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By minimizing material and energy waste, and maximizing trust, we transform the economy from linear to circular via ZW BlockChain accounting


Summary / Résumé

A ZWBC framework of entropy, S (joules per kelvin), information, I, (bits), and money, $ (US dollars) in a blockchain economy minimizes material and energy waste for communities (Layton 2012, 2014, 2016).

In general parlance: Communities that adopt the ZWBC become cleaner, smarter, and wealthier.

We introduce our three key metrics as scalars: S, I, and $, are modeled to behave according to the heat equation:

where , , and  have the appropriate units and dimensions to relate the local curvature of each of the respective fields to predict the flow of each among participants.

Entropy, S, a state variable describing the relative disorder of a gas, liquid, solid, or mixed-phase substance, may be assigned a value for every latitude, longitude, and altitude, including altitudes extending to the earth's core and to an arbitrarily large value, e.g. current Voyager I location, or the extent of the larger, but relatively humblingly small sphere of some of the first radio and television broadcasts.

Information, I, a scalar representing the smallest number of binary numbers that can be used to represent a song, image, blueprint, conversation, business location, digital transaction, hash, etc., can be vectorized to represent humanity's ever-evolving knowledge of the earth's physical properties, the genetic sequence of all organisms, the content of all computer hard drives and memory cards, etc.

Money, $ in its numerous fiat forms and growing number of cryptocurrencies, B may be treated as a matrix at each node in our global economy (2c). 

Relating these three key technoeconomic variables allows us to model the global distribution of entropy, information, and money:

This matrix approach to the relative value of currency at each node (individual, city government, corporation, non-profit, etc.) can be used to transparently distribute funds on a blockchain ledger in exchange for information, materials, or energy.

The result is a cleaner (low S), smarter (high I) and wealthier (high $) city.

What actions do you propose? / Quelles actions proposez-vous?

We propose to apply a formal framework of evaluating the fitness of proposed circular community economy models. Whereas most proposals focus on a single material stream, e.g. biomass, plastic, construction waste, carbon pollution, etc., our model is comprehensive and general enough to accommodate any and all other proposed circular economies.

We begin by outlining the fundamental differences between linear economies and circular economies by layering information (noosphere) and financial systems (econosphere) on top of the earth's biosphere and technosphere (Figure 1).

Using the second law definition for the behavior of the physical property, entropy, S, the Shannon definition of information, I, and an arbitrary fiat or blockchain system using $, we build a zero-waste circular blockchain economy on these three metrics.

All participants in the economy, in this illustrative case, six [6], are portrayed as participating in a circular economy with each of our three [3] key variables being circulated among the participants.


Figure 1. In the ZWBC economy, entropy, information, and money are placed on the ledger as the economy unfolds.  We use six participants to illustrate the model. Entropy, S shown in brown and blue, being the fundamental physical variable that results from primary energy conversion (fossil fuels, nuclear, renewables) sits at the base of the model. Information, I, shown in gray, in the middle layer, represents the means for maintaining a ledger of energy consumption and thus entropy production. Note that blockchains require perfect (lossless) information transfer through hash transfers. Money, $, shown in green, occupies the upper echelons of our intertwined global economies. All three variables expand and increase as a function of time (1a, 1b, 1c).

The basis for fitness evaluation is the minimization of entropy, S, maximization of shared information, I, and with the Nash-equilibrium-based matrices for maximizing $ on a weighted basis (Figure 2).

Figure 2. Nash's iconic 1950 The Bargaining Problem, poses a scenario where two individuals have a collection of differing possessions. So-called Nash equilibrium is reached in quadrant I when both have traded to the point where collective satisfaction is maximized. 

Unlike in a linear economy, under a ZWBC circular economy paradigm, materials or artifacts with minimal or negative values and are absorbed by other participants (Figure 3).

