A simple model to make sense of the proliferation of distributed ledger, smart contract and cryptocurrency projects

Richard Gendal Brown

Just when I think I understand the cryptocurrency/block chain space, I realize I didn’t understand anything at all

Four recent events have made me realize that I don’t understand this space anywhere near as well as I thought I did.   But that’s good: it means I’ve been forced to come up with a new mental model to explain to myself how all these projects relate to each other.

TL;DR: the two questions to ask about a “fiduciary code” requirement are: who do I need to trust and what am I trusting them about?

Who do I trust

A simple model to capture the essential differences between some consensus platforms

The rest of this article describes the four events that influenced me to draw it.

Event 1: Nick Szabo’s “The Dawn of Trustworthy Computing” Article

In his recent article, Nick Szabo introduces two really helpful terms to explain what makes systems like Bitcoin particularly noteworthy.

View original post 1,177 more words

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UBC Report Findings Show Better Options Than Site C Dam

Keywords: UBC, Site C, Hydro, Dams, Energy, Electricity, Renewable Energy, Employment, Jobs, Environment, Sustainable, Conservation, Water, Governance, British Columbia

In a November 23 report issued “by a team of researchers led by Dr. Karen Bakker ” finds “Site C creates fewer jobs and has larger environmental impact.” (1)

“[…New Research Report: Comparative Assessment of Site C Employment (17 November 2017)

A new UBC report compares employment numbers from Site C versus the alternatives, and concludes: stopping Site C will create a larger number of sustainable jobs in the province, including in the Peace Region.

UBC’s Program on Water Governance has conducted a detailed comparison of employment generated by Site C versus the alternative portfolios put forward by BC Hydro and the BCUC.

  • Our analysis indicates that terminating Site C and pursuing the alternatives results in modest job losses in the short term, and substantial job gains in the medium and long-term.
  • These jobs are generated by remediation, conservation, and alternative energy projects.
  • Terminating Site C and pursuing any alternative portfolio creates a higher number of sustainable jobs in the province, including in the Peace Region.
  • Site C provides the least jobs per dollar spent.

…]” (1)

References:

  1. SITE C DAM

Renewable Energy and Heat Pumps – Net Zero Energy by Design

As a mechanical engineer I spent 17 years in design of mechanical systems. Always seeking the best solution given budgets and adhering to efficient design principles. Often we can combine systems by hybridization, where two technologies come together in a synergistic match. I have used hybrid technologies, using ground loops and air-air fluid coolers, with heat pumps successfully in the mechanical design and construction of a number of buildings.

While wind energy may be harvested, it is not always available. Some regions get more wind than others, and there may be governmental or civic restrictions. For renewable energy, solar may be a better option than wind, even though it is only available during the day. In either case some form of auxiliary power will be required, such as batteries,  grid connection, fuel powered generator, or hydro-power.

The use of heat pumps allows for the provision of a number of heating and cooling devices which may be connected to a central circulating building loop. As heat pumps have operating temperatures generally between 40F to 90F, although it may vary depending on heat energy source, such as air, water or ground.  Air temperatures may vary during the day and season. As air temperature drops, heat pumps lose efficiency. We can see this in the following figure. (1)

air-source-heat-pumps-cold-weather

In the case of geothermal heat pump system design, there are some options. One method is to run a water source such as a pond, river, body of water in an open loop design,  in a closed loop method using an process waste heat stream or ground coupled system. Either system is usually connected to a heat-exchanger to which is connected a second closed house loop. The house loop is controlled to either discharge or gain heat from the geothermal loop.

I am attaching  a blog post (2) from 2007 where I made a comment in 2009. This blog post is still getting comments. I believe such systems can be designed and constructed and would contribute to a “Net-Zero” building systems.

I am a lawyer who has been interested in the subject of energy conservation since the seventies. Back when we had the first OPEC crisis, I thought this country would head in a direction away from the consumption of huge quantities of oil and gas. It didn’t happen. Now of course, our thirst for oil has been the primary reason for a preemptive war with no end in sight. Moreover, peak oil seems to be here. And so far nothing much seems to have changed. But the public, may at last be ready for something different.

