
The Trusted Supernode and Distributed Banking - realcr
https://www.newtolife.net/the-trusted-supernode-and-distributed-banking.html
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polishninja
| The weak point of the centralized bank is with z: The person that manages
the bank. He has full control over all the balances of all the participants.

Is this really a problem of a bank that needs solving by building a
distributed banking system? Generally, in the banking systems of today there
is a dual control system that makes it hard for a single person to have
complete control.

I know this is a theoretical article but I've noticed quite a few ideas for
"blockchain" banking and similar new systems recently. They are interesting in
theory but I'm not sure they are solving the right problems. I'd be interested
to see some technology that can be implemented at banks today, in the real
world.

~~~
realcr
I agree with you that having a centralized bank is not always a problem. I
admit that I store my money on one of those good old usual banks. I don't
really like my bank, but I'm generally happy with the service it gives me.

I live in a country where there are regulations on what banks can do, which is
cool too. I don't really read the news, but I still get to hear every once in
a while about some government backed bank that has decided to erase some
people's debts. Money invented and gone, out of thin air. However, even those
things are not the main reasons to create a decentralized bank.

Think about the following setting: You want to create a small internet like
network in some place in the world. Maybe a place where you don't have banks
you can really trust, or even a government that you can trust.

So you deploy some boxes, and you get a working network. Everybody on this
network pays some kind of virtual money for his use of the network. (He just
pays for the electricity, and the box does the real work). The balances are
managed by the network itself, somehow. You don't need to find some external
bank to make this work, and fulfil his arbitrary tax or other strange
regulations. You don't have to trust an external bank. You just plug in the
power and it just works.

I don't need the bank here to give me "buyer protection", insurance or the
ability to invest in funds. I just want a tool to make sure that if one person
sends more messages in the network than somebody else, than he needs to
compensate the other person somehow.

Another important reason for which I believe decentralized banks are important
is the ability to deal with micro-payments. One of our biggest problems these
days is how a small amount of people, with limited amount of resources, can
serve billions requests of people from all over the globe. Just check the job
listings. They all search for people that can "Scale the backend".

I don't know if a regular bank can deal with transactions of "move 0.003 cents
from Alice to Bob, for data transfer work". However, I think that a
distributed bank can deal with it pretty well.

I hope that this relates to your question. Please tell me what you think if
you are still around.

------
woah
I'm working on a similar system, but it's quite a bit simpler, can use
national currencies, and does not have supernodes or Byzantine fault tolerance
[http://altheamesh.com/blog/universal-payment-
channels/](http://altheamesh.com/blog/universal-payment-channels/)

I haven't completely specified the routing part yet, but I think it will be
quite easy to extend Babel to incorporate cost as a metric. Due to Babel's
network size limitations, it won't work as a big bad global mesh, but should
work well in the smaller mesh networks we see today.

