Quantum Holonic Swarm Systems Report

Fall 2016 Research report
Overview
About Q-HOSS
Who We Are
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One slide overviews

Biohacking
Blockchain
Virtual Reality
Important trends in Blockchain
Blockchain and physical goods
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Sample Research Reports

Organizational Design
Currently emerging useful techniques and application areas :
Primary use cases in active deployment (at least 3):
Compelling intersection points with other fields (e.g. decentralized tech, AI), if any:
Related business opportunities (either as standalone or augmenting existing businesses):
Resources
Experts consulted:
Articles which briefly summarize the field and state of the art:
Research articles expressing current state of the art:
Deep Learning
Currently emerging useful techniques and application areas (at least 3):
Compelling research areas in which progress is being made:
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Contact us: jd@qhoss.com
Bibliographies
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Interviews
Matt Liston of Gnosis on the potential of prediction markets
Philip Saunders of Pax on the future of governance
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Overview
About Q-HOSS
Q-HOSS, Inc. was established to fulfill the legacy of DARPA and other research organizations that facilitated the development of
highly impactful technologies. This often involves the funding of technologies prior to any commercial applications with the
knowledge that often a decade of pure science research was needed before these applications could arise.
In line with this legacy, Q-HOSS first attempts to engage the brightest minds engaged in research in its target areas and to
facilitate gatherings where these people are able to synergistically exchange ideas.
As theses emerge out of these idea exchanges, we formalize our research and make it available to corporate and governmental
sponsors both seminars and written reports.
Who We Are
Joel Dietz, who serves as editor-in-chief and curator is particularly polymathic in interests, spanning the arts, work as a
professional translator, educator, founding non-profits, the government and thinktank sectors, and open source and enterprise
software. He finds the fusion of these different elements particularly interesting.
Who we are:
David Kammeyer - Deep Learning expert
Landan Laurusaitis - Co-Founder, the Performist.
Marcus Olsson - CEO, Technium. Virtual Reality expert.
Ryan Orr - CEO, Chronicled. Adjunct Professor of Economics Stanford University.
Noah Thorp - CEO, Co-makery. Former VP of Engineering Nasdaq.
One slide overviews

Biohacking
Blockchain
Virtual Reality
Blockchain and physical goods
Sample Research Reports

Organizational Design
Humans use collectives of many types to execute group actions. These include corporations, non-profits, governments,
cooperatives, and many other structures. Due to the inherent mutability and customizability of blockchain technology there are a
great number of new possibilities of organizational types.
Currently emerging useful techniques and application areas :

Holocracy has emerged as a talking point over the past couple years. Created by a technician and dungeons and dragons master, it
has a fairly complicated ruleset that illustrates how decisions can be made. It was inspired by the concept of holons or autonomous
sub-units. Generally speaking it exists within the context of an existing corporate container and does not contain any customizable profit
distribution mechanism (although the training and product company HolacracyOne does have an unusual structure how this is done).
Teal Organizations are part of a longer discourse on optimal organizational design and represent the ostensible culmination of an
evolutionary pathway. In short, organizational types which depend on violence or coercion are slowly surpassed by those which include
flow. This is more of a theoretical concept and is generally not applied within the context of profit-oriented entities.
DAOs (Decentralized Autonomous Organizations are a new type of blockchain-empowered technology. In short, they are like
corporations in that they may have shares and distribute profit to their holders. They are unlike corporations in that they exist in an
extralegal context and may include complex and customizable decision making mechanisms.
Exponential Organizations is a school of thought originating from Singularity Univeristy that states that large organizations should
create disruptive small organizations inside themselves to highlight the changes that can make exponential change. This is similar to the
venture-backed startup model but seeks to deploy it inside of existing organizations.
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The shoe company Zappos remains the largest implementer of holacracy, which has not been without its kinks. In general the type is
employed by only approximately 300 companies and tends to be divided between people who think that it is incredibly useful and
efficient and those which think that it is more overhead than it is worth.
DAO structures have been used by several organizations, notably Swarm (the first decentralized organization launched on the Bitcoin
blockchain), and several that have started surfacing since the launch of the ethereum blockchain (Digix, Slock.it). The largest use cases
for the DAOs has been things that are generally prohibited by existing regulations but that there are large numbers of people with
cryptocurrency that want to happen anyways.
There are also prototype use cases of DAOs to manage internet of things devices, including a demo by IBM called Adept that was used
for washing machines. Other demos of interfaces between the energy producers and consumers, as this is an optimal use case for both
peer to peer technology and the full automation that is allowed by state of the art blockchain technology.
As blockchain-entities DAOs are highly compatible with automation, including both state of the art devices in Internet of Things and
robotics. In short, they allow various sufficiently smart devices to federate and perform group decisions and even purchase items
without interacting with any humans.
Exponential Organizations have a compelling intersection points with blockchain technology as the process of creating small
organizations that are disruptive probably requires a more lightweight solution than traditional legal mechanisms (e.g. companies and
cap tables). Blockchain based cryptoequity is possibly the best solution to this problem.

