I’ve been wondering why is it a good idea to use a different nomination of money in Australia, in Canada, in the US and in the UK? The main rationale I can see is macroeconomic. The national government can control the economy through devaluing its currency. But from a UX perspective – they are a disaster.
Can money exist without a banking system? “Sure,” say the bitcoin enthusiasts. But can we have the same kind of money that we’re used to – euros, dollars, yenis? The invention of smart contracts makes it a practical opportunity.
We are half-way through building a proof of concept for a tech savvy country to run a bankless monetary system in parallel with the traditional one. A few friends put together the infrastructure using Estonian ID system over a weekend, we’re now planning for a second iteration and you’re welcome to join if you believe you can help.
Two years ago I got very excited by the idea that it will be possible to decentralise the handling of money in my small country Estonia. I’m not talking about geeky bitcoins, but the real Euros. I wrote this blogpost, chatted with bitcoin people this and the other side of the Atlantic. At the time it certainly felt do-able, but needed quite a bit of technical and cryptographic wizardry.
Now we have the Ethereum programmable blockchain. It took me a couple of hours on a Saturday morning to successfully implement a central mint and a monetary system using a public recipe, together with necessary enforcement controls to tackle money laundering and other bad things.
I’ve wondered lately why we keep our money on bank accounts. Why would anyone in their right mind risk their hard earned cash for bankers to invest in loans for their profit, without any return to the deposit holder.
So I set up my own little alternative to a bank. I store any small amounts left over from my monthly salary into one of the two places:
- German government bunds – through an exchange traded fund
- Peer to peer loans to businesses – through FundingCircle and Zopa