The problem with Global finance and banking isn’t a tecnological one.

The media has delighted in a story about a Canadian crypto currency exchange QuadrigaCX. The CEO tragically passed away, whilst in India doing humanitarian work, and no one else has the ability to acces the account. There’s around £140m of frozen crypto currency sitting inaccessible. Or rather, the password to access the account to access the crypto currency is inaccessible. And here we see a problem of decentralised systems.

For one thing, the systems aren’t really decentralised, from a individual perspective. There’s no central point of control, but there are multiple ‘hubs’ or ‘nodes’ of control, and the individual in the systems can be subject to them. The crypto exchange is one such example. 

And there is the problem. There’s ‘hubs’ of control, but with no central point of authority, so there’s no one to turn to when things go badly. 

In the instance of QuadrigaCX it may be that the passwords can be recovered from the CEO’s laptop, perhaps, although that also is encrypted. It may be there’s nothing that can be done, other than learning a lesson.

In a regulated bank, this just couldn’t happen. And wouldn’t happen. Processes and procedures would be in place. But the lack of regulation around crypto currency creates a situation where this kind of simplistic tragedy becomes a total disaster for the company and the investors.

Without centralisation, there can be no regulation. The best kind of centralisation is a benevolent one, acting in the interests of everyone in the network. The kind of centralisation that frequently happens in finance is a concentration of power and wealth acting in the interests of the concentration of power and wealth. 

The problem with global banking and finance isn’t a technological one, it’s a humanitarian one,

The problem with crypto currencies is the same. The proliferation of exploitation and frauds, the use of the currency as a means of anonymised monetisation of unlawful and unethical practices, and of course, the centralisation of the power and wealth. 

Regardless of the technology used , the old banking system and the new one would invariably come to look very much the same. Just as the internet started as a decentralised web, the dynamics and forces of business strive to re centralise it. 

If we really want a different outcome, and a different financial system, it’s not the technology that needs radical change. It’s us.