Some comments on the economics of the series

SWM wrote:Where do you get the idea that the Junction has been virtually closed? Only one terminus of the Junction leads into Solarian space; all the rest of the termini are open for business. And business is picking up on many of those routes. The Merchant Marine has only been recalled from Solarian space. Manticoran merchants are still plying the spaceways to the Talbott cluster, the Anderman Empire, the Phoenix Cluster, Matapan, Basilisk and the Silesian quadrant, and now into Trevor's Star and Haven space.

Also, by now Manticore has some of its manufacturing capacity rebuilt. If White Haven was correct about his predictions, some of the smaller shipyards have to be in service building the first new ships by the end of Cauldron of Ghosts. If shipyards have been built already, I think we can assume that some factories have also been rebuilt by now.

Manticore is doing fine. They've lost trade within the Solarian League, but they still have plenty of trade with other areas, and manufacturing is coming back online.

In point of fact, none of the Manticoran Wormhole Junction's termini are shut down at the moment. The only one connecting to Solarian space also happens to connect to the Beowulf System, and the Grand Alliance has most definitely not closed that terminus, since Beowulf is currently a de facto and will soon be a de jure member of the aforesaid Grand Alliance.

For that matter, Manticore (and the Grand Alliance) now has control of a great many additional wormhole termini, and the fact that the Solarian League's merchant fleet is no longer being allowed to use them doesn't mean that the Manticoran merchant fleet can't. All Manty merchantmen were called home as part of the initial Operation Laocoön as the first stage in ratcheting up pressure on the Sollies (and, frankly, to get them out of the way before additional Solarian system governors had the same stupid idea of seizing them to use as hostages against the Star Empire). Once Lacoön II went into effect and the RMN began actively seizing other termini, those termini became available once again to the Manticoran merchant marine. Now, Manticore has no objection to carrying freight for people who are willing to ship it in Manticoran bottoms. In fact, Manticore sees this as a way to gently and gradually pry the people making use of their merchant fleet away from loyalty to the Mandarins. Carrying commerce for them will lessen the economic hit they take from what is effectively the Manticoran blockade while continuing to deny the service fees and shipping duties which fund the Solarian League's bureaucracy.

At the moment, the Star Empire has no intention of holding on to all of those other termini permanently. That doesn't mean that they won't hold on to some of them on a permanent basis, however. In addition, Manticore will probably negotiate an arrangement under which Manticoran shipping pays lower transit fees for other people's termini as part of mutual defense treaties which obligate the RMN to safeguard those termini. In other words, if the normal shipping duty for a 4,000,000 ton freighter, for example, was $10,000, Manticore might pay $7,500 in return for a guaranteed right of passage in time of war from the terminus' legal owner and a Manticoran guarantee to protect the legal owner's territorial integrity and possession of the terminus.

In general, one may assume that the Star Empire is going to continue its support of free trade, to continue to recognize the right of those who have wormhole termini to charge reasonable transit fees, and to be perfectly willing to act as the first line of defense/interstellar guardians of the wormhole network. It is quite probable that the Star Empire will insist on permanent possession of (or at least very, very long-term leases on) termini which belonged to especially bad actors before the war with the League. By the same token, it is very probable that the Star Empire will set up — probably in coordination with other members of the Grand Alliance — some sort of interstellar authority which would move in to stabilize and/or eliminate military threats to traffic through a terminus or the imposition of clearly confiscatory-level transit fees. In that case, however, Manticore would very, very much prefer a multi-nation board with a rotating chairmanship so that it would not be perceived as (and could not in fact become) a Manticoran version of OFS.

In response to the concerns being expressed over how withdrawals might be managed/policed over intrasystem distances. To be honest, this problem is simply not going to arise very often because people who are going to be making bank transactions will tend to be clustered in certain areas of the star system. It's unlikely that anyone is ever going to build a casino in orbit around Neptune or a shopping mall in orbit around Uranus. There are several ways in which banking institutions can deal with this sort of problem on the rare occasions when it arises. A given bank may use any and/or all of the approaches listed below.

