I can imagine some interesting hooks and capers tied to this banking system. I like the premise quite a bit. I do think, much like current IRL banking, that transactions that exceed local balance would almost always be met with failure until the balance is updated, such that it takes quite a special degree of "value to the bank" to extend credit.
I think the float implications are also interesting...intentional delays on transfers that allow the banking agency (or others) to leverage cash that really isn't theirs by keeping it on their books for a few extra [time units]. I can imagine a clever scenario or two that relies on this as part of industrial espionage or attack...which I suppose might only be interesting to a handful of players like me.
I have only a layman's knowledge of economics or banking, so I'm still trying to get a handle on the full implications of what I'm imagining. That said, you're absolutely right to note the caper possibilities, which is part of why I arranged things as I did. I like worldbuilding to encourage fun scenarios or campaigns.
Interesting...in every sf roleplaying game I've ever played in, this is one of those hand-waved things. You're paid X,000 credits and it's like a bank account on Earth. I think it's one of those things where people just don't find worrying about this to be fun-enhancing. Or perhaps they've never thought about the possibilities to bring it into play.
Hawala could be a relevant model. It's a network system of money transfer in use in many Middle Eastern and sub-continental countries. It originated in the 14th century in India. Since it worked in a time before there was near-instantaneous transmission of information on Earth, perhaps it could work in a future time where there is no neat-instantaneous transmission of information on a galactic scale.
I suspect there may be other medieval methods of managing money that could be reimplemented in the far future...it's really the same problems.
You suspicion is correct: it was the network of medival martial-monks (especially the Knights of the Temple aka Templars) which formed the foundations of modern, international, European banking. .. Using military force, based out of strategically placed strongholds, these monks protected persons and goods travelling along established pilgrimage routes. .. The robustness of these forts as well as a full compliment of well armed soldiers was excellent for securing valuables, and the monastic vows (including poverty) helped establish trustworthiness. .. It was akin to the hawala system you mention, with functions of wadiah (safekeeping) etc common to Islamic and all banking systems. There is a reader-friendly overview published by thecollector[dot]com.
Also and Indeed .. this could make for interesting game play: Who in the context of the setting is politically neutral yet also sufficiently wealthy and powerful (not only militarily, but in terms of cryptographers, etc) to secure banking and trade? A trans-planitary non-governmental organisation (or decentralised cartel/cabal)? Of course there would be independent hawala-like brokers operating outside of such a church/guild .. Historically, banking in such a context was made possible by religious rules, so this would certainly be an opportunity for an intersting monk and/or thief class with an unusual inter-disciplinary skill set :)
@raindog308: The upside here is that it is a non-issue for the players/tables that don't care to engage...they often would have the magnitude of money to have to interact with the bank in that fashion, and thus to them it is a "by the way" that adds flavor without incurring any burden on game play...while still allowing it to be a source of adventure if needs be.
I love this!! It’s very well done. I would imagine all kinds of opportunities for arbitrage, insider-trading, double-dealing, and other chicanery. I haven’t seen this topic dealt with this well before.
In the environment of the Thousand Suns (or any other interstellar society like Traveller’s Third Imperium), I would imagine that financial sight instruments like letters of credit, bearer bonds, certified notes and checks, etc, would become very important aspects of the interstellar economic system—much as they were in the early years of the Age of Sail here on Earth. An interstellar financial participant like a banking house would probably issue such instruments (for a fee of course) to customers who could then take those devices to branches on other planets, present them at the counter (so to speak), and get paid. I can imagine a similar system for even run-of-the-mill checking accounts, promissory notes, and so on. These might be especially useful in outlying systems where the financial updates happen infrequently.
Now, some commonly accepted means of authentication of such instruments would have to exist within the bank or financial house. It would also be updated from time to time. Imagine how valuable a cargo ship holding a big bank’s most recent certification updates would be and what a tempting target it might make for pirates! Additionally, I would expect a bank or other financial concern to put limits on how large instrument a customer could present depending on the size of a bank’s branch on any particular world. One could only present the largest instruments at branches on the biggest, most populated, and technologically advanced worlds. Many smaller, more backward worlds probably wouldn’t even participate in this interstellar economy because the marginal cost to the financial actors of bringing those worlds into the system would just be too high. That also presents some interesting scenarios!
Frankly, this post has given me a host of new ideas for my current Traveller campaign. I just love it!!! More like this please!