Figure 3. Left: The linear economy is not fully networked. Some participants become victims of one of our three metrics: 1) disorder (large blue circles), 2) ignorance (small gray circles), or 3) poverty (small green circles). Other participants in the linear economy prosper with smaller disorder values, larger information values, and larger financial values. The linear economy is susceptible to "popping" as the so-called Carbon Bubble predicts. Right: In the circular economy, entropy streams, information streams, and financial streams of all participants are placed on a universally accessible circular blockchain ledger. 

We propose to use the ZWBC S-I-$ framework as a basis for evaluating the circular economy proposals in this RFP as well as other such proposals in fields ranging from medicine to energy to information

The functions to be optimized are:

min(dS/dt),       (3a)

max(dI/dt),       (3b)

max(d$/dt)        (3c)

for each individual per the model proposed by the PI in 2015 at the Harvesting Clean Energy Conference.

All ZWBC participants assign values to their resources and attributes. Some values are positive: house, real estate, automobile, working capital, degrees earned, knowledge, etc. Some resources and attributes are negative: waste streams, financial debt, illness, addiction, utility bill, etc. 

In the first instance of the implementation of the ZWBC circular economy, all participants take part in an S, I, and $ assessment. The ZWBC algorithm minimizes S, maximizes I, and maximizes $ for each participant in a Nash-equilibrium sense to satisfy (1 - 3), and then cast into

where  is maximized and the three weighting scalars are adjusted in a manner similar to central interest rates.

In cases where materials have zero or negative value to all participants, such as plastic waste flowing into the ocean, a ZWBC reframes the economics so that this financially unrecoverable material or energy source can reenter the "build" stream or "burn" stream (Figure 4). Waste plastic has inadvertently literally entered a "no mans' land," because of its zero or negative value to the prior user. Burying plastic is simply not a solution. Instead, it must remain in the build stream indefinitely or enter the burn stream where it will eventually reenter the biosphere through CO2 photosynthesis. 

Figure 4. The "burn, bury, build" strategy proposed as a zero-waste solution in Zero Waste in the Last Best Place seeks to maximize the utility of all solid waste materials. In the lower left of the circle is the build stream where we see conventional recyclables such as metal cans. E-waste also appears here as an untapped resource for precious metals recovery and urban mining. We have placed glass in between the build and bury stream because in addition to other glass artifacts, glass can be turned back into sand, a component of engineered soils. Cardboard bridges the bury and build streams as cardboard can of course be remanufactured or composted as a soil amendment. Other cellulosic materials such as food waste and tissues are obvious candidates for composting and soil building. Wood that is unsuitable for building or burying can serve as a fuel or waste-to-energy solution. Some wastes such as biohazards must be disposed of thermally in a waste-to-energy manner.  

Some companies like Terracycle have stepped up and offer zero-waste solutions for difficult to recycle materials like latex paint and cigarette butts (Figure 5). Terracycle would thus be an ideal company to place on the ZWBC as they already have an inventory stream as well as a robust collection system. Both the collection (transportation) system and the remanufacturing system for Terracycle consume a portfolio of energy, some of which is fossil-fuel based, and some of which is renewable. Zero Waste in the Last Best Place has recently begun collecting cigarette butts to recycle through Terracycle.

Figure 5. The PI makes a simple act of recording the act, I of picking up cigarette butts in the Last Best Place reducing its entropy, S, and improving its value, $.

As a simple comparison of entropy generation generated by thermal versus non-thermal technologies compare the entropy produced by methane combustion (Bouras et al. 2015) vs. the entropy production rate of a solar panel producing (converting) energy at the same rate.

As with all economies, The ZWBC can only thrive if all members participate. All participants place their consumption streams and waste streams on the blockchain for all other participants to view and evaluate through an electronic ledger.

For example, gasoline purchases followed by driving is tracked through applications such as MileIQ. Purchasing food in plastic wrapping places the plastic wrapper on the ZWBC. If the waste plastic wrapper has a positive value to one member and a negative value to another member, a direct exchange is initiated. If the direct exchange is infeasible, then a broker with a buy/sell price steps in. We will emerge with an economy that is more transparent, more resilient, more efficient, more innovative, less wasteful overall, and easier on the environment writ large.

