Cloud Banking
Topic opened on May 21, 2009
Let Them Fail: An Introduction to Cloud Banking
This is the speech I gave at SIGINT 2009 on 22 May, 2009. I presented a basic outline of how money and banking works and introduced the core premises and theory behind cloud banking. In essence, the talk was a call to arms for a grassroots-driven sea change in banking based around the following assmptions:
- Banks will continue to engage in speculative activities as long as there are large pools of capital and limited moral hazard.
- Convergence in banking will block microlending necessary for innovation and economic entropy.
- Individuals are better than banks at assessing their risk exposure on a transactional basis.
- Social networks are better prepared to assess the validity of emergent ideas and compensate for economic shock and other disturbances.
Hi.
Interesting talk!
More things to think about:
* Money is no “magic thing”. It is easy to make one’s own money, with self-defined rules. As done with different local currencies. The only crap is that the “System” establishes more and more points to force you to use their money, such making you dependent because you have to get that money.
* What is our money based on? Debt! -> http://www.youtube.com/watch?v=vVkFb26u9g8
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Very fascinating presentation and an even more compelling idea! I’m still thinking about how such a “cloud”-bank could be founded and work in Germany…
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Stefan Reply:
May 30th, 2009 at 05:52
@Marcus, Is it so hard? Actually, I think you could just start an enterprise (15,50€ here, with growing size maybe a GmbH would be better) and then you need a lot of software and security knowledge to make online banking and contact to other banks possible. The hardest thing is probably the contact with other banks, I don’t know what APIs etc. they use.
Maybe one could start with a specialised bank that e.g. gives credits for local authors or similar to produce their books? Then communication with other banks wouldn’t be the striking point and one could leave it out at first. In other parts of Germany, other specialised cloud-banks could be founded and then you could send money from one cloud-bank to another and develop a standardized API. What I want to say: Maybe we can get around the communication with major banks by focussing on the distribution of credits (which makes usage of all the social networking stuff) at first.
Did I at least understand the idea of cloud banking correctly?… I was fascinated by it (if I got it right). Yet, I wouldn’t be self-assured enough for the security-parts, because I think that online banking requires one of the most secure systems out there.
Sorry for my bad English
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meschugge Reply:
June 10th, 2009 at 08:01
@Stefan, I think the Problem is not an API but the social capital aka. trust that is needed. You need a certain reputation and contacts to get into a business relation into the banking sector. But I’m not sure if reputation is really that important (as it evolves over time).
An Alternative could be to convince a existing bank. If enough people become members of the Raiffeisen bank for example they could shift its policy to establish a similar concept.
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Stefan Reply:
June 10th, 2009 at 09:16
@meschugge, Yeah, I thought about that when I was mowing the grass, lol.
Actually, I was also wondering how I – as a cloud bank – could make sure that another cloud bank which wants transfer money to mine is not just faking the existance of the money. I mean, everybody could just create a lot of money… Like “Mr. X” creates a bank which then says to my bank: “Mr. X wants to transfer 1000 dollars”. How can I be sure that these 1000 dollars have been earned somehow (i.e. should at least have once existed as printed money). And ideas?
Mr. Farr, have you a solution for this, since you know banking sector a lot better than me?
meschugge Reply:
June 11th, 2009 at 05:31
@Stefan, you can never be totally sure about it even the traditional banks have the same problem. They try to handle it by asking specialized agencies, that give you that information in the form of a rating.
But if you have a look on Ebay you can see that rating other users works quiet well, only an idiot would buy from someone with a bad rating. User Generated voting works even better than agency rating.
As I already said, I don’t know enough about application security to program a banking software, but I would somehow like to try a “fake” cloud bank. Do you have any idea, how I could program something like this without real money, but still another purpose? Would be stupid to program something that is just useless.
Thanks in advance,
Stefan
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We should found a Verein to establish Cloud Banking in Germany.
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I am not able to find the slides of the presentation here. Are they available?
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Nick Farr Reply:
June 16th, 2009 at 22:54
@Unexpected, Of course, I update the entry so the title gives you this link. Thanks for reminding me!
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Stefan Reply:
June 17th, 2009 at 09:22
@Nick Farr, Thanks, now I can link people here without worrying that they won’t understand the topic until the video is released by the CCC
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Some thoughts to share, about work 2.0 and Cloud Banking:
http://wihi.xihi.de/?p=97
http://wihi.xihi.de/?p=102
to be continued…
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Can anyone elaborate the concept of CLOUD BANKING ? How it differs from day to day banking and what are it’s advanteges and disadvantages ?
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