Unless you just woke up from a nine-year coma this morning, chances are you’ve heard of bitcoin, the world’s first and most valuable cryptocurrency. If so, you’ve probably also heard of blockchain. Though it’s a key enabling technology of cryptocurrency, blockchain is an exciting technology in its own right, with many possible applications.
One organization—the Integrated Engineering Blockchain Consortium—sees blockchain as an opportunity to fundamentally change the way engineers work and get paid.
First Things First: What is Blockchain?
Cryptocurrencies like bitcoin are decentralized, meaning that no one party (e.g., a bank) keeps track of transactions. Rather, anyone who spends or receives bitcoin has access to a single transaction record that’s accepted by everyone. Blockchain enables this decentralization.
Fundamentally, cryptocurrency is just a ledger of transactions. That is, it’s a list of who paid what, when. Instead of being paid in actual currency, you pay with a digital IOU. As long as that IOU can be settled with real dollars at some point in the future, no physical money needs to exchange hands.
But who maintains the ledger? In centralized currency, the ledger is maintained by one party that all other parties can trust. Is there a way to maintain a ledger independent of a central authority? Yes, and it’s based on the idea of computational work.
Imagine splitting up your ledger into smaller pieces called blocks. Each block will have a certain number of transactions, along with what’s called a proof of work: a special number that fulfills a computational requirement. The idea is that this number is difficult to find—so difficult, in fact, that the best way to find it is to simply guess and check billions of random numbers. This requires a lot of computational work.
Anybody who finds such a number can put it at the end of a transaction list and publish a completed block. This block is then encoded into the next block, so going back and trying to change any previous blocks necessitates redoing the proof of work of all blocks that follow. Thus, all blocks are “chained” together in a specific order.
All participants update their own copy of the ledger as each new block is published. In cases where the blockchain forks—perhaps somebody is trying to fake or hide a transaction—users simply default to the longest blockchain (i.e., the blockchain with the most computational work involved).
Of course, there must be a reason to put in the computational work to publish a block. In bitcoin, anybody who can publish a block is rewarded with a specific amount of bitcoin. At time of writing, a bitcoin miner (someone who publishes blocks) gets about 12.5 bitcoin for every block published, which is currently worth about $84,000 USD. So there’s a lot of incentive to put the computational work in.
We’ve left out the specifics (here’s a great video that delves into the math), but the main point is this: blockchain is a method whereby multiple, untrustworthy agents can all agree on a record, without the need for a central authority to maintain that record.
Now, let’s see how blockchain relates to the engineering profession.
The Integrated Engineering Blockchain Consortium
The Integrated Engineering Blockchain Consortium (IEBC) was founded in 2015 by engineer Daniel Robles, following a whitepaper published by the National Society of Professional Engineers (NSPE). Robles, who prepared the paper, outlined the implications and opportunities of blockchain for professional engineers.
“Blockchain will not and cannot reach its full potential until the engineers get involved,” Robles said in a keynote address at CAASE 2018, the Conference on Advanced Analysis and Simulation in Engineering.
One of the key points in Robles’ 2015 whitepaper was to draw an analogy between blockchain and the Professional Engineering Protocol, the U.S. system for licensure of professional engineers. The paper proposes that integrating blockchain with the PE Protocol can result in a digital currency backed by professional engineers.
One of Robles’ main suggestions is a change of viewpoint from evaluating Return on Investment (ROI) of a project to managing project risk.
“Instead of measuring us [engineers] in terms of the stuff that we can produce, measure us in terms of the risk we can remove. Just two different ways of measuring the same thing,” said Robles.
Insuring Blockchain
Robles postulates that if you can break down a system into separate parts, and each part is insurable, then the system as a whole is insurable. Insurability is essential if you’re in the game of risk management, and Robles’ whitepaper thus outlines how blockchain itself is insurable. He breaks blockchain into three separate “tricks”:
- Trick 1: Fault tolerant consensus
- Trick 2: Multikey cryptography
- Trick 3: Decentralized ledger
We don’t have time for the details, but each of these tricks is shown to pass the insurability test: can the risk be identified, can the mathematical probability of risk be calculated, and can the consequences be identified? As each trick is individually insurable, blockchain itself—which relies on all three tricks—must be insurable.
The Capitalization Gap
Between the time a project is funded and the time a project starts earning revenue is a period known as the capitalization gap. This gap, according to Robles, is tolerable thanks to the PE Protocol.
“[The] PE stamp holds the asset in suspension during the design and construction phases, serving as a proxy for the finished project on a balance sheet,” reads the 2015 whitepaper.
It does this in a very similar way to the blockchain protocol, with three analogous “tricks”:
- Trick 1: Engineers are examined, peer-reviewed, and have a revocable license. This forms the basis for consensus among engineers.
- Trick 2: Engineers use science and mathematics similarly to a public cryptography key, with a problem solution as a private key.
- Trick 3: Engineers finalize a transaction to an indelible ledger in the form of a PE’s stamp.
With these similarities apparent, Robles suggests that a blockchain could be constructed that incorporates the PE Protocol. For example, rather than a proof-of-work being the result of large scale trial and error, a proof-of-work could be the solution to a real-world engineering problem. Such an integrated system overcomes two insurability hurdles that blockchain itself cannot: the requirement to represent real money and property.
CoEngineers.io
This concept may sound speculative, but the IEBC is confident enough to put it to the test. Earlier this year, the IEBC partnered with Blockhaus, a Swiss blockchain-based investment banking service. Together, the IEBC and Blockhaus are launching CoEngineers.io, a digital platform for the decentralization of engineering knowledge.
“We are actually building a blockchain by engineers, for engineers,” Robles said. “If we don't do it, somebody's going to do it to us, like a Google or an Amazon.”
So how does this engineering blockchain actually work? Frankly, the details are a bit sparse. Here’s how Robles characterized the system to the CAASE 2018 audience:
“Engineers will put data on this database and they'll receive a token called M, Mass. And then receive another token called Gravity. So what happens is you make a claim, and another engineer has to validate your claim. And together, that becomes an asset. And that goes to this centralized database. Now you have this token, and the engineer who validated you has this other token.
“The M token can be sold in the market. So if you're an insurance company, and you see a heavy storm season coming, then you would want to purchase these tokens so that you'll have access to the database before and after that event. That's what gives the token value. So now you're giving engineers incentive to put this data on the database. Or companies with legacy data can now put it on this database and get residuals. So in essence, you're paying royalties for engineering work, which has never been done before. Right now you're paying time rental.
“And then what happens is the IEBOK [Industrial Engineering Body of Knowledge] will be the container of all this information, and it would sell that information back—it’ll be cleansed and anonymized—sell that data back to the market, and they'll buy more tokens. So it creates a cycle. When the Mass enters the IEBOK, we retire it. So if there's too much demand then it brings more engineers in, which lowers the price. If the price is low, then people buy more data and it goes up. So it's a stable token, it's not designed for this astronomical speculation.”
The Mass and Gravity token distribution for CoEngineers.io is currently slated for November 2018.
What Does it All Mean?
It’s hard to predict exactly how Robles’ vision of an engineering blockchain will play out. Lacking a working implementation, CoEngineers.io may be just as speculative and unpredictable as, well, any cryptocurrency. But, at the very least, Robles is adamant about creating a solution that will bolster the engineering profession.
“It's designed to work by engineers, for engineers. Not by Wall Street, for Wall Street,” he said.