The goal is to have everyone own their own bank(s), eliminating the need for the Federal Reserve and any national currency at all.
- Everyone can issue currency.
- People can trade in those currencies.
- There is a decentralized store of currency exchanges.
- People develop trust with each other.
- It's easy with technology.
- It avoids the problems of inflation and deflation.
- If you want a Universal Basic Income, you can just issue yourself currency as much and as often as you want! (Good luck getting others to accept it, though.)
Issuing Currency (Trading)
- Person A wants to buy something from Person B.
- Person A issues currency X and transfers it to Person B.
- The transaction is recorded locally and in trusted third parties.
- The transaction is signed for authenticity by both A and B.
- Some transactions may involve multiple currencies. IE, A may pay 5 X to B, and B 15 Y to A.
- Person A has issued 5 X to B.
- B has issued 10 Y to A.
- A and B agreed that 2 Y = 1 X.
- A and B agree that their debts are settled.
- A now owes B nothing, and B owes A nothing.
Third Party Transactions
- Person B refuses to accept X, but they will take Y.
- Person A transfers Y to B and completes the transaction.
Only the bearer of a secret key can generate currency. They can issue only one currency. There is a 1-1 relationship. Thus, the bearer of the key can transfer as much of that currency as they want.
Each bearer of a secret key keeps track of who owns how much of that currency.
When a transaction occurs, the bearer of other keys issues a note that the currency has been transferred. Each transaction needs to be signed by both keys, the sender and the receiver. The bearer issues a note that the transaction has been accepted, linking the transaction to some previous transaction. These notes can be used to recreate account balances.
- Bank account software.
- Key signing software.