First, if a banking institution has multiple nodes in a single star system and they are more than a very few minutes apart in terms of transmission times, then any customer's account may be distributed across all of those notes. That is, if the bank has 4 nodes, then no more than 25% of the account holder's funds may be withdrawn from any one of those nodes except by prior arrangement. This doesn't prevent a theoretical simultaneous withdrawal of funds from two separate locations, one of which might be unauthorized, but it does limit the percentage of funds which could be skimmed/scammed in this way.

Second, every Manticoran bank (and virtually every major non-Manticoran bank) issues electronic, encrypted withdrawal cards (or their equivalent) which must be presented for a withdrawal. The account holder may select the number of cards to be issued; once they are issued, however, it is the account holder's responsibility to maintain secure possession of them. By law (at least in Manticore) any funds disbursed to the holder of a verified card cannot be recovered from the bank by the account holder unless there is proof of wrongdoing by the banking institution. If it can be demonstrated that the card was illegally in the withdrawer's possession, then the withdrawer is legally liable for the funds, but the bank is not. If it can be demonstrated that the card was counterfeit or that the bank's security was hacked (whether by the bank or the withdrawer), then the bank becomes liable for restitution of funds on the basis that it should be more careful about its own electronic security.

Third, in most star systems it is the account holder's responsibility to inform the bank if he is traveling to a location which is going to be beyond reasonable light-speed-limited transmission ranges of his normal bank branch, just as it is the responsibility of a debit card in the United States to inform his bank if he's going to be traveling overseas or spending enough time in another state for him to have significant banking activity. The bank reserves the right to refuse to allow withdrawals from a distant site unless it has been informed and had of time that the customer will be traveling to that site.

Fourth, many banking institutions specifically state in their contracts with their account holders that transactions and payments will not be made until there's been sufficient time for notice of the transaction to reach their central banking hub in a given star system and confirmation of it to return to the site at which the transaction or payment is to be made. This may occasionally be inconvenient, but it would be highly unlikely for any transaction to be more than four or five light-hours from the bank's central hub. The maximum distance between Neptune and Earth, for example, is about 4.34 light-hours, so turnaround time on a transmission across that distance (which is enormously greater than most people are going to have to worry about in a star system) would be under 9 hours.

Fifth, the Banco de Madrid is not (by any means) the only bank which issues the equivalent of coins. A prudent traveler takes a supply of those, issued by his own bank, with him in a highly unlikely instance in which he's going to travel so far from home with in his own star system that communications lag would become a problem. It's also common practice for the account holder to "wire" what he considers to be a sufficient balance to a bank node at his destination, with the understanding that his withdrawals from that node will be limited to the funds he transferred into it.

Frankly, as I say, this situation is going to arrive very, very infrequently. The possibility/probability of deliberate fraud factors into the banking industry's basic assumptions, and practical safeguards have been worked out to prevent it. Those safeguards may, on occasion, fail, but when they do, it is almost always the result of deliberate criminal activity which brings in the legal authorities and in which liabilities are clearly established by law.

SWM wrote:Where do you get the idea that the Junction has been virtually closed? Only one terminus of the Junction leads into Solarian space; all the rest of the termini are open for business. And business is picking up on many of those routes. The Merchant Marine has only been recalled from Solarian space. Manticoran merchants are still plying the spaceways to the Talbott cluster, the Anderman Empire, the Phoenix Cluster, Matapan, Basilisk and the Silesian quadrant, and now into Trevor's Star and Haven space.

Also, by now Manticore has some of its manufacturing capacity rebuilt. If White Haven was correct about his predictions, some of the smaller shipyards have to be in service building the first new ships by the end of Cauldron of Ghosts. If shipyards have been built already, I think we can assume that some factories have also been rebuilt by now.

Manticore is doing fine. They've lost trade within the Solarian League, but they still have plenty of trade with other areas, and manufacturing is coming back online.

The only terminis that really matters in the big picture IS the terminis leading to Solarian space.

The Solarian League IS the market in known space. Take all of Manticore, all of Haven, all of Anderman Space, all of Silesia, all of the Talbot Quadrant, Allof it and put all together it is a miniscule fraction of the economy and markets of the 1,200+ worlds, many of them incredibly wealthy, that comprise the Solarian League.

Regardless of how you slice it, the VAST majority of cargos passing through the Junction are either carrying cargos from League worlds or too League worlds and that trade and everything that goes with it has just ended.