Lying about ZWBC carbon pollution is difficult, as there are no purchases using untraceable cash to purchase fossil fuels. An economy where conventional cash or credit is used to purchase fossil fuels could co-exist in parallel with the ZWBC, but is clearly untraceable, resides in a linear economy, and is thus outside the ZWBC circular economy. 

To return to our discussion regarding the participation of organisms and technologies, a planted, protected and thriving forest participates in the ZWBC economy. Using the satellite imaging techniques pioneered by Nobel Laureate Steve Running and the international carbon trading practices being put into place, individual private forest owners can join the ZWBC. 

We also track expenditures such as those recently pledged by Arnold Schwarzenegger to open law suits against fossil fuel companies. This is an example where a celebrity and political figure will use money, $ and information, I regarding the health risks, S of fossil fuels to cap the entropization quantified in Solomon et al. (2010) and elsewhere.

The PI, a member of the National Society of Professional Engineering Financial Technologies Taskforce and is now working with the Integrated Engineering Blockchain Consortium (IEBC) on a blockchain currency that is based on engineering utility rather than purely computational complexity.   

As an example, methane combustion results in a decrease in entropy of -7.10 J/K per mole of combustion. 

Information of course already has a price. For example, someone purchases a copy of the New York Times to gain access to information, or subscribes to Bloomberg for financial information. 

We also spend money to deentropicize ourselves. All humans and indeed all organisms spend resources either financial or energetic to gain access to deentropicizing energy whether they be phototrophs or chemotrophs. If successful, financial (buying food) or energetic expenditure (chewing, growing leaves, swimming to catch prey, etc.)  pays off by giving the organism or technology access to deentropicizing energy as first published by Schrodinger in 1944

There is, of course, no escape from the ultimate entropic death of our planet and the universe. However, by placing value on the deentropicizing and life-giving energy from the sun that leads to the replacement of biomass and biodiversity, through the ZWBC we enable otherwise undervalued waste to be placed back into the system. 

Which types of stakeholders are involved, in which way? / Quels types de parties prenantes sont impliqués, de quelle façon?

All organisms and technologies currently in existence and alive on Earth are currently involved in either participating in, resisting, or ignoring sustainability practices. We thus break out the stakes and participation levels based on our three primary metrics, entropy S, information I, and money $.

  1. All organisms and technologies are either entropyS sources, entropy sinks, or both according to their stage of life, productivity, economic influence, state of repair, etc. While non-human organisms arguably have no conscious will to participate in an economy, they all, by default participate in the global ecology. Since this framework includes a measurable, quantifiable physical state variable, all organisms and Type II machines and lower are participants and stakeholders.
  2. All organisms and technologies require the embodiment and exchange of informationI to exist, grow, communicate, replicate, and develop. Although only a fraction of all species on earth have yet to be discovered, all nevertheless communicate their genetic information to their descendants via genetic information. All organisms also arguably communicate either with sound, chemical, or electromagnetic means. And while it would be premature to include all organisms as information-transmitting stakeholders, the concept is not far-fetched. Examples: internet fridge, talking to dogs apps.
  3. Most human organisms rely on money$ to accelerate access to necessities such as food, clothing, transportation, medicine, et cetera as well as luxuries such as expensive automobiles, lavish lifestyles, cosmetics, et cetera. Although the vast majority of people will only deal with a single currency throughout their lives, many people make their livings exchanging currencies. And of course many people are investing and developing a large and growing number of cryptocurrencies. If successful, the ZWBC will accept and trade in all fiat and cryptocurrencies.  
  4. Other stakeholders include those undertaking similar WTE projects.

How could the actions be scaled up at the neighborhood or city level? / Comment serait-il possible d'augmenter la portée des actions à l'échelle des quartiers ou de la ville?

