Prediction: the ubiquity of the electronic infrastructure will make most of the functions of the modern bank obsolete. Simple transactions can be handled electronically for very little cost. Lending and saving transactions are more complicated, but in the right framework could probably be automated or even distributed to a high degree.
There's no technological reason why you can't have a single card serving multiple functions - from Cash to ATM to Credit to ID to License to Portfolio - and while there's an obvious efficiency advantage there are big questions about counterfeiting, privacy, theft, reliability, and infrastructure-independent person-to-person transactions.
The big question is how this would affect processes in place that control the creation and destruction of money, and whether newer systems could improve upon the existing one (money exists as a form of debt to a bank, which can create it through processes such as fractional lending). The big caveat is that banks are too rich to ever let anyone take over their business or take it in a direction they don't want. Make no mistake, they're in this for the money.
Prediction: the ubiquity of the electronic infrastructure will make most of the functions of the modern bank obsolete. Simple transactions can be handled electronically for very little cost. Lending and saving transactions are more complicated, but in the right framework could probably be automated or even distributed to a high degree.
The financial institution is not the form of the transaction. The financial institution represents the trust behind the transaction, whether that be paper or plastic. The reason $$$/Visa/MC/Amex are acceptable forms of transactions is that vendors have faith they will receive the money that the bearer of the card promises. The function of a financial institution is to establish trust between lenders, borrowers, vendors and customers. That will always need to exist.
As for the "big" question: Not all money is debt to a bank. Money is an abstract representation of value. As for banks creating money: Of course banks are in it for the money. But the nice thing is they make money in nice stable economies filled with some people who save money and some people who borrow money and where everyone is responsible in their financial transactions. Banks want to pay you x% interest on your money and loan it to someone else for x+y% interest. The value the financial institutions provide again is trust that I'll get my x% and due diligence that the person paying x+y% will probably be good for it. Banks that don't do that properly go away. Lather, rinse, repeat a few million times and I think you've got a great way to create value for yourself AND the economy as a whole.
So many possibilities. (Score:5, Insightful)
There's no technological reason why you can't have a single card serving multiple functions - from Cash to ATM to Credit to ID to License to Portfolio - and while there's an obvious efficiency advantage there are big questions about counterfeiting, privacy, theft, reliability, and infrastructure-independent person-to-person transactions.
The big question is how this would affect processes in place that control the creation and destruction of money, and whether newer systems could improve upon the existing one (money exists as a form of debt to a bank, which can create it through processes such as fractional lending). The big caveat is that banks are too rich to ever let anyone take over their business or take it in a direction they don't want. Make no mistake, they're in this for the money.
Wonder who'll be at that conference?
Re:So many possibilities. (Score:1)
The financial institution is not the form of the transaction. The financial institution represents the trust behind the transaction, whether that be paper or plastic. The reason $$$/Visa/MC/Amex are acceptable forms of transactions is that vendors have faith they will receive the money that the bearer of the card promises. The function of a financial institution is to establish trust between lenders, borrowers, vendors and customers. That will always need to exist.
As for the "big" question: Not all money is debt to a bank. Money is an abstract representation of value. As for banks creating money: Of course banks are in it for the money. But the nice thing is they make money in nice stable economies filled with some people who save money and some people who borrow money and where everyone is responsible in their financial transactions. Banks want to pay you x% interest on your money and loan it to someone else for x+y% interest. The value the financial institutions provide again is trust that I'll get my x% and due diligence that the person paying x+y% will probably be good for it. Banks that don't do that properly go away. Lather, rinse, repeat a few million times and I think you've got a great way to create value for yourself AND the economy as a whole.