Our electricity-generating systems are in the process of being overhauled. It is very much a case of out with the old and in with the new as the OECD turns its back on coal. The OECD envisions decarbonizing electricity generation using a combination of wind power, solar power, and biomass instead. Focusing on CO2 intensity alone has led to a number of bizarre outcomes such as transporting wood pellets from North America to Europe for industrial-scale power generation; covering hilltops with wind turbines; and fields with solar panels. It is difficult to find an environmental reason in these measures. Researchers at ETH Zurich wanted to develop a more holistic approach to characterize various generating technologies, but they were confronted with a challenge. How does one compare nuclear power with wind and coal power? This is like comparing apples with barley and potatoes. Multi-criteria decision analysis offered researchers a means of quantifying all of the relevant information for the task. They began with the three pillars of sustainable development:
  • Environment
  • Economy
  • Society
In the hierarchy that that they developed, these three universally accepted measures appear as a top category level. However, researchers soon recognized that measures, such as Scalability, were missing from their scheme. Little good can come from discovering a utopian electricity supply, if there is only enough of it around to power a tiny fraction of the world’s cities. Geothermal power is a good example. Even with today’s technology, engineers can only deploy geothermal power in areas with active volcanic activity like in Iceland and New Zealand. This is not much use when it comes to powering cities like New York and Paris. “Resource,” therefore, was introduced as a fourth category in their hierarchy in order to measure the size and availability of a given energy resource. Recognizing that not all electricity is equal, and at risk of sounding like Donald Rumsfeld, researchers have identified three main classes related to the production characteristics of electricity:
  • Class 1:  Electricity that is produced when we want to use it.
  • Class 2:  Electricity that is produced when we do not want to use it.
  • Class 3:  Electricity that is not produced when we want to use it.
Class 1 electricity is the ideal. Class 2 electricity, leaves suppliers with just three choices: export the surplus, store the surplus, or waste the surplus. In each eventuality, consumers would accrue and pay a significant cost. Class 3 electricity either results in rolling blackouts or requires a back-up system. Both outcomes are costly for the consumer. In the view of researchers, policy makers have greatly undervalued the production of electricity when we need to use it (Class 1). Therefore, they introduced a fifth category of the “Grid” to the hierarchy. The Grid category provides a means of quantifying the controllability of supply. As part of the multi-criteria decision analysis (MCDA), researchers further delineated 12 sub-categories, called criteria, in order to characterize the most essential aspects of an electricity generating technology (see Table 1). Of course, there is bound to be some overlap and even gaps in the process, but they have endeavored to capture most aspects of a functioning energy system. Given this information, would anyone argue that the cost of electricity is not equally important to CO2 intensity? According to researchers, there seems to be little value in lowering CO2 intensity, if high costs for alternative electric power spreads “energy poverty” and erodes economic well-being. Equally, there seems to be little purpose in a low CO2 supply, if it destroys other parts of the natural environment. Using a structured MCDA hierarchy, researchers sought to capture all of these variables. Energy Matters Electricity Technology Survey (EMETS) Table 1 Energy Matters Electricity Technology Survey (EMETS) design showing 5 categories and 12 criteria against which 13 technologies were measured. The example shows how 12 criteria may be applied to coal, but may equally be applied to gas, biomass, etc. *ERoEI (energy return on energy invested), is a measure of efficiency and considers the full energy production cycle. In conventional MCDA, stakeholders are often asked to express a preference at the criteria level. The approach researchers adopted was rather different. They sought, instead, to assign scores to each criterion where a 1 = good and a 10 = bad. For example, low fatalities, low CO2 and high availability are all regarded as “good.” Nineteen participants, mainly engineers, physicists, geologists and geophysicists assigned scores, using professional judgement and not preference as a guide. The results, summarized in Figure 1, show 13 technologies in rank order based on total mean scores. Figure 1 Thirteen electricity technologies arranged in rank order according to their total mean MCDA score selects 3 clear winners - nuclear power, combined cycle gas, and hydroelectric power. Outright losers include all of the new renewable technologies. In the middle, Geothermal and diesel, both niche technologies, and coal - cheap, abundant and controllable - are down-rated on health and environmental grounds. In order to display results for individual technologies, researchers developed a 12-axis spider diagram (see Figure 2). The spider diagram for nuclear power shows that it scored well on all criteria and that is why it emerged, albeit narrowly, as the top technology. Hydroelectric power displays an uneven distribution on criteria scores. It has performed less well on resource availability, because most good hydroelectric sites are already in use and less well on environmental costs and environmental footprint since hydro reservoirs destroy natural habitats and occupy a substantial area. The spider diagrams for gas and coal (top right Figure 2) shows how each perform well in the Resources, Economics, and Grid categories and less well in the Health and Environmental categories. Unsurprisingly, coal performs particularly poorly in terms of health and environment. The diagram highlights the similarities and differences between gas and coal. The slightly poor performance of gas in the Health and Environment categories is offset, however, by good performance in the Resources, Economics and Grid categories resulting in a total mean score that is comparable to nuclear and hydroelectric power. Figure 2 Spider diagrams for 6 out of 13 technologies surveyed. Researchers developed a 12-axis spider diagram, one axis for each criterion scaled from zero in the center to 10 at the circumference. The ideal electricity source would be represented by a circle with a radius of 1 (the best score in each category). The axes are arranged according to hierarchy. The total mean scores are shown in the panel headers. Wind and solar photovoltaic systems have similar shapes in the diagram, performing well in Health and Environment and poorly in Resources, Economics and Grid categories. This shape is common to all of the non-combustion, renewable technologies including wave, tidal, and solar thermal energy. The wind and solar spider diagrams are effectively a mirror image of coal. To sum up, the structured, hierarchical MCDA provided researchers with a means of comparing and quantifying electricity generation technologies. Their survey of 13 technologies sampling expert opinion produced three clear winners, namely nuclear power, combined cycle gas turbine, and hydroelectric power. This should come as no surprise to anyone since these technologies are already widely deployed, known to be among the safest available, and already proven to work together to provide a stable and reliable grid at low cost. What is less easy to explain is why countries like Germany, Switzerland and France have plans to close down their nuclear power stations and replace them with wind and/or solar power that the survey suggests are vastly inferior, at least compared with the present available technologies. About the authors:  Dr. Euan Mearns has a PhD in isotope geochemistry. A former academic, businessman, investor, consultant and energy blogger, he has been employed as a Senior Researcher at ETH Zurich since January 2018.  Dr. Didier Sornette is Professor on the Chair of Entrepreneurial Risks at ETH Zurich since 2006 in the department of Management, Technology and Economics, and a professor at the Swiss Finance Institute. Sornette is also associated with both the departments of Physics and of Earth Sciences at ETH Zurich. 