Active holacracies remain small (~300 organizations) and consulting is possible around them but it is not a large market.
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Although the specific application areas of DAOs remain early, one can see some sort of group interface for smart devices. This has led
IBM to invest a considerable amount of money into developing things in this area and more use cases are expected to emerge.
Grey and black market DAOs are expected to remain strong and create many use cases that may eventually bridge from grey and black
markets (as did Bitcoin). Among other things they allow profit potential that has been traditionally locked up for high net worth individuals
and it is highly likely that many people will make a substantial amount of money with them as overall market value of DAO assets
increases (as with Bitcoin).
Resources
Experts consulted:
Brian Robertson (inventor Holacracy and founder of Holacracy One)
Noah Thorp (author self-organization constitution)
Kent Langley (Singularity University, Exo Works)
Francisco Palao (Exo Works)
Vitalik Buterin (Bitcoin/Ethereum)
Swarm, A Brief Review of New Organizational Styles,
https://medium.com/@Swarm/brief-review-of-new-organizational-styles-a4174f7fef03
Vitalk Buterin, DAOs, DACs, DAs and More: An Incomplete Terminology Guide,
https://blog.ethereum.org/2014/05/06/daos-dacs-das-and-more-an-incomplete-terminology-guide/
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Steven Denning, Forbes, Making Sense of Zappos and Holacracy,

http://www.forbes.com/forbes/welcome/?/sites/stevedenning/2014/01/15/making-sense-of-zappos-and-holacracy

Vitalik Buterin, Secret Sharing DAOs, https://blog.ethereum.org/2014/12/26/secret-sharing-daos-crypto-2-0/
Joel Dietz, The Competitiveness of Distributed Organizations,
https://docs.google.com/document/d/1AnwwNNMomg7sRoR6d0dQjZwvJ3PfBIxW3Vq9fm6K4I8/edit?usp=docs_home
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Deep Learning
Deep Learning is a new type of Machine Learning that involves virtual stacks of neurons, capable of learning concepts at multiple levels
of abstraction. Deep Learning algorithms allow machines to learn to perform many tasks which are easy for humans, but which have
been hard for computers, partially because Deep Learning is inspired by the organization of the brain, particularly lower levels of the
human visual cortex.. Deep Learning has been applied in a number of areas, and has been most successful in understanding images,
speech, and language.

Currently all commercial speech recognition systems are using or are transitioning to Deep Learning techniques (Siri, Google Now,
Nuance).
Facebook is using Deep Learning to categorize and automatically make captions for images (by identifying the objects in an image, and
the type of scene) in order to make recommendations for the news feed, identify relationships between people, and provide textual
descriptions of images for visually impaired users.
Newer semi-autonomous cars such as Tesla use Deep learning to make sense of the environment from camera images to detect
pedestrians, find lane markings, and read street signs to enable partially driverless operation.
Currently emerging useful techniques and application areas (at least 3):
In the past year, Deep Learning has been very successfully applied to Natural Language Processing (understanding human language).
Google has demonstrated, and will soon be deploying a Deep Learning based Google Translate, which provides dramatically improved
automatic language translation.
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In the visual arts, algorithms related to the paper A Neural Algorithm of Artistic Style can automatically convert a photo into a painting
of the same scene in the style of a wide variety of artists, (make your selfie look like a Picasso painting) You can try this at deepart.io.
Broader applications of this technology will open up many new artistic tools, and dramatically change what can be done in the visual
effects industry for film.
Many hedge funds and large banks are currently applying Deep Learning for financial market prediction. Many of these involve taking
sources of information that are forward looking indicators of asset prices, such as the twitter feed, press releases, etc, that had been
difficult to effectively process in real-time due to the inability of computers to understand human language.
Compelling research areas in which progress is being made:

Natural Language Processing is an area of very rapid progress. In the past two years, Natural Language Processing using Deep
Learning has gone from nonexistent to greatly surpassing the previous state of the art.
Applications include natural language translation, sentiment analysis (deciding whether, for example, a product review or a tweet
represents a positive or a negative opinion), automatic text summarization, categorization, and much more sophisticated search.
In Visual Recognition, progress is being made in identifying objects and actions in video. This is heavily dependent on the continued
improvement of GPU processing power.
Natural Language Processing in general is a very intense area of study, for sentiment analysis, translation, and as a method of
communication with humans (such as in chatbots)
The field of Robotics is highly synergistic with Deep Learning. Robots ability to perform useful tasks are largely limited by their ability to
understand their environment. With Deep Learning systems, robots will be able to operate in less controlled environments, and interact
with the environment in more sophisticated and natural ways.
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The Internet of Things trend will be greatly accelerated due to deep learning. Cameras and microphones have become very small and
very cheap in the past decade. Until recently, there hasnt been a way to make sense of these images though, and camera-based IoT
devices have been limited to basic functions such as motion detection and video streaming. With Deep Learning on board, connected
cameras can make much more sophisticated inferences about what is going on around them.
Chatbots that actually understand real human sentences will be enabled by new Deep Learning Natural Language Processing
techniques.

In financial markets, more sources of information will be amenable to automated analysis. This will further drive trading into more
automated realms.
The defense industry will be making extensive use of deep learning for all types of surveillance. Ground-based cameras and airborne
platforms will be able make much more sophisticated inferences about behavior patterns, and airborne surveillance will be able to
gather far more useful information without the need for human interpretation of the massive volumes of data from modern imaging
systems.
Bibliographies
Lecun, Bengio, Hinton, 2015, N
ature 521, no. 7553 (https://www.cs.toronto.edu/~hinton/absps/NatureDeepReview.pdf)
Kammeyer, The History and Near Future of Deep Learning
(http://www.slideshare.net/kammeyer/deep-learning-intro)
Resources for more in depth research and education (e.g. educational resources):
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Googles Machine Learning Cloud Service (https://cloud.google.com/products/machine-learning/)