There are some real promising things happening with new solar energy systems and with wind turbines. It is long past due. But I still keep wondering whether we are approaching this problem of solving our energy demands the right way. With both solar and wind systems all technology seems to be headed toward the creation of electricity. Electricity is definitely useful but often inefficient.

Heating and cooling costs are about 60-70 percent of home energy costs. It is far more cost effective to use heat transfer than to make heat. Water source heat pumps are 300-400 percent efficient while the best ordinary HVAC systems might be forty percent efficient. (Are they that much?) What if you could even vastly surpass the efficiency of a water source heat pump. How? By making the wind pump the water instead of an electric pump.

Why not use wind to its best advantage? Make the wind do what it has done very efficiently for hundreds of years: pump water. Make it pump water from a warm place to a cold place and make it store the heat where the heat is needed or wanted. In the winter pump the heat from under the ground into the house. In the summer pump the heat from house into the ground.

To do this, because of the wind’s variability, one would need a huge (?) thermal sink in the house to slowly release the heat transferred from underground to the heat sink or to transfer the heat from the house to the ground while the wind was not blowing.

A four part system. A wind turbine. A pump. A closed loop of pipe. An interior thermal sink.

It is fairly well known that in most climates, five or six feet below ground, the temperature is a about 55 degrees. I think it is quite possible to take advantage of the geothermal underground temperature by using a wind turbine to pump water from underground into an interior thermal sink. If a large enough volume of water could be circulated to where the interior heat sink reached 55 degrees, I think such a home’s heating and cooling costs would be drastically reduced.

If the large thermal sink could get the house temperature substantially raised in the winter and substantially cooled in the summer, very little additional energy might be required to bring it to a desirable temperature with the use of a water source heat pump. A water source heat pump would work in tandem very well by using the internal heat sink as a convenient source to operate a water source heat pump.

My idea would be to use a vertical wind turbine on the roof coupled to an Archimedes screw to pumps and circulates water through the closed loop. The vertical wind turbines seem to need less wind, have more torque, and are quieter. I also think that from an architectural point of view, they would look much more attractive, especially the ones that look like spinnerets. They also take advantage of a sloping roof which increases wind speed.

I also think the Archimedes screw would be an ideal pump. It requires no gears or lubrication and could attach by a straight shaft to the vertical wind turbine. An Archimedes screw would be very inexpensive as pumping systems go and extremely reliable as there is really nothing to break.

I have other ideas about roof design and about turbine design for greater efficiency. I also have ideas about the plumbing. What I would like to see is whether there are people out there who think this idea has commercial merit and if so, how we might go about making wind driven water pumping for geothermal transfer a success. We would need some engineering and architectural expertise and some ability to fabricate the wind turbines and pumps.

I look forward to responses.

Duane Tilden said…

I have been looking at the latest responses and it seems to me there is some confusion about this idea.

Firstly, heat pump technology, as pointed out achieves it’s high COP’s from the phase change. It is through the leveraging of the refrigerant phase change from a fluid to the gas phase where heat energy can be obtained from low temperature heat sources. This is how geothermal heat pumps can obtain heat energy from relatively low temp sources such as the ground where nominal ambient water temp would be at 55F and deliver hot water at temps of 90F to 140F.

Alternatively heat pumps can be used in air/air, air/water, water/air and water/water configurations. These are generally stand alone devices where in a properly engineered installation do not require supplemental heat sources.

Wind energy is a separate sustainable, environmentally friendly application. In my opinion the OP’s idea of using wind energy to move water around for a heat pump application is marginal and likely too capital intensive to realize any real benefit. Also, it is just too restrictive, in my opinion.

Wind energy converted directly to electricity, or other dedicated pumping applications where electricity is not available is best (water pumping up to a reservoir in agricultural or power generation schemes for example). There also may be some merit to the idea of storing the energy as compressed air, but the amount of heat generated would not be significant, usable heat source. Try heating your home with a candle.