The Manticorian merchant fleet isn't primarily engaged is hauling cargos from Manticore or the rim to Solarian space, the Vast majority if it is hauling cargos from one Solarian world to another Solarian world. That's what happens when you have over 1,000 a large number of the MAJOR worlds that are trading with each other. That produces tax revenues for Manticorian shippers which produces taxes for the crown. Of course you've recalled your entire merchant fleet so that's virtually all dried up as well.

So who do you have left to trade with. Haven has around 100 worlds but only a few of those would actually be considered major worlds in comparison to League standards and they are all trying to pull themselves out of a century of the most hideous economic abuse possible. Then you have the Andermani who have a few decent worlds and then a few score of Verge and Rim worlds with what, by Solarian Standards, would hardly register on the trading scale.

Yes, Manticore can trade with them provided it can produce anything to trade but that will produce a tiny fraction of the revenue that has been lost, provided those shipping firms actually manage to turn a profit of some kind with the economic upheaval going on and their primary markets closed off.

Basically, it's your conjecture that since Manticore can still trade with maybe 5% - 10% of it's market and trading partners that losing the other 90% isn't such a big deal. Well do the math, it is a VERY big deal.

Simply put, if the Alignment has plannedto utterly destroy the entire Manticorian economy, between Oyster Bay and the actions already taken by the crown, they couldn't have come up with a much better plan to do it.

You're right, Manticore is going to be fine because if it isn't then unless you enjoy reading about economic devastation, it's not going to make a very interesting book. But I am eager to see what kind of handwavium or divine writers intervention it's going to take to do so.

Alizon wrote:

SWM wrote:Where do you get the idea that the Junction has been virtually closed? Only one terminus of the Junction leads into Solarian space; all the rest of the termini are open for business. And business is picking up on many of those routes. The Merchant Marine has only been recalled from Solarian space. Manticoran merchants are still plying the spaceways to the Talbott cluster, the Anderman Empire, the Phoenix Cluster, Matapan, Basilisk and the Silesian quadrant, and now into Trevor's Star and Haven space.

Also, by now Manticore has some of its manufacturing capacity rebuilt. If White Haven was correct about his predictions, some of the smaller shipyards have to be in service building the first new ships by the end of Cauldron of Ghosts. If shipyards have been built already, I think we can assume that some factories have also been rebuilt by now.

Manticore is doing fine. They've lost trade within the Solarian League, but they still have plenty of trade with other areas, and manufacturing is coming back online.

The only terminis that really matters in the big picture IS the terminis leading to Solarian space.

The Solarian League IS the market in known space. Take all of Manticore, all of Haven, all of Anderman Space, all of Silesia, all of the Talbot Quadrant, Allof it and put all together it is a miniscule fraction of the economy and markets of the 1,200+ worlds, many of them incredibly wealthy, that comprise the Solarian League.

Regardless of how you slice it, the VAST majority of cargos passing through the Junction are either carrying cargos from League worlds or too League worlds and that trade and everything that goes with it has just ended.

The Manticorian merchant fleet isn't primarily engaged is hauling cargos from Manticore or the rim to Solarian space, the Vast majority if it is hauling cargos from one Solarian world to another Solarian world. That's what happens when you have over 1,000 a large number of the MAJOR worlds that are trading with each other. That produces tax revenues for Manticorian shippers which produces taxes for the crown. Of course you've recalled your entire merchant fleet so that's virtually all dried up as well.

So who do you have left to trade with. Haven has around 100 worlds but only a few of those would actually be considered major worlds in comparison to League standards and they are all trying to pull themselves out of a century of the most hideous economic abuse possible. Then you have the Andermani who have a few decent worlds and then a few score of Verge and Rim worlds with what, by Solarian Standards, would hardly register on the trading scale.

Yes, Manticore can trade with them provided it can produce anything to trade but that will produce a tiny fraction of the revenue that has been lost, provided those shipping firms actually manage to turn a profit of some kind with the economic upheaval going on and their primary markets closed off.

Basically, it's your conjecture that since Manticore can still trade with maybe 5% - 10% of it's market and trading partners that losing the other 90% isn't such a big deal. Well do the math, it is a VERY big deal.

