You mention the problems of debt as a bank's asset, if I understand you correctly. But what can we do other than incremental banking and financial reforms? Do you think something like Bitcoin becoming a mainstream alternative will help us transition?
I think I mentioned problems with banking in other threads maybe. Here, I was just outlining a business which would exist as a blockchain entity, or perhaps a real entity, with blockchain accounting. But such an entity could be a hybrid of both traditional banking and digital assets.
Now, one of the reasons I probably wouldn't do this blockchain accounting system is that at present, if implemented correctly, it would first be used by criminal organizations.
Normally, criminal syndicates keep books, but they're very hidden and easily destructible. They can't risk the police seeing them. This is kind of bad if you want to report to management. This sort of system would fix a lot of issues with accounting systems for black markets, because the digital books would be a public record that the NSA could not decrypt.
For example, the guy who ran the silk road and was caught by authorities. All his funds are still sitting in an account on the bitcoin blockchain, and no government can seize it. These sorts of accounting systems would also be popular in countries where businesses are at risk of being nationalized, or other corrupt things are happening.
The long-term use would be that all businesses adopt similar systems... because it essentially grants a cheap, decentralized, auto-backup and verification of all entries.
Like my accounting system at work, I will use this as an example of some of the issues with traditional software:
- We can set user access controls in the software. The database however, must be freely accessable. Users could bypass the software and directly modify the database software behind the scenes. A fraudulent person with access could change a lot of historical entries, that should not be changed.
Blockchain is an easy way of implementing encrypted security user rights, where it is impossible to make an entry without an encrypted key, and no user no matter what level of their access is, could override that requirement. The top level administrator would be unable to, at best they could just issue a correction override with their signature, but they could never modify the total log itself, only amend a new entry into the log with their identity.
These sorts of systems are the future of business and that's why IBM and Microsoft are so interested in the technology.
Yet accounting is one of the tertiary places this technology will be developed, because the immediate uses are more exciting, like digital gold, digital contracts, Ethereum, and such.
Quite likely this whole accounting framework could be built atop Ethereum as an open-source project.
Right now I just have so many things rattling in my head, so many new ways people can do business. 3D printing blows my mind. I don't know where to believe things are going.
3d printing is nice, but in my view the cost of using it will always exceed the costs associated with traditional manufacturing.
Therefore, it can only be used in making models, templates, and demonstrations in terms of viable business solutions.
I think it could create a more creative population, but it wont ever solve things like low-cost Chinese manufacturing overseas.
Can a person (today) build an online business using a peer to peer alternative currency?
They already got it, basically.
https://openbazaar.org/ <--- I think it accepts other types, but quite likely Bitcoin will be the main currency on this marketplace.
The IRS has issued guidance on handling bitcoin transactions.
https://www.irs.gov/uac/Newsroom/IRS-Virtual-Currency-Guidance
So if you want to accept bitcoin at any business, you can... just not a lot of people use it yet. So basing a business upon it has to be a situation like OpenBazaar or something like that.
Seems I heard of something that could rival bitcoin.
I think bitcoin could easily die. It was like the first lightbulb or the first corporation, or the first railroad.
Yet because it was first to market, it has the first-to-market premium assigned to it by the market. It's like the first i-phone is more popular because it was the first. The i-phone copy a couple years later is just less popular.
The pivotal technology is encryption?
With blockchains, yes. Bitcoin basically operates on an encryption that is currently beyond any known cracking methods... even for things like NSA quantum computers. There are attacks possible on the system, but generally not on the encryption portion of the system.
To put it another way, if I wanted to bring bitcoin down, I wouldn't attack the encryption, I would attack the servers operating it. This is in stark contrast to things like DVD encryption which had been hacked before it was even released publicly.
After the stuff runs for several years, basically some platforms on blockchains will form which are beyond normal computer hacking methods.
Think of UNIX. UNIX is very old and open source. A properly configured UNIX system cannot be hacked. You can call up the company who runs the server and tell them a nice lie to try and get access, but the computer system wont give it to you. All a person could do is the DoS or DDoS attacks. Blockchains by their nature will be able to exist beyond DoS and DDoS attacks.
Presently, though, they have cracks in the systems because the technology is so new. The NSA could bring down bitcoin if it wanted to... perhaps not permanently, but temporarily, yes.
I mean fresh books does a cloud accounting (sort of) but not actual transactions.
Yes, so it would be "cloud accounting" which has existed for a long time really... just never had a buzzword until recently.
The difference is with most clouds, the cloud could in theory be hacked or infiltrated.
For example, if I use a cloud server, the admin of that server has 100% access to my records. He could sell them to my competitors, or their system could be compromised and my data violated.
With a blockchain cloud it is secured against this.
Everyone can have access to the log, but no one can decrypt the log if it is done like Monero. Bitcoin operates on a public record that everyone can see. So rich people in other countries can be abducted and ransomed for their bitcoin wallet that is publicly visible. With a system like Monero currency, this can't be done. Most of the transactions in Monero are bogus entries, and because the bogus entries are more common than the legitimate ones, no one can see who sent to who, or what anyone's balance is.
Only with a private key can anyone make sense of the record, but the system is protected against issuing fake entries. So the encryption knows a legitimate entry from an illegitimate one, but no one viewing the record can know.
Now, some cloud platforms are now encrypted against the administration company, so that this company does not have any knowledge of transactions... and only the users have the key to see the data. The problem with them is, it is still centralized data. To maintain the data, we still must rely on that 1 company to remain operational. We also must trust that they are doing the security correctly.
Blockchains eliminate the trust component, though.