In a zero-waste blockchain circular economy, all possessions for all participants, are tallied, evaluated, and placed on a ledger. The initial hash of  consists of the i possessions of the N participants and is evaluated relative to a single currency such as the NSPE coin.

Unlike the Bargaining Problem, possessions may be allowed to take on negative values and have multiple copies. For example, garbage typical has a negative value for most people. By placing a specific negative value on a per item basis, the recycling brokers can fairly compete for these materials, and the history of all material trades can be observed by all participants so that participant roles can evolve.

Below we provide two examples of how a zero-waste blockchain strategy could be scaled up to a neighborhood or city level. The first is a schematic of an existing system that our team recently implemented to support Missoula Montana's Zero-Waste Initiative.

Figure 6. In this embodiment, we have weaned ourselves from carbon-based fossil fuel in  favor of  a renewable energy economy where existing biocarbon that is susceptible to forest fire, resulting waste from construction or demolition is used as a fuel supply. We have also implemented a carbon-negative "organic carbon engine" that uses sunlight to make oxygen through photosynthesis while simultaneously sequestering carbon as biochar.

In an effort to reduce atmospheric entropy by filtering particulates from urban environments, filtering microplastics and allergens from indoor air, another embodiment of our system is a pneumatic grid.

Figure 7. This community-scale zero-waste blockchain circular economy allows for metered gas, liquid, and solid exchange that manages indoor and outdoor air pollution, provides for energy storage, and pneumatic tool power.

Similar scenarios have been described in the entertainment industry, such as this monologue by an engineer-turned-accountant in the 2011 movie Margin Call. In the scene, the engineer claims to have saved the people of West Virginia over fifteen hundred years of their lives not spent in a car. 

Another example of a blockchain model being adopted at a city-wide level is that recently announced by Sheikh Hamdan to transform the Dubai government into a blockchain-based organization. The article specifically calls out carbon-dioxide emissions savings (< S) and financial savings (> $) by implementing a more information rich (> I) digital economy. 

The PI is working on additional examples.

What impact will these actions have on reducing greenhouse gas emissions and adapting to climate change? / Quels impacts auront ces actions sur la réduction des émissions de gaz à effet de serre et l'adaptation aux changements climatiques?

  1. Eliminating the practice of landfilling, eliminates methane emissions associated with landfill emissions.
  2. Maximizing transportation efficiency through ridesharing reduces transportation GHG emissions.
  3. As air is pulled into the renewables-powered pneumatic grid design (Figure 5), carbon dioxide is pulled with it. At sufficient pressures, atmospheric air liquefies and stratifies. GHG gasses are be released in a controlled manner into greenhouses and vertical farms.
  4. By putting all energy produced by all primary sources on a blockchain that equates entropy generation (GHG emissions) with a net negative on the optimization function, the GHG emitter's energy decreases in value in a manner similar to that described by Joseph et al (2017).
  5. If we compare the strategy of the ZWBC to the protocol embodied in the BitCoin protocol, we see that since a portion of the goal is to reduce GHGs through the ZWBC, any accelerating arbitrarily large use of grid-based electricity to compete for cryptocurrency, our sustainability is built in through  (4), thus prolonging of Schramski et al. 2015.
  6. Entities or corporations that choose not voluntarily to be listed on the ZWBC will be placed on it anyway. For example, the company responsible for triggering the "Door to Hell" in Turkmenistan will be placed on the blockchain and their value tracked. In this case, the combustion that was initiated in the '70s continues to burn to this day, driving up atmospheric entropy, offering relatively little information other than the fact that hydrocarbons do indeed exist below the surface, and certainly not creating any financial gain for anyone.
  7. Placing the example recently presented by Daniel Kammen to the MIT Energy Initiative on the ZWBC enables many of the financial aspects discussed such as monetizing efficiency. The result is a consensus among those tuned into the threats of atmospheric-entropy-induced climate change.

What are the other environmental, economic or social benefits? / Quels sont les autres bénéfices environnementaux, économiques et sociaux?

Unless local economies realize they are participating in a global economy, economies at all scales will continue to fail such as we have witnessed in Somalia, Eritrea, India, and as described by Diamond in Collapse (2005). 

Information is shared freely among all participants on the ZWBC. All participants report their waste streams including unused resource streams. All participants also see the waste streams of all other participants. Once the waste streams all become visible, one person's liability becomes another person's asset, thus bringing the entire system closer to Nash equilibrium via information sharing.

In the ZWBC approach, rather than having two participants, and a monetary bottom line, the ZWBC allows an unlimited number of participants, and satisfaction is measured by the collective minimization of each participant's entropy (waste) stream, the maximization of each participant's information (knowledge) and the maximization of each participant's wealth (financial gain) (Figure 8). 

Figure 8. Left: three participants have fallen victim to deceit, poverty, and disorder (-I, -$, +S), while three participants are relatively informed, wealthy, and healthy (+I, +$, -S). Right: In the ZWBC all participants are honest and well-informed, avoid poverty, and have their energy and material needs met.

When all participants have their material, intellectual, and financial needs satisfied, the likelihood of violent acts resulting from hunger, ignorance, or poverty diminishes (Gilligan, 1996).

As with any society or organization there are bad actors and thus setbacks. Consider the thought experiment where the global economy of 1930 used a ZWBC. The burning of books in the streets of Berlin, which represented the conversion of information (-I) into smoke (+S), thus further diminishing Germany's economy (-$), sent Berlin spiraling into the lower front left octant of Figure 8. On the other hand, if the books (+I) were sold (+$), a bit of order would have been preserved (-S).

What are the most innovative aspects and main strengths of this approach? / Quels sont les aspects novateurs et les principales forces de cette approche?

To our knowledge, this is the first such proposal to offer a comprehensive theoretical framework for evaluating sustainability on a planetary scale.

We are not naive in thinking that our approach represents some magic bullet of sustainability. The overall behavior of our system is just as susceptible to the laws of thermodynamics as all other systems. The difference though is that by minimizing waste, the inevitable fate of entropic death of our global civilization may be postponed. 

The ZWBC embodies the International Big History Association (IBHA) tenants, and quantifies the concepts introduced in Russ Genet's, Humanity, the Chimpanzees who would become Ants.

The PI has been researching the sociopolitical economics of climate change since he began researching his first major publication in this field (Layton 2008). Since taking the helm at the Missoula College Energy Technology Program, he has had the opportunity to research numerous high-impact publications on climate change and has had the opportunity to work with numerous influencers such as Steve Running and Keegan Eisenstadt.  One such paper is the 2010 work of Solomon et al. Although these authors do not name their lambda coefficient they introduce in equation [3], it does in fact have the dimension of entropy. 

Numerous carbon exchange models have been developed over the years. The Chicago carbon exchange, the Northeast exchange, California, Kyoto, Paris. However, none of these include the formal variable of entropy.

What are the proposal’s projected costs? / Quels sont les coûts projetés de la proposition?

The proposal's only costs have been the time in writing the proposal, approximately 50 hours. At a typical hourly rate for a professional engineer practicing in Montana, the cost in dollars would come to approximately $7,500 USD.

The initial information cost of maintaining the bits that represent the proposal are on the order of 1MB (~8MBit).

The energetic and thus entropic costs of producing this proposal are approximately 90 carnot. As a first-order approximation, the PI runs at approximately 100 W, and his laptop computer runs at approximately 50 W. Disregarding the other technologies responsible for maintaining the PI's well-being, and the embodied energy and energy source used to power the laptop, results in an entropic cost of approximately 90 C (~90 J/K). 

As a point of comparison, let's compare the dollar cost, entropic cost, and information transfer rate of authoring this ZWBC proposal to that of a USPS mail carrier driving 50 miles over an 8-hour work day to deliver mail to a few hundred customers.

In this accounting method, the entropic cost of a single individual writing a proposal on a laptop for 50 hours for the purpose of publication on the World Wide Web is 90 carnot vs over one million carnot for a USPS mail carrier driving a gasoline-powered truck for 8 hours to cover a 50-mile route. The mail carrier delivers an estimated 100 MB and $100,000. 

The result is a 1,000-fold better ROI for ZWBC vs. USPS according to


We are seeking $100k for an official IEBC launch.

What are the potential challenges or obstacles? / Quels sont les défis ou les obstacles potentiels?

The main obstacle for this proposal to overcome is education of its potential audience. The typical layperson is not familiar with entropy as a physical property of matter. Most people have been exposed to polluted air, polluted water, and mixed solid waste. Most simply pay their sewer and garbage bills. These are tangible, tactile immediate examples of the second law of thermodynamics in action. What most people are challenged by is the fact that "we all live downstream" of others and indeed ourselves.

As a case in point, upon his 2008 visit to Vancouver, BC, Bradley Layton was at first struck by how clean the Vancouver air was compared to Philadelphia air. He smelled individual vehicles driving by during his morning run in a sparsely populated suburban neighborhood.

The S-I-$ relationship is embodied in this Vancouver example: The unburned HCs and VOCs being emitted from the tailpipes of the vehicles near Layton as he ran, increased atmospheric entropy. His relating of that experience to ClimateCoLab represents information regarding the state of the atmosphere that day. Money was used to purchase the refined fossil fuels for the vehicle engines. VOCs and GHGs in turn alter weather and potentially reduce real estate values and property values.

This entropization of the environment writ large, thus leads to more costly living either in a financial or real sense.

So perhaps the biggest challenge to adopting the ZWBC is demonstrating its utility to early adopters.

About the authors / À propos des auteur(e)s

Bradley Layton PhD PE is the founder of Human Powered Future PLLC, where he keeps an eclectic mix of interests on a page he has been maintaining since 1995. He holds an SB of Mechanical Engineering from MIT, a Masters of Mechanical Engineering from the University of Michigan, and a PhD in Biomedical Engineering from the University of Michigan. His first book, Cellular and Molecular Biomechanics, written for the biomedical engineering community, has sold several thousand copies. His second book, Zero Waste in the Last Best Place was selected as Editor's Choice. He is the author of over 100 peer-reviewed articles and abstracts, has authored and holds several patents, and has taught thousands of students in dozens of different courses. He collaborates closely with business partners, academic partners and community partners who are collectively working towards sustainable business and technological solutions to the myriad of challenges presented by humanities over-reliance on fossil fuels.

References / Références

Beinhocker 2006 The Origin of Wealth

Bouras et al. 2015 Entropy Generation Optimization in Internal Combustion Engine

Carnot 1924 Réflexions sur la puissance motrice du feu...

Diamond 2005 Collapse: How Societies Choose to Fail or Succeed

Genet 1997 Humanity: The Chimpanzees who would become Ants

Gilligan 1996 Violence: Our Deadly Epidemic and Its Causes

Joseph et al. 2017 Revenue Neutral Carbon Fee...

Kammen 2018 3 Questions: Innovating for the Clean Energy Economy

Layton 2012 The Role of MechanoEvolution in Predicting Future Technologies

Layton 2014 Anthropogenic Entropy Acceleration...

Layton et al. 2016 Entropy Acceleration Shannon Information and Socioeconomics: Quantitative Examples

Layton 2017 Zero Waste in the Last Best Place: A Personal Account and How-To Guide on Landfill-Free Living

Nakamoto 2008 Bitcoin: A Peer-to-Peer Electronic Cash System

Nash 1950 The Bargaining Problem

Schrodinger 1944 What is Life?

Schramski et al. 2015 Human Domination of the Biosphere...

Shannon 1948 A Mathematical Theory of Communication

Solomon et al. 2010 Persistence of Climate Changes due to a Range of Greenhouse Gasses

Leung 2018 Waste Plastic to Fuel by Induction Heated Pyrolysis