Simply put, if the Alignment has plannedto utterly destroy the entire Manticorian economy, between Oyster Bay and the actions already taken by the crown, they couldn't have come up with a much better plan to do it.

You're right, Manticore is going to be fine because if it isn't then unless you enjoy reading about economic devastation, it's not going to make a very interesting book. But I am eager to see what kind of handwavium or divine writers intervention it's going to take to do so.

I believe you are grossly overestimating the impact. I don't believe that the Solarian League was 90+% of the Manticoran market. Yes, it is a big hit, but not as big as you think. You mention that Haven has 100 planets, but you forget about the other 200+ former members of Haven which are also now open to Manticoran business. Then there is the entirely new market around the Talbott Cluster. And there are all the wormholes that Manticore has captured, as RFC just mentioned, all of which are open for Manticoran business. And Manticore did not serve all 1200 or whatever Solarian League members in the first place.

SWM wrote:Where do you get the idea that the Junction has been virtually closed? Only one terminus of the Junction leads into Solarian space; all the rest of the termini are open for business. And business is picking up on many of those routes. The Merchant Marine has only been recalled from Solarian space. Manticoran merchants are still plying the spaceways to the Talbott cluster, the Anderman Empire, the Phoenix Cluster, Matapan, Basilisk and the Silesian quadrant, and now into Trevor's Star and Haven space.

There are something on the order of 3000 SL systems, with at least 1000 top tier systems. Haven has about 20 of those, the Andies about 20, Manticore 1 and Grayson 1. In terms of systems, there are something like 300 total in the set of Haven, Andy, and Manticore claimed or allied systems, and most of them are poor and undeveloped. So yeah, other then having stopped 90%+ of the traffic and trade in the entire universe, it's just like it was before.

As I said before, it's roughly equivalent to a US airline dropping all their flights to the EU, Russia, Australia Japan and China and redirecting all their airplanes to Africa, Fiji and Malaysia. I don't see how you can replace 20 flights a day to Paris with 20 flights a day to Niamey Nigeria and expect to not go broke.

Alizon wrote:

SWM wrote:Where do you get the idea that the Junction has been virtually closed? Only one terminus of the Junction leads into Solarian space; all the rest of the termini are open for business. And business is picking up on many of those routes. The Merchant Marine has only been recalled from Solarian space. Manticoran merchants are still plying the spaceways to the Talbott cluster, the Anderman Empire, the Phoenix Cluster, Matapan, Basilisk and the Silesian quadrant, and now into Trevor's Star and Haven space.

Also, by now Manticore has some of its manufacturing capacity rebuilt. If White Haven was correct about his predictions, some of the smaller shipyards have to be in service building the first new ships by the end of Cauldron of Ghosts. If shipyards have been built already, I think we can assume that some factories have also been rebuilt by now.

Manticore is doing fine. They've lost trade within the Solarian League, but they still have plenty of trade with other areas, and manufacturing is coming back online.

The only terminis that really matters in the big picture IS the terminis leading to Solarian space.

The Solarian League IS the market in known space. Take all of Manticore, all of Haven, all of Anderman Space, all of Silesia, all of the Talbot Quadrant, Allof it and put all together it is a miniscule fraction of the economy and markets of the 1,200+ worlds, many of them incredibly wealthy, that comprise the Solarian League.

Regardless of how you slice it, the VAST majority of cargos passing through the Junction are either carrying cargos from League worlds or too League worlds and that trade and everything that goes with it has just ended.

The Manticorian merchant fleet isn't primarily engaged is hauling cargos from Manticore or the rim to Solarian space, the Vast majority if it is hauling cargos from one Solarian world to another Solarian world. That's what happens when you have over 1,000 a large number of the MAJOR worlds that are trading with each other. That produces tax revenues for Manticorian shippers which produces taxes for the crown. Of course you've recalled your entire merchant fleet so that's virtually all dried up as well.

So who do you have left to trade with. Haven has around 100 worlds but only a few of those would actually be considered major worlds in comparison to League standards and they are all trying to pull themselves out of a century of the most hideous economic abuse possible. Then you have the Andermani who have a few decent worlds and then a few score of Verge and Rim worlds with what, by Solarian Standards, would hardly register on the trading scale.

