On 2011-06-12 8:57 AM, Ian G wrote:
I wrote a paper about John Levine's observation of low knowledge, way
back in 2000, called "Financial Cryptography in 7 Layers." The sort of
unstated thesis of this paper was that in order to understand this area
you had to become very multi-discipline, you had to understand up to 7
general areas. And that made it very hard, because most of the digital
cash startups lacked some of the disciplines.

One of the layers you mention is accounting. Recall that in 2005 November, it became widely known that toxic assets were toxic.

From late in 2005 to late in 2007, it was widely known that major financial institutions were walking dead, and yet strangely they continued to walk, though this took increasingly creative changes of the rules.

Today in 2011, there is still no audit that acknowledges that toxic assets were and are toxic.

While doubtless a good monetary system should embrace all these aspects of knowledge, our existing monetary system does not.

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