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I think it's becoming increasingly clear to anyone who has actually been paying attention that almost everyone is pretty much screwed at this point when it comes to money. Or maybe that's just the impression I get from what I have read. The banking system has more or less rotten from the inside, the government is increasingly revealed as corrupt, more and more rich people are putting more and more money into offshore tax havens, the gap between the wealthy 1% and the rest of the population is getting larger and larger, and yet at the same time the money that the 1% has is becoming increasingly worthless. The current banking system cannot hold, and fortunately an alternative seems to have presented it's self from nowhere to save all the world's money, at least theoretically. Cyrptocurrency. It's actually pretty amazing that an unknown hacker came in from nowhere and introduced this whole new idea of money and pretty much vanished. Right now a single Bitcoin for example is worth about $700 and more and more individuals and companies are trading it and using it. Even traditional banks are increasingly interested in the idea of using the 'blockchain' for their own distributed ledgers. But I am not going to sit here and say their aren't problems that need to be fixed. Cyrptocurrency is still to volatile, there are concerns of new quantum computers ruining the encryption scheme it relies on, it often can be used to make tracing the flow of money difficult and possibly could make tax avoidance even worse, regulation could crack down on it, 'forking' and other community disagreements could split the base too much... And yet it seems this underground economy is becoming more and more mainstream and I have heard some people say it may take the place of traditional government controlled fiat currency someday. Overblown hype? Maybe. Maybe not. The idea that cash would one day totally be replaced by credit sticks was a really common trope in sci-fi and futurist ponderings and that never really ended up being true. This isn't quite the same thing though. Cyrptocurrency isn't simply an account being managed by a bank or central service somewhere, it's a system of distributed encrypted ledgers where everyone is always double checking everyone else's copy. It's harder to trace and some of the new Cyrptocurrencies offer complete anonymity to make it nearly impossible. It's probably perfectly possible to even print out paper versions of bitcoins with unique keys that can serve the same function as cash. Could this really replace old forms of money? Maybe. But if it does we will have to think about what that means and how that would change things. If we remove the government's control of currency, do we also remove their ability to collect taxes? If not, how will they be calculated and collected? If so, is there a better way to fund public projects then taxation? If banks are either gone or decentralized to the point of not mattering much anymore, how will lones such be done? Could 'smart contracts' help any of these problems? If you hear , then the world is going to be changing very so to something very different. The old institutions will fall and so on and so forth. I can't help but be more then a little skeptical. I think it's more likely that it will continue as a sort of small part of a larger economy which is more centralized. But I do want to see what happens next and if I had extra money I might try seeing if I can get into it.
It occurs to me that, putting aside cryptocurrency and it's many potential benefits and problems, the benefit of 'blockchain' technology or something similar could have another really important use in finance (and doubtless it is one of the reasons why banks are getting more interested in the tech). I am sure most people by now have heard of the necessity of checking your 'credit report' (and all the shady sites who are trying to sell you what you should be able to get for free form the government somewhere), how it could have mistakes and how you need to make sure you get a good 'score'. There are lots of complected ways your credit history is kept and used, and most people aren't quite able to keep track of it all. It's no secret that a vast number of people are in debt up to their eyeballs, but some of them might not even realize it until it's too late. So here is the question that popped into my head: Can we make a better system of handling, or at least communicating, people's debt? I am not sure using blockchains are the only or even best way of doing it, but one of the advantages of it is that it basically keeps a list of all transactions and their details. It might be a lot easier to make a program that tabulates and easily displays up to date information about someone's debts and available credit with such technology. Imagine having an app on your smartphone or on your PC which people can look at and see all their due bills and debts and lines of credit. It could even be programed to help you manage them and pay them off automatically. Would this be prone to abuse? Maybe, I am not sure. It might be worth a try though. It also made me thing a little about, if the theory that money is just another form of credit is accepted and a system for tabulating debts were to be commonly agreed upon, would it lead to a whole new sort of paradigm shift in how economics works for most people? Could a whole economic system be based purely on shuffling debt around rather then acquiring capital? Who would benefit in such a system and who would suffer? Is it really any different then the system we use today? After all, one of the biggest ways banks and governments make money is by trading debt. Maybe debt and money really are two sides of the same thing. Though I have to admit, I personally never use 'credit' anyway. I pay for most everything with cash and that cash comes pretty much entirely from social programs. I do kinda advocate for a basic flat living wage to be payed to everyone. Maybe that will just be the equivalent of simply slowly clearing a value of debt. Maybe as technology and AI take over and more and more people are displaced it will be more practical to do so then using big bureaucratic programs. I am not sure. I guess I will see.