Member-only story
Why is the Internet Financial System so compelling?
Closed money systems are still dominating economies. All the dollars that you don’t have in cash form is held at the N.Y. Federal Reserve. You can’t access that money unless you’re one of the member banks. Banks are inefficient middleware separating you from your money. Banks aren’t efficient at talking to each other, either. That’s why it takes days to move money internationally or $30 to send a wire from one bank to another.
Mobile money systems such as PayPal or telecom-based systems are closed, too. They are just an overlay on top of existing banks. It still takes over a day to move money from one of those systems to your bank account. Just like banks, these similarly closed systems sure have their limits. Ask my girlfriend, who still cannot access her Venmo account because she lost her password and Venmo customer support makes a sloth look like a sprinter.
Yet we have an alternative: open financial systems.
Secure transactions safeguarded by cryptography in the internet’s next generation — Web3 — provides an exciting, open alternative. As a global collection of computers connected through a common software protocol, these cryptographic platforms like Ethereum or Solana can power an open financial system. Payment tokens are the currency of these systems. Economies can move from fragile currency propped up by fiat (dollars, pesos) to currency hardened by strong code (tokens).