But it’s difficult to think about value when we have no buoy for understanding it outside our traditional lenses: for example, our time, our job, and what others tell us they are worth in cash. This, largely, is the world’s paradigm for value so far. But understanding what value really means changes everything—and will be at the center of the decentralized revolution in global coordination that will unfold over the next decade. So, where do we begin?

Let’s start with gold.

Gold is an inherent value. When backing a market, gold allows us to grow a balanced economy well into the trillions. But why does it allow for massive stable markets to form around it? It is gold's permanence that creates stability. We understand that gold will always have value, because it is inherent in all of us, not just in one part of the world, but everywhere, not just today, but tomorrow and for the long haul.

In the 1930s when the gold standard was removed, we learned that the U.S. dollar didn’t need gold to back its economy to flourish. We learned that it was just a symbol for U.S. citizens to decentralize their coordination around the United States economy.

It turns out, common agreement is a philosophy for building shared economy.

And so it seems inherent value is a marker for us to begin exploring what the future could look like—a future beyond gold and the existing realm of credit. And so what else has inherent value? Is education as valuable as gold? What about healthcare? What about a vote that can’t be tampered with? What about an ID that can’t be stolen or erased? What about access to nutrition or clean water? You will find value everywhere you look.

It turns out, we’ve already done the legwork necessary to uncover the most elemental inherent values: The Sustainable Development Goals are commitments grown out of the drive to bring to life basic tenets of the Universal Declaration of Human Rights—the closest possible social contract we have to a global, common agreement.

We’ve already agreed, as a global community, to ensure inclusive and equitable access to quality education. We’ve already agreed to empower all women and girls, to ensure pure and clean water access for all, to promote health at all stages of life, and to end hunger.

We’ve already agreed.

