Simon Dixon: The banking system is a Ponzi Scheme, and how Bank To The Future looks to fix that

Date: Sat Sep 05 2015 ; Tags: Bitcoin

The existing banking system is basically a fraud that's designed to fail. Bitcoin can change all that by ensuring we own our money, and money isn't lent into existence. Bank To The Future is an investment company focusing on the Bitcoin/Blockchain space.

Simon Dixon is the author of a book discussing fundamental problems with the banking system. He wrote the book before Bitcoin was unveiled to the world. He became involved with Bitcoin at its inception because of its potential to solve those fundamental problems.

The problems are built into the money system, he says, and the design of that system must result in a boom/bust cycle of expansion and collapse. Some collapses are minor, while others are enormous.

The problems are that

1. Money is debt - to keep the economy going, individuals have to take on more debt, corporations have to take on more debt, and governments have to take on more debt
2. Economics have made an incorrect assumption that Banks are Intermediaries between lenders and borrowers
3. Instead, banks are the creators of money, becuase Money is "lent into existence" by the banks

Properties that have to be solved in the money system

1. When you deposit money in the bank, the bank becomes the legal owner of your money - you don't own your money
2. Banks, as the legal owner of our money, can spend it on what they wish
3. Banks are the creators of mony, by their role in lending money into existence. Governments create a small amount of money compared to the banks.

These factors result in the money system being allocated to the most profitable endeavor -- namely financial services, specifically in the property market. Only a small amount of the money allocated by banks goes to productive economic activity that creates jobs. The vast majority of money is allocated to trading financial instruments.

Bitcoin could solve these issues because

1. You own your money
2. Bitcoins are directly transferred at very low cost
3. Bitcoins are created through mining, and the total pool of bitcoins is fixed in size