José Alvarez

Thoughts on the Capstone Project I Never Did—Will I (or Anyone)?

September 2024

Below is an excerpt of a draft of a Capstone Project proposal at Minerva University I considered doing back in 2021, but never did (I ended up working on a very different unrelated topic).

Decentralized global support network:

A paradigm shift of the ideas of public and private health insurance

José Andrés Alvarez Cabrera

CP192 - Wilkins - 17:00 - Tue

Computational Sciences - Mathematics

Author's note

Degree of project development and commitment: Although I pivoted from the idea I presented in draft 1, the project idea I am presenting today is something that I have had in the back of my mind for over a year now. I had already made research on it on my own, but, originally, thought to myself that I should not pursue it as a Capstone: “José,” I would tell myself, “do this when you are 30, assuming you are a successful entrepreneur, and can pay 20 engineers to implement the system.” I have changed my mind. I believe the idea I am presenting today has the potential to change the world and people’s perception of reality. Every stage will make for a great Capstone project, whether that means accomplishing just the minimum viable back-up plan or the most ambitious stretch goals.

Looking back that's such a terrible rationale not to do something. At 26, I realize that it's relatively not that hard to get funding for innovative ideas in Silicon Valley anyways.

As Sam Altman says, it's easier to get funding for something that is hard but big if it works, than for something that is easy but small if it works.

Abstract

At a lower level of abstraction, universal public health care is not so different from private health insurance. In both cases, money is inputted into a pool, with protocols to get the money out of the pool. What changes is the rules and means. In the public option, a government takes money from every individual, coercively, with the promise that resources will be available to any individual when needed regardless of how much they contributed (i.e., access to health care would be regarded as a human right).

In the private option, a company receives money from any individual, freely, with the contract that resources will be available, when needed conditioned on the agreed terms, proportional to how much they contributed (i.e., access to health care would be regarded as a private service).

It seems a dichotomy in which we cannot have all the good things at once. We must either accept the coercive force of the government to guarantee health care to everyone, or accept the disparity that comes with being able (or not) to afford better private services. We may try both solutions at once with enough pragmatism, but we may hardly devise one solution that gets it all without the vital paradigm shift.

In the search of such a paradigm shift, it is worthy to review a series of facts that humanity has not been able to exploit:

Although all people on average are six, or fewer, social connections away from each other, there is not a system in place that leverages this fact in any way yet to empower a universal pool of resources.
In the last few decades, financial technology has immensely decreased the barriers to perform money transactions. Companies like Stripe, Inc. continue to revolutionize payment processing at a global scale, and the emergence of technologies like Blockchain suggest that it will be eventually possible to eliminate all practical barriers for making money transactions at the global level. The Diem system, a blockchain-based payment system proposed by Facebook, Inc., asserts that “moving money around the world should be as easy and cheap as sending a message. No matter where you live, what you do, or how much you earn” (Diem Association, 2021). The key insight is not the instances, but the pattern of such a trend.

In my original notes, I had crossed out a sentence in the first bullet point above that read "Facebook, Inc., created less than 20 years ago, might be the only entity and technology that is in the best shape to attempt something like it." That is very thought provoking, considering that the Diem project actually ended up failing. But the second point still stands: "The key insight is not the instances, but the pattern of such a trend."

The necessary background demands addressing the obstacles that make it difficult to close such gaps:

Outmoded, inefficient, or illogical regulatory systems limit the freedom to innovate and enjoy the fruits of financial innovation.
Political controversy would be unavoidable. The political motivation behind the notion of the welfare state would be threatened by a superior alternative.
Implementing a network system that operates at the global level is a difficult engineering and execution task. Existing work products include the software of remarkable companies like Facebook, Inc.
Defining crucial aspects of the system is not trivial from an economic perspective. E.g., the optimal incentive structure to get money into the pool, or the precise set of protocols to get money out of the pool securely.

The following project idea is about exploring a paradigm shift on the concept of insurance: One that is not a centrally managed pool of resources but a decentralized network of nodes (holding resources, each of them, on the aggregate) with automatized algorithms that optimizes the flow of such resources. [1]

1 Notice this differs from the traditional notion of private insurance because it gets rid of the necessity of a financial intermediary in the traditional sense altogether. Money does not really go to a pool that is managed by a private company, but stays within the nodes in the network and travels within through the transactions between nodes, creating a path and flow of resources along the way. Start and nodes do not have to know each other, but they do have to have enough connections in between.

In the project description, I talked about the kind of research I would do, not so much about a specific solution. The original notes from my draft below are mostly crap.

Project description

This project idea is about exploring a paradigm shift: I propose a decentralized global support network.

- that optimizes the handling of resources for the common good at a global scale without bureaucracy.

Research on the different types of public insurance (i.e., public health care) around the world.
Research on the different types of private insurance and regulatory frameworks around the world.
Research on health cooperatives and other alternatives to the traditional styles of insurance that seek a paradigm shift.
System ideation, definition, and conceptual design.
System modeling and simulation.

Network analysis and implementation.
Ideation and implementation of optimization algorithms that improve the handling of resources within the pool.

Stretch goals: Production-ready implementation of an app that accomplishes a best attempt at creating the most basic version of the system.

This project idea would start by exploring:

Existing alternatives to common organization of insurance, such as health cooperatives. E.g., why they exist (or do not), why people seek them, and why they work (or do not), and how they could work better.
The regulatory frameworks that place would place an obstacle for an innovation of this kind;
The new technological capabilities that offer the opportunity to circumvent traditional regulatory systems and put pressure on governments to reform regulations (Thierer, 2021).

However, overtime I thought of what could potentially be a solution. If you're interested in hearing more about it and getting involved one day (perhaps years into the future, as I am focused on tecuntecs.com right now), gmail me at jose[dot]a[dot]alvarezca—I dream to assemble a cracked team who has the courage and talent to tackle such a mission. Libertarians preferred.