Yes, Manticore can trade with them provided it can produce anything to trade but that will produce a tiny fraction of the revenue that has been lost, provided those shipping firms actually manage to turn a profit of some kind with the economic upheaval going on and their primary markets closed off.

Basically, it's your conjecture that since Manticore can still trade with maybe 5% - 10% of it's market and trading partners that losing the other 90% isn't such a big deal. Well do the math, it is a VERY big deal.

Simply put, if the Alignment has plannedto utterly destroy the entire Manticorian economy, between Oyster Bay and the actions already taken by the crown, they couldn't have come up with a much better plan to do it.

You're right, Manticore is going to be fine because if it isn't then unless you enjoy reading about economic devastation, it's not going to make a very interesting book. But I am eager to see what kind of handwavium or divine writers intervention it's going to take to do so.

Are you under the impression that the Beowulf Terminus is the only terminus of any warp bridge that enters Solarian space?

I have repeatedly stated that one of the reasons the MWHJ is so important is because it gives access to the entire network of termini around the League's periphery. And that network allows access to almost every portion of the Solarian League. Which is the very reason that shutting it down to non-Manticoran shipping adds so much time to any Solarian interstellar transit times.

During the decades of war between Spain and the rebellious Netherlands, the Dutch financed much of their war effort by continuing to provide the carrying trade for Habsburg commerce (including Spain's) even during periods of active operations. Much of the Armada's artillery had been cast in Protestant --- including Dutch and English --- foundries, and the money Spain paid for those guns helped finance the English galleons which defeated it.

The situation in the HV is not completely analogous to that episode, but there are definitely similarities. The SEM now has access to/control of better than 90% of the total wormhole network, and the RMN is in position to provide security against commerce raiders in virtually all of the systems to which they connect. Do you seriously think that Solarian transtellars (or anyone else whose livelihood absolutely depends on moving his products to other star systems) are going to balk at using Manty bottoms to do the moving? If you do, then you have an imperfect understanding of just how corrupt and "go along to get along" Solarian interstellar commerce has become. I do not mean to suggest for a moment that the SL's commerce is going to be booming along at pre-war levels, nor do I mean to suggest that there won't be a great many Solarian businesses which will refuse to use Manty merchies even if it leaves them facing significant financial loss or even bankruptcy. But I will positively guarantee you that there will also be a great many of those businesses who will use those merchies to avoid bankruptcy. And there are even going to be quite a lot of system governments who will wink at the use of Manty shipping, given their lack of institutional loyalty to the Mandarins. And, in the meantime, Manticore is going to be levying special transit fees on all non-Manticoran shipping through any of the termini it now controls as an emergency wartime measure. Again, let me stress that Manticore has no objection to Solarian commerce continuing so long as it does so under Manty supervision and conditions . . . and so long as none of the fees and duties previously going to the SL's bureaucracies continue to do so. Indeed, there are huge arguments in favor of allowing that commerce to continue, so long as it doesn't contribute to the war effort against the GA, if only as a means of generating good PR for the SEM.

"See how reasonable we're being? Or trying to be, anyway, when the League lets us! Unfortunately, we can't allow the Mandarins to use these termini to prosecute the war against us, and we have every reason to deny the League the revenues it's historically generated off of the Solarian merchant marine and the service fees we're no longer allowing anyone to collect. But we don't want to put anyone out of business unless we have to, so we're taking over the astro control functions you used to pay the SL to provide, and our emergency transit fees will come to only 50% of what you used to pay OFS and the League. And as soon as this unpleasantness is concluded, we'll happily go back to allowing free transit to anyone, including Solarian-register freighters."

Manticore is going to take a hit, and it's going to be a heavy one, but the only way it could turn into the sort of debacle you're positing, would be for the GA to lose the war. A war that ran long enough could still do serious damage, even if the GA won in the end, but nothing short of outright defeat --- the kind that leaves the SL in control of the MWHJ --- could produce the sort of free fall you've described.

Brigade XO wrote:So many threads.

If two withdrawals are made from an account without enough to cover both, the one that gets there 1st is the one that gets paid. There are exceptions. One occurs when a bank takes the specifice step -when multiple checks/withdrawals hit the same day but there is not enough to pay all of them, they pay the greatest number if individual items and return (and charge for the overdraft that would have been caused) the rest. This presumes that they do the more or less standard batch clearing of physical items at end-of-day.