Our agreements are grounded in deep value centers that are globally shared, but undervalued and unfulfilled. The reason for this is our inability to quantify intangible value. All of these rich, inherent values are still nebulous and fragmented in implementation—largely existing as ideals and blueprints for deep, globally shared common agreement. That is, we all agree education, health, and equality have value, but we lack common units for understanding who and who is not contributing value—leaving us to fumble in our own, uncoordinated siloes as we chase the phantoms of impact. In essence, we lack common currencies for our common agreements.

Now we find ourselves at the nexus of the real paradigm of Blockchain, allowing us to fuse economics with inherent value by proving the participation of some great human effort, then quantifying the impact of that effort in unforgeable and decentralized ledgers. It allows us to build economic models for tomorrow, that create wholly new markets and economies for and around each of the richest of human endeavors.

In late 2017 at the height of the Bitcoin bubble, without individual coordination, planning, or the help of institutions, almost $1 trillion was infused into blockchain markets. This is remarkable, and the revolution has only just begun. When you realize that Blockchain is in a similar stage of development as the internet pre-AOL, you will see a glimpse of the global transformation to come.

Only twice in the information age have we had such a paradigm shift in global infrastructure reform—the computer and the internet. While the computer taught us how to store and process data, the Internet built off that ability and furthered the conversation by teaching us how to transfer that information. Blockchain takes another massive step forward—it builds off the internet, adding to the story of information storage and transfer—but, it teaches us a new, priceless and not yet understood skill: how to transfer value.

This third wave kicked off with a rough start—as happens with the birth of new technologies and their corresponding liberties. Blockchain has, thus far, been totally unregulated. Many, doubtless, have taken advantage. A young child, stretching their arms for the first couple times might knock over a cookie jar or two. Eventually, however, they learn to use their faculties—for evil or for good. As such, while it’s wise to be skeptical at this phase in blockchain’s evolution, it’s important not to be blind to its remarkable implications in a post-regulated world, so that we may wield its faculties like a surgeon’s scalpel—not for evil or snake-oil sales, but for the creation of more good, for the flourishing of commonwealth.

But what of the volatility in blockchain markets? People agree Bitcoin has value, but they don’t understand why they are in agreement, and so cryptomarkets fluctuate violently.  Stable blockchain economies will require new symbolic gold standards that clearly articulate why someone would agree to support each market, to anchor common agreement with stability. The more globally shared these new value standards, the better.

Is education more valuable than gold? What about healthcare or nutrition or clean water?

We set out in 2018 to prove a hypothesis—we believe that if you back a cryptocurrency economy with a globally agreed upon inherent value like education, you can solve for volatility and stabilize a mature long lasting cryptomarket that awards everyone who adds value to that market in a decentralized way without the friction of individual partnerships.

What if education was a new gold standard?

And what if this new Learning Economy had protocols to award everyone who is helping to steward the growth of global education?

Education is a mountain. Everyone takes a different path to the top. Blockchain allows us to measure all of those unique learning pathways, online and in classrooms, into immutable blockchain Learning Ledgers.

By quantifying the true value of education, a whole economy can be built around it to pay students to learn, educators to create substantive courses, and stewards to help the Learning Economy grow. It was designed to provide a decentralized way for everyone adding value to global education to coordinate around the commonwealth without the friction of individual partnerships. Imagine the same for healthcare, nutrition, and our environment?

Imagine a world where we can pay refugees to learn languages as they find themselves in foreign lands, a world where we can pay those laid off by the tide of automation to retrain themselves for the new economy, a world where we can pay the next generation to prepare themselves for the unsolved problems of tomorrow.

Imagine new commonwealth economies that alleviate the global burdens of poverty, disease, hunger, inequality, ignorance, toxic water, and joblessness. Commonwealths that orbit inherent values, upheld by immutable blockchain protocols that reward anyone in the ecosystem stewarding the economy—whether that means feeding the hungry, providing aid for the global poor, delivering mosquito nets in malaria-ridden areas, or developing transformative technologies that can provide a Harvard-class education to anyone in the world willing to learn.

These worlds are not out of reach—we are only now opening our eyes to the horizons of blockchain, decentralized coordination, and new gold standards. Even though coordination is the last of the seventeen sustainable development goals, when solved, its tide will lift for the rest—a much-needed rocket fuel for global prosperity.

“Let us raise a standard to which the wise and the honest can repair.”  —George Washington
The views presented in this article are the author’s own and do not necessarily represent the views of any other organization.