Electricity is used by a wide range of applications, so why not use the wind energy to best effectiveness? The operation of the compressor in the heat pump and the pumps to run the water loop(s) require electricity, so do common home appliances.

There may be some applications where the proffered idea would make sense, but not likely widely applicable for single family residences unless you have a large property and money to burn.

SEPTEMBER 26, 2009 AT 10:44 PM

 

References:

  1. heat-pump-effective-temperature-range/
  2. wind-turbine-heat-pump-geothermal

Hybrid Electric Bus uses Hydrogen as Fuel

“[…] According to Paulo Emilio, this is the most efficient hydrogen bus in the world. “A European company tested a hydrogen bus in ten cities, which consumed 25 kilos of hydrogen for each 100 kilometers; this month, the same company launched an improved version, with 14 kilos of hydrogen consumed for each 100 kilometers” where as “our bus consumes just 5 kilos of hydrogen”, he says. […]”

via Literally, a green bus

Are Cryptocurrencies a Fad or a Revolution in Finance?

Duane M. Tilden, P.Eng
November 5, 2017

As I was walking to my weekly bridge game at the local club, I was pondering my newfound interest in cryptocurrencies, Bitcoin, Ethereum, the block chain, and related topics such as mining, smart contracts, ICO’s; the list goes on. I also thought about the value of things from my childhood, like marbles, hockey and baseball trading cards, comic books, coins, stamps, post cards, and other things that I have collected. All which created markets and gained extrinsic value over time, and could be held speculatively. I then asked myself, “Are cryptocurrencies a passing  fad or here to stay?”

What Makes a Currency Valuable?

Some things, such as coins may be made of a valuable base metal alloy, like gold, silver, nickel and copper. Coins are currency, and as such a perfect example to assessing intrinsic value and extrinsic value. In the past coins were minted with higher contents of the base metal alloys.  The metal content gave them an intrinsic value due to the metals rarity and utility. In time, these metals gained value, to the point where it cost more to mint a coin than it was worth.  People would then begin to horde or “mine” the coin for its intrinsic value which was greater than it’s face value as a currency.

metcalfe_curve

Figure 1. The Metcalfe Curve (1)

Extrinsic value, however, could be likened to what we would consider the “fiat” aspect of a currency. As currencies have moved away from a gold or silver standard, the value of money is largely based on consensus. Markets are also consensus driven, without a universal agreement or set of rules, there could not be trade. This is the reason for the development for money or currency. I work and get paid in the common unit of currency, which I can then use to buy and rent goods and services.

Currency and Security

Until recent developments, Governments and their agencies in partnership with banking institutions have generally controlled currency and financial markets. The operation of the economy is the basis upon which society functions. Money exchanges hands for goods and services, including wages. One currency usually denominates value in a physical market. However, these markets can be subject to various forms of attack or manipulation. Physical money could be counterfeited, transfer of money and assets could be lost or stolen, other forms of fraud could occur where one loses their assets.

Another form of attack is personal, or on the individual. Local regulations and taxation laws require valuation of assets and income which are held by the individual to be known to the public agency and could be subject to economic deprivation and restrictions. This is an instance where individual privacy is violated in built-in, systemic and semi-transparent.

Examples of this are everywhere, such as income tax, sales tax, medical tax, alimony and child-support, retirement and pension plans, insurance. If you owe the government money in a disputed case, they often will violate an individuals rights to deprive them of assets, such as money in bank accounts, garnishee of wages directly from the employer, denial of services, loss of principal residence and other such actions.

Most of the money that we earn, own, or spend is being tracked by the government. There are lots of taxes and lots of “rules” made by the big boys. Unfortunately, the present financial system is often disadvantaging us. Why? Because it often collects more than it provides. (2)

Consensus and Fiat Money

Since a currency in today’s world generally consists of a consensus agreeing in a trading market place, then the truth is anything can have value. As the internet has opened up trading across international borders, and companies have sprung up in the financial market place to provide services beyond their physical location, often catering to the world. I can purchase electronics from China and have them delivered to Canada on eBay, using PayPal or a credit card to exchange in their accepted currency. Buy and sell ads have sprung up, such as Craigslist and Kijiji , allowing wider ranging access to markets at a greatly reduced costs as compared to paper advertising in magazines.