Just a tiny tweak - much like the Enigma machine was only valuable if no one knew it was stolen, the same applies to the certification ciphers. A great target to clandestinely copy, but not to overtly steal!
I have a somewhat different approach for finance in the main polity of my slowly fermenting Classic Traveller setting (“A Ribbon, Torn”).
The Chancery’s Chapter of Keepers of Secrets has a monopoly on quantum-proof asymmetric cryptography, enforced as part of the Index of forbidden subjects. An interstellar guild similarly has the sole grant on knowledge of lithography for building computing machinery; though not a part of the royal government, it is closely monitored, especially in the construction and output of fabs. Earlier forms of cryptography (like the number-theoretic RSA) are not off-limits, but the royal authorities are quite ready to provide quantum computers to subvert them. Symmetric encryption, like humans have used for millennia, is common. For real secrecy, there are one-time keypads.
The ramifications? The royal fiat currency is a cryptocoin issued by the Chapter and tracked in a distributed ledger (i.e., blockchain ). Only the Chapter can transact in the ledger, so local commerce is usually conducted in local currencies. Conversion to and from the royal coin is only possible by the Chapter. Trying to convert a single instance of the king’s money more than once would require outrunning the imperial couriers (jump-6 is restricted technology) and attempts are highly punished. Conversions provide some income and intelligence to the court. (A bit in the weeds, but only the royal court has the keys to actually create money; the lower levels of the Chapter must ultimately tie their transactions in the ledger to such issuance.)
Without asymmetric encryption, local finance looks more like we had decades or centuries ago, and the currencies will take many forms, particularly depending on tech level. E-commerce and internets like we have here do not exist.
The royal coin allows movement of money over long distances and even for shorter trips between worlds where the Chapter has a presence. (Class A starports? Class B? Don’t know yet.) It will be held in wallets guarded by biometrics and passwords.
Those who want to avoid its use, to avoid the fees or for other reasons, like secrecy, have options. They might directly trade in goods (a good use of Traveller’s rules). Currencies of neighboring worlds might have other conversion options (e.g., blackmarket). Merchant houses may keep internal ledgers of their own, but these will have to be facilitated on trust.
I can imagine some interesting hooks and capers tied to this banking system. I like the premise quite a bit. I do think, much like current IRL banking, that transactions that exceed local balance would almost always be met with failure until the balance is updated, such that it takes quite a special degree of "value to the bank" to extend credit.
ReplyDeleteI think the float implications are also interesting...intentional delays on transfers that allow the banking agency (or others) to leverage cash that really isn't theirs by keeping it on their books for a few extra [time units]. I can imagine a clever scenario or two that relies on this as part of industrial espionage or attack...which I suppose might only be interesting to a handful of players like me.
I have only a layman's knowledge of economics or banking, so I'm still trying to get a handle on the full implications of what I'm imagining. That said, you're absolutely right to note the caper possibilities, which is part of why I arranged things as I did. I like worldbuilding to encourage fun scenarios or campaigns.
DeleteInteresting...in every sf roleplaying game I've ever played in, this is one of those hand-waved things. You're paid X,000 credits and it's like a bank account on Earth. I think it's one of those things where people just don't find worrying about this to be fun-enhancing. Or perhaps they've never thought about the possibilities to bring it into play.
DeleteHawala could be a relevant model. It's a network system of money transfer in use in many Middle Eastern and sub-continental countries. It originated in the 14th century in India. Since it worked in a time before there was near-instantaneous transmission of information on Earth, perhaps it could work in a future time where there is no neat-instantaneous transmission of information on a galactic scale.
I suspect there may be other medieval methods of managing money that could be reimplemented in the far future...it's really the same problems.
Thank you for putting me wise to hawala, RainDog!
DeleteYou suspicion is correct: it was the network of medival martial-monks (especially the Knights of the Temple aka Templars) which formed the foundations of modern, international, European banking. .. Using military force, based out of strategically placed strongholds, these monks protected persons and goods travelling along established pilgrimage routes. .. The robustness of these forts as well as a full compliment of well armed soldiers was excellent for securing valuables, and the monastic vows (including poverty) helped establish trustworthiness. .. It was akin to the hawala system you mention, with functions of wadiah (safekeeping) etc common to Islamic and all banking systems. There is a reader-friendly overview published by thecollector[dot]com.
