planet is an epic case study in deferred maintenance. New energy sources, educational programs, safe food and water, transportation, civil liberties, community building and collaborative enterprise are all desperately in demand.
Accounting system: This is where we fall woefully short. Factors of production in the current economic model are scarce land, labor and capital — these are called “tangible assets”. Meanwhile, social capital, creative capital, and intellectual capital possessed by all people are called “intangible assets” and do not appear on a balance sheet — yet are responsible for the value tangible assets!!
Guess what, this is how we are controlled. This is how we are held captive, this is how we are made invisible and how our identity is taken away. As long as we continue to buy into land, labor, and capital economics, we will remain imprisoned by an accounting system that clears our accounts of what is valuable leaving behind what is not. For example; motherhood is responsible for all taxpayers, yet does not appear on the GDP. This may sound weird, but we are accustomed to it. We need to develop an accounting system where factors of production are abundant Social Capital, Creative Capital, and Intellectual Capital, then allocate that to a sustainable market.
Currency: The dollar will soon expire under the weight of compound interest on an impossible debt load. Cryptocurrencies offer the brightest hope for a new way to articulate value. We are all very excited about this, but cryptos cannot also be called upon as the vetting institution that keeps the game fair. The recent events with the DAO demonstrate this. There still needs to be human intervention of some kind.
Institutions: Today we have laws and courts and enforcement that articulate power to ostensibly keep the game fair. This system is falling apart. Smart contracts embedded in the blockchain do not work. The recommended strategy is human adjudicated smart contract articulated on the blockchain. The best way to keep the game fair is to decentralize the human adjudicators. This is the great advantage of the proof-of-stake algorithm — people can be arranged in many real byzantine fault tolerant systems to secure a network.
Curiosumé is an analog to digital converter for knowledge assets. Curiosumé serves two important functions; the new accounting system and the decentralization of smart contract adjudicators.
1] First it establishes an accounting system for knowledge assets. This allows people to reorganize around social, creative, and intellectual capital in existing communities. Productivity is associated with innovation instead of some increasingly irrelevant association with land, labor, and capital.
2] Curiosumé decentralizes the role of the adjudicator by converting a person’s résumé to cryptography that can open and close contracts on a blockchain. The algorithm can select the adjudicator anonymously until the point of transaction upon which their ID is sealed to the blockchain. You cannot corrupt what you cannot see.
By deploying Curiosumé to a blockchain with the distinct purpose of hacking the financial system via the five components of an economy simultaneously, we may stand a chance of inducing The Big Flip to an economy based on new factors of production. Maybe a lot sooner than anyone is expecting.