Computer users over time had an edge over non-users, as information became available in a vast manner over greater areas. Shopping for the best price of a desired item, good or service can be searched for on my laptop and obtained at a fair cost. No longer does one have to go out and purchase a paper magazine or ad book, in their search. We now can now open a browser on our computer, or digital device, ask a question on a search engine and sort through a selection of answers. Phone numbers, addresses, reviews, prices, hours of operation, names of staff, job openings and more information is all available quickly and efficiently.

Enter the Bitcoin, blockchains and crypto-currencies. In one report recently obtained, sourced from the international Engineering Firm ARUP (2) it has been stated about Bitcoin, a technology introduced by Satoshi Nakomoto.

At the start of 2009,when the world was in the middle of a major financial crisis, a paradigm shift in technology quietly made its debut. That technology is called Bitcoin, and it’s the biggest innovation in finance in 500 years, and certainly the greatest invention of the 21st century so far. (3)

Cryptocurrencies Create Markets

Beyond creating an anonymous system of financial transactions and storage, crypto-currencies are creating new markets of value and trade. There has been a recent wave of new crypto-currencies coming on the market, most of which have issued whitepapers, and have sales landing pages which outline the details about structure, their markets or business plan, how to participate, and their projected timeline.

In my opinion, issuing tokens for sale is very similar to crowd-funding, which may also be likened to buying or selling shares on the stock market, without the restrictions or regulations necessarily placed on participants. Whether or not these activities are legal may depend on local jurisdictions. However, as long as no laws are broken for the purposes of making transactions in a business manner, or the proposed ecosystem,  then personal privacy of participants and security should be secured to all qualified participants, which are traits of a crypto-currency like the original Bitcoin.

The tokens offered in the pre-ICO sales are generally intended to fund the business operations, which, if all goes well, will turn a profit and be able to provide token based services. Details of the venture and how proceeds from projected profits are to be distributed are usually outlined in the white paper. Tokens may be able to be openly traded as a currency, depending on various applicable rules and regulations which may apply and being able to be listed on the various exchanges.

For example a current energy token on the market, PowerLedger.io (4) –  is a blockchain-based peer-to-peer energy trading platform enabling consumers and businesses to sell their surplus solar power to their neighbours without a middleman.

<From a Media Press Release>  Power Ledger is based in Perth and uses blockchain technology to allow households to trade excess solar power over the electricity network.

Major Australian power retailer Origin Energy recently announced a three-month trial with Power Ledger to explore the benefits and challenges of peer-to-peer energy trading across a regulated network.

“Blockchain technology and cryptocurrency underpins our business offering and we are excited to be working with Perth-based DigitalX” said Power Ledger Chair Dr Jemma Green.

POWR tokens will be offered via the Ethereum cryptocurrency network in an uncapped price offer, meaning the tokens’ final price will be determined by the market demand.

“POWR will be the Ethereum blockchain protocol token required throughout the Power Ledger eco-system that can be converted to ‘Sparkz’, which is the crypto-currency we have set up for users to trade electricity using the platform,” said Dr Green.

As part of the engagement,DigitalX will introduce cryptocurrency investors to Power Ledger in exchange for a fee which consists of a mix of Ether (ETH) and POWR tokens.

“Blockchain-enabled innovation is disrupting traditional industries and digital currency is changing the way companies access capital. DigitalX is pleased to be able to facilitate this quantum shift in traditional mechanisms for accessing funding,” said Mr Travers.  (5)

Generally speaking, however, most crypto-currencies will have many advantages over fiat currency or stock markets. For one, their trade is not restricted to one market, or country to operate. Beyond anonymity one can store value in one token, exchange it for another, buy services on a network, or hold it speculatively. There are the other aspects related to smart contracts and the block-chain where physical assets or other attributes, such as counting operations of a machine or device can be linked to a token. In fact the possibilities seem endless, only bounded by the limits of imagination.