Also and Indeed .. this could make for interesting game play: Who in the context of the setting is politically neutral yet also sufficiently wealthy and powerful (not only militarily, but in terms of cryptographers, etc) to secure banking and trade? A trans-planitary non-governmental organisation (or decentralised cartel/cabal)? Of course there would be independent hawala-like brokers operating outside of such a church/guild .. Historically, banking in such a context was made possible by religious rules, so this would certainly be an opportunity for an intersting monk and/or thief class with an unusual inter-disciplinary skill set :)
Cheerio, Matthew.
@raindog308: The upside here is that it is a non-issue for the players/tables that don't care to engage...they often would have the magnitude of money to have to interact with the bank in that fashion, and thus to them it is a "by the way" that adds flavor without incurring any burden on game play...while still allowing it to be a source of adventure if needs be.
DeleteI love this!! It’s very well done. I would imagine all kinds of opportunities for arbitrage, insider-trading, double-dealing, and other chicanery. I haven’t seen this topic dealt with this well before.
ReplyDeleteIn the environment of the Thousand Suns (or any other interstellar society like Traveller’s Third Imperium), I would imagine that financial sight instruments like letters of credit, bearer bonds, certified notes and checks, etc, would become very important aspects of the interstellar economic system—much as they were in the early years of the Age of Sail here on Earth. An interstellar financial participant like a banking house would probably issue such instruments (for a fee of course) to customers who could then take those devices to branches on other planets, present them at the counter (so to speak), and get paid. I can imagine a similar system for even run-of-the-mill checking accounts, promissory notes, and so on. These might be especially useful in outlying systems where the financial updates happen infrequently.
Now, some commonly accepted means of authentication of such instruments would have to exist within the bank or financial house. It would also be updated from time to time. Imagine how valuable a cargo ship holding a big bank’s most recent certification updates would be and what a tempting target it might make for pirates! Additionally, I would expect a bank or other financial concern to put limits on how large instrument a customer could present depending on the size of a bank’s branch on any particular world. One could only present the largest instruments at branches on the biggest, most populated, and technologically advanced worlds. Many smaller, more backward worlds probably wouldn’t even participate in this interstellar economy because the marginal cost to the financial actors of bringing those worlds into the system would just be too high. That also presents some interesting scenarios!
Frankly, this post has given me a host of new ideas for my current Traveller campaign. I just love it!!! More like this please!
Just a tiny tweak - much like the Enigma machine was only valuable if no one knew it was stolen, the same applies to the certification ciphers. A great target to clandestinely copy, but not to overtly steal!
DeleteI have a somewhat different approach for finance in the main polity of my slowly fermenting Classic Traveller setting (“A Ribbon, Torn”).
ReplyDeleteThe Chancery’s Chapter of Keepers of Secrets has a monopoly on quantum-proof asymmetric cryptography, enforced as part of the Index of forbidden subjects. An interstellar guild similarly has the sole grant on knowledge of lithography for building computing machinery; though not a part of the royal government, it is closely monitored, especially in the construction and output of fabs. Earlier forms of cryptography (like the number-theoretic RSA) are not off-limits, but the royal authorities are quite ready to provide quantum computers to subvert them. Symmetric encryption, like humans have used for millennia, is common. For real secrecy, there are one-time keypads.
The ramifications? The royal fiat currency is a cryptocoin issued by the Chapter and tracked in a distributed ledger (i.e., blockchain ). Only the Chapter can transact in the ledger, so local commerce is usually conducted in local currencies. Conversion to and from the royal coin is only possible by the Chapter. Trying to convert a single instance of the king’s money more than once would require outrunning the imperial couriers (jump-6 is restricted technology) and attempts are highly punished. Conversions provide some income and intelligence to the court. (A bit in the weeds, but only the royal court has the keys to actually create money; the lower levels of the Chapter must ultimately tie their transactions in the ledger to such issuance.)
Without asymmetric encryption, local finance looks more like we had decades or centuries ago, and the currencies will take many forms, particularly depending on tech level. E-commerce and internets like we have here do not exist.
The royal coin allows movement of money over long distances and even for shorter trips between worlds where the Chapter has a presence. (Class A starports? Class B? Don’t know yet.) It will be held in wallets guarded by biometrics and passwords.
Those who want to avoid its use, to avoid the fees or for other reasons, like secrecy, have options. They might directly trade in goods (a good use of Traveller’s rules). Currencies of neighboring worlds might have other conversion options (e.g., blackmarket). Merchant houses may keep internal ledgers of their own, but these will have to be facilitated on trust.