With the advent of real time electronic interchange, it is POSSIBLE for a bank on one side of the planet to get paid against a check it processes AT THE TELLER with the proper electronic equipment (reads the MICR encoding and the amount the teller puts in). The funds are at the same time "withdrawn" from the person's account with the bank the check is drawn on.

If you end up with real-time banking across inter-planitary distances (even with FTL) then the transaction that gets there first and "hits the account" is the one that is paid. Sorting out who was doing what -when then becomes a subject for discussion between the two people trying to chash the checks (well, the one who doesn't get their check cashes/withdrawal made) with the other party.

Sure, but even FTL comms aren't real-time between the Junction and Manticore, and that's in the same system. (Admittedly they're only about 7 minutes comm lag; plus maybe a bit more for relaying overhead)

Even with FTL comm, if two people happen to cash checks 7 light hours away within 7 minutes of each other, the 2nd branch doesn't / can't yet that money has been withdrawn at the 1st branch.


It's not insurmountable, and RFC was nice enough to list out for us a number of those alternatives to addressing this; in those rare cases it comes up.

But I found it an interesting digression into some of the unusual (and uncommon) issues that a system wide banking network might need to think about (even if it works pretty seamlessly to their customers). It's often these weird corner cases, that almost never come up, that are fun to think about.

Had to sign up about this. People are taking about cheques, and clearing houses, but why would they have them?

I live in the UK, and I have not had a check book in 15 years, no one I know has a check book, unless they happen to be self employed, and even then not all of them do. It is over 10 years since I had to deposit a check. About the only stores that now like to handle cheques are mostly those that cater to trades.

Hi Jonathan_S,

While personally think the Manticore financial industry would find the advantages of FTL transactions worth renting RMN FTL.comms, even light speed could be faster than you think.

While all traffic between the junction and Manticore is done by Manticore and in Manticore ships etc, before the double man security crisis of AAC caused by the nano-tech attempted assassination of HH [before she was HA-H] by Tim Meares, it seemed rather simple to have db's outside the RZ and H-L micro-jump from the junction to Manticore a then transmit the double encoded financial data to Manticore and receive new data including the confirmation of earlier transmitted downloads possibly from a buoy waiting just inside the RZ/H-L, which the db relays back at the WHJ when it returns to its spot near the junction.

Given the routine nature of the micro-jumps [at least hourly] the navigation is almost boring as shuttle flights [I remember shuttle flights leaving Washington International -before it was Reagan- every 15 minutes or as soon as they were full for NYC back in the '60's], so precision and response time is dramatically improved.

Bearing in mind there are at least 4 'sides' to the RZ/H-L, a db could leave the WHJ every 15 minutes with the latest financial and economic data microjump [or microhop?] to Manticore A, transmit then receive and return in an hour or less, in succession so data on Manticore would be only ~15 minutes behind the WHJ.

If using FTL.comms it could be 5 minutes or less.

Then there's the possibility of sending financial data through the wormhole bridge to the financial center on the other side like Beowulf, so db's wouldn't be necessary but secured communications would so a hyper capable 'commo barge' [no need for speed away from a wormhole] would receive the latest data then pass through to the other side download then receive and return depending on the schedule, again with a number taking turns to reduce the interval to 15 minutes or whatever is considered optimum.

Financial and economic information would seem to be among the most obvious or precious of the data being sent through the wormholes.

Then db's could then deliver daily or weekly summaries to other systems and termini where the process is repeated again etc.

Such systems could have been in place for a century or three at all the wormhole bridges, enabling financial and economic data to reach more of the colonized galaxy faster than ever before.

OTOH, such a network would tend to emphasize the central importance of Manticore given all the dispatches with a Manticore header etc on them; which the rest of the other SL bureaucrats would ignore for all those centuries, until the financial meltdown RFC has prophesied finally happens rather soon.

Will that be in the next book?

L

Jonathan_S wrote:

Brigade XO wrote:So many threads.

If two withdrawals are made from an account without enough to cover both, the one that gets there 1st is the one that gets paid. There are exceptions. One occurs when a bank takes the specifice step -when multiple checks/withdrawals hit the same day but there is not enough to pay all of them, they pay the greatest number