Cryptocurrency Offerings and Exchanges

Every day I receive more notifications regarding new offerings on a multiple of news feeds. Many of these offerings look good and viable. There are many new white-papers to read, and some are quite technically advanced and detailed in outlook and projections. As more cryptocurrencies are introduced into markets and traded on platforms investments will be expected to continue.

As cryptocurrencies are rapidly gaining acceptance and appeal, the task of evaluating all emerging offerings would be odious without methods of categorization, comparison and establishing legitimacy. At this time, according to the coinmarketcap.com, there are 1257 Cryptocurrencies with a total market cap of $199 Billion USD currently listed on exchanges. Currently there are 121 active exchanges trading cryptocurrencies (5) and in the last 24 hours there was a “volume of 614,489 BTC and $4,396,051,516 on 5915 trading pairs” (6).

Other resources of current token or coin offerings and other related information can be found on various websites, including tokenmarket.net and coinranking.com.

The Future of Cryptocurrency

At the current pace of innovation, new offerings, and investment as determined by market capitalization, it does not appear that current rapid growth in cryptocurrencies  slow down. Rather, examining current trends in cryptocurrency and comparing to models, it appears that we are in the innovation and early adoption phases of a technological innovation, as seen in figure 2. (7)

TechAdoptCurve2

Figure 2. Technological Adoption Curve (7)

In addition to the known bell curve of adoption, the value of the networks being formed on the internet, obeys Metcalfe’s law, see figure 1.

Metcalfe’s law states that the value of a telecommunications network is proportional to the square of the number of connected users of the system (n2).

As we can surmise from the effect of Metcalfe’s law as it applies to the development of cryptocurrencies is that we are currently in the earlier phases of value development, which will be expected to grow at an exponential rate associated with a nodal peer to peer model.

220px-Metcalfe-Network-Effect.svg

Two telephones can make only one connection, five can make 10 connections, and twelve can make 66 connections.

For innovators and early adopters these are exciting times as the number of participants continue to grow, and more capital continues to be invested in fledgling commercial enterprises. New business plans for ICO and Token issues are being issued every day. There are technical developments coming, apps, games, lenders and financial instruments, as well as new types of Tokens being issued with a variety of proof’s or calculation methods. Blockchains technology is changing to become increasingly efficient to handle ever increasing numbers of transactions. At this time there appears to be no limit to the possible applications of blockchain technology.

combined_curve

Figure 3. Combined Curve – Crossing the Chasm (1)

[…] The combination of Moore’s and Metcalfe’s laws explains the rise of information technology and the growth of the Internet as we know it today. […] And finally, in an unprecedented apotheosis, by combining the three preceding charts and by ― I have to admit ― visually cheating with axes, scales, and representations I came to the observation that the chasm is actually the point where the transition from a technology driven business to a value driven business needs to take place ― and if this doesn’t happen, that any new product or technology introduction is doomed to fail.

Disclaimers:

Expect that there are traps and pitfalls, some ventures may be fraudulent or simply fail. No guarantees on individual outcomes of ICO’s or other value propositions, and, as in all markets expect that there will be both successes and failures.

Expect, in various regions, government control and regulation, which may attempt to prevent or limit participation by populations or otherwise affect and manipulate markets.

Every participant in any new market, such as a cryptocurrency,  is advised to perform their own due diligence and research before investing capital.

No guarantees or warrantees are implied or expressed by the author, who, may at any time, hold vested interests in a variety of cryptocurrency tokens for speculation or other purposes.

End

References

  1. The Metcalfe Curve
  2. 7 Trends in Cryptocurrency Entrepreneurs Should Know
  3. Blockchain-Technology (for the Built Environment)
  4. How PowerLedger Works -Snapshot
  5. PowerLedger.io Home Page
  6. cryptocoincharts.info
  7. The Early Days of Cryptocurrency