Wednesday, May 23, 2012

Community Based Banking (3) Auditors

The various record-keepers in a community would be competing with each other to have the most trust. If one lost a bit of trust, people would quickly shift their business to another recorder. To maintain trust, record-keepers would need to allow anyone who wanted to examine their records to do it. Most would not have time to do it, so someone with spare time might regularly go round and check the records of everyone undertaking this business in the community. These record-auditors would regularly add up the net balance on each record keepers books and check that they netted to zero. This would quickly expose any fraud. The auditors would support the community by publishing their findings.

At first, record communicated would be very simple an manual. As the economy expanded, the record keepers would develop electronic systems. They would eventually develop distributed and mobile systems that would record transactions anywhere in the community. The result would be a fully functioning money system.

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