(Highly Technical)
Goodfellow et all D
eep Learning MIT Press, 2016
Tensorflow.org (Googles Deep Learning Framework)
Gadys, et. al. A Neural Algorithm of Artistic Style 2015 NIPS Deep Learning Symposium
Sutskever et. al. Sequence to Sequence Learning with Neural Networks Neural Information Processing Systems 2014
Bahdanau et. al. Neural Machine Translation by Jointly Learning to Align and Translate 2015 International Conference on
Learning Representations
Russakovsky et. al. ImageNet Large Scale Visual Recognition Challenge 2014 Conference on Computer Vision and Pattern
Recognition (https://arxiv.org/abs/1409.0575)
Mikolov, et. al. Distributed Representations of Words and Phrases and their Compositionality 2013 Neural Information
Processing Systems Conference
(https://papers.nips.cc/paper/5021-distributed-representations-of-words-and-phrases-and-their-compositionality.pdf)
Experts consulted :
Paul Merolla (IBM, Neuromorphic Computing)
Jonathan Krause (Stanford)
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Interviews
Matt Liston of Gnosis on the potential of prediction markets
1) What do you think are the key ingredients to the success of a decentralized prediction market?
There are many components that will contribute to the success of a decentralized prediction market. Interface
and awareness are crucial to gain liquidity. We approach the problem of creating natural and comprehensible
interfaces by creating tools to create specialized markets for each use case. Awareness will always be an
ongoing effort. In the past, crowdsales have been a strong contributor to awareness. Crowdsales create many
stakeholders with incentive to promote the product. Liquidity exists in a positive feedback cycle where more
liquidity leads to accurate pricing which leads to proper incentives for participation. Other key components
include scalability and legal clarity.
2) What are the top areas where you think prediction markets can be applied to produce outcomes that
are better than any pre-existing method?
By providing economic incentives and disincentives for participants, prediction markets can filter out the noise
from the superforecasters who have unique and accurate knowledge of event outcomes. In theory, this should
apply to any market. I think this will become most apparent in markets outside of traditional betting or financial
applications where there are individuals with unique insights into the questions. Examples of this would be
markets for scientific discoveries, current events, and markets where participants may have inside information.
3) How would you validate the efficacy of prediction markets (e.g. Gnosis) for solving problems like
governance?
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We would validate the efficacy of prediction markets for governance in very specific use cases first. A great
example of this in the blockchain ecosystem is assisting the evaluation of proposals to DAOs. We have written
a proposal related to this here:
https://www.reddit.com/r/TheDao/comments/4kaj3l/a_gnosis_written_proposal_to_the_dao_futarchy_and/
4) What are the specific plans for the Ethereum Dev grant? What exactly are you validating and how far
have you gotten?
At this point, our plans are to carry out three experiments. The first two are testing the ability for market
manipulators to sway markets when incentive is provided. This is relates to futarchy as there may be
participants who have secondary incentive and wish to effect these markets. The third experiment will test
futarchy more directly. Currently we have written up the smart contracts for these experiments and are working
on a front end to make it easy for anyone to participate.
5) What are the top models for oracle you see today and do you think they will continue to be the
preferred models?
The current top oracles that I see are trusted oracles such as Reality Keys and Oraclize. I expect that they will
continue to exist in an oracle ecosystem, but that a dominant model will be one which aggregates all oracles
and provides a market for oracles to build reputation and offer their services. There may be several
decentralized oracles which are used for very narrow cases, but I dont expect these to be the preferred form
as they are highly inefficient (cost wise), slow, and unproven. If one of these proves practical, then it can offer
its services through an oracle market.
6) What are the key barriers to getting a prediction market live and at scale and how do you think
Gnosis will surmount them?
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Liquidity, legality, and trading mechanism. As I mentioned in the first question, liquidity has been the hardest
problem to solve for prediction markets. When it comes to new types of questions, it is necessary to grow a
demand which was not previously there which is inherently difficult. We plan to approach liquidity through our
skin model which will allow participants to easily create and operate their own specialized markets as well as
through partnerships with existing organizations. Legality issues can be solved by obtaining licenses to operate
applications in various jurisdictions. Some of these requirements may fall on individual skin providers which will
help the legal process develop concurrently and scale more quickly.
Philip Saunders of Pax on the future of governance
What do you think of the word "government" ? How is what we are seeing today with open source protocols and
cryptographic ledgers similar or different to what people think of as "governance"?
Government and governance are two different concepts. Government is a territorial monopoly on common goods.
Governance on the other hand is more of a verb, and occur wherever human beings have gathered together
spontaneously and need to make decisions about what to do and how to allocate resources. The difference is that one
occurs in a monopolistic fashion whereas the other is polycentric and opt-in- it can happen within a company, within a
club, among friends, formally or informally. With cryptographic protocols we are seeing the emergence of a rich fabric of
human beings assuming the mantle of governance over their own lives.
You've been critical of some of the libertarian and cryptoanarchist approaches to governance. What do you think
hasn't worked about libertarian approaches so far in the blockchain space?
I am critical of misapplying the ideas of decentralization and trustlessness to areas they were not originally intended to
address, to the point of verging on blatant anti-humanism. The reason why this movement started in the first place was to
challenge the illiberal government monopoly over the money supply (Bitcoin +) and over law and contracts (Ethereum +).
I agree that it is important for macro cryptographic protocols to be trustless and decentralized in and of themselves. But
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there is nothing wrong with companies or platforms being run as normal businesses with centralized management- that is
by far the most tested and efficient/responsive way to run a company (which is not to dis collaborative forms of
production if people prefer it). While I love DAO's and think they will be a huge part of the future, I am developing what I
call an "IO framework"- incorporated companies. IO's are Ethereum-incorporated companies which are similar to human
run LLC's under state law but can also be automated similar to a DAO if necessary.
You are building on Ethereum. Do you think that Ethereum as a protocol currently has what it takes to launch an
entire crypto-governance stack? If not what it is it missing?
I am bullish on Ethereum. From working with Solidity, there is almost nothing that you could imagine doing as it relates to
governance and crypto-law that couldn't be done with it. The only weakness is that it is not currently possible for
contracts to call themselves.The is both a blessing and a curse. It's good in that it is unlikely that Ethereum will ever
become "Skynet", but on the downside can be tedious to have to keep activating contracts with transactions for their
encoded functionality to be implemented. But there are possible workarounds like E
thereum Alarm Clock and an idea I'm
working on myself called "plumbing"- which will overcome this issue. Another current weakness is obviously scalability, or
what is called "nonsensus"- the waste of having to duplicate all information across every node. Serenity will solve this
problem by reusing a concept from MongoDB called sharding- where multiple mini-blockchains will hold local consensus
while still being interoperable with other shards. Once this is implemented, Ethereum will have unlimited scalability, which
is an exciting prospect.
Governmental income historically largely depends on taxes, so much so that it is seen to be one of the few
certainties. That said, Silicon Valley billionaires seem to be investing on the possibility that "death" perhaps is
not as inevitable as we once thought. Perhaps the same is true for taxes? Do you think it is possible to replicate
this functionality on a non-coercive model?
Taxes are basically charges on certain classes of exchanges; but the only way it is possible to impose a tax is through
placing a bottleneck over that transaction. The worst kind of tax is one which tries to control people's choices through the
sculpting of incentives. That's why government relies on control of banks, so it can monitor transactions. With anonymous
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currencies like DASH, zCash and encrypted future versions of Bitcoin it will be impossible to place such involuntary
bottlenecks on certain kinds of transactions.
So the argument for an Opt In Society is both practical as well as moral. Commons will not exist unless people choose to
participate with full willingness- because if they don't want to, it will be extremely easy to avoid. With smart contracts, we
can create systems where people can own equity and receive dividends. Tax systems are at the "front end" of the
economy- at the bottlenecks between transactions. Div systems on the other hand are at the "back end"- constructed
from the ownership structure of organizations incorporated on the blockchain. It is therefore much more efficient and
simple and replaces the particular needs and impulses that lead to tax systems in one fell swoop.
You've mentioned "duty" as a key building block in political unions. While familiar to any student of Virgil or
Aristotle, it doesn't seem to be a particular emphasis within the modern market economy. Do you think the will
be a revival of this concept and, if so, why?
I believe that there are no unchosen positive obligations, but that there are advantages to a culture that encourages
people to engage in duties beyond themselves. For example; participating voluntarily in a Div system when legally there
is no obligation to do so. That requires a belief in the value of duty. Despite it being slightly old-fashioned I use the word
"duty" deliberately. Unlike words like "equality", I think duty is more actionable. Equality is a mirage that moves the closer
you get to it, duty is something everyone can practice no matter what their economic level. It also strikes to the core of a
lot of angst and accusations of millennial narcissism. Despite this, many recent popular movements have demonstrated
that millennials in their hearts want to live for something larger than themselves.
What are your largest sources of inspiration as you build out these concepts and associated technology?
I don't really think of it that way since I'm mostly thinking in terms of code these days, but I have consistently tended to
follow a Greco-Roman aesthetic. So I suppose one of my inspirations is the Rennaissance- which is reconnecting to what
was good about the past and discarding the bad. I'm also a fan of Dante Alighieri since college and think that the journey
of The Divine Comedy- from Hell via Purgatory to Heaven- is very symbolic of the journey of mankind from stone age
tribes to Ethereum. Another inspiration is Star Trek, which I think of as a version of the future where human beings are
empowered agents rather than passive "users" of technology that they can't understand or control.
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How does Pax differ from other "virtual nation" efforts we've seen so far (e.g. Bitnation, Liberland) ?
There are definitely a lot of overlapping ideas. With respect to Bitnation, in one respect I think Pax via "hubs" is more
physically based. In many ways, it's like asking "how does Facebook differ from Bebo". There are probably a lot of
similarities in the ideas, but it's the execution that counts. Pax is more comprehensive and original. Where Bitnation is a
company, Pax is an idea- a theory of the universe so to speak. I also believe in a focus on culture. It's not just about
escape or avoidance, it's about inviting people to be part of something that is bigger than themselves.
Where do you see the largest opportunity areas for the first implementations of crypto-governance such was
what you are building with Pax?
I like the approach of ZEDE's- Zones for Economic Development and Employment. This is a movement which is gaining a lot of steam
and is a great opportunity to for establishing hubs in various areas without the full burden of compliance with established orders. I also
think the crypto-governance can take a lead in ideas like "basic income"- which are best implemented in a decentralized, high-trust
fashion rather than through easily corruptible states. A focus on these two areas will take us a long way.

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Fall 2016 Research report

One slide overviews

Sample Research Reports

Contact us: jd@qhoss.com

Contact us: jd@qhoss.com

One slide overviews

Contact us: jd@qhoss.com

Contact us: jd@qhoss.com

Contact us: jd@qhoss.com

Blockchain and physical goods

Contact us: jd@qhoss.com

Sample Research Reports

Currently emerging useful techniques and application areas :

Contact us: jd@qhoss.com

Primary use cases in active deployment (at least 3):

Related business opportunities (either as standalone or augmenting existing businesses):

Contact us: jd@qhoss.com

Steven Denning, Forbes, Making Sense of Zappos and Holacracy,

Research articles expressing current state of the art:

Contact us: jd@qhoss.com

Primary use cases in active deployment (at least 3):

Contact us: jd@qhoss.com

Compelling research areas in which progress is being made:

Related business opportunities (either as standalone or augmenting existing businesses):

Googles Machine Learning Cloud Service (https://cloud.google.com/products/machine-learning/)

Contact us: jd@qhoss.com

Contact us: jd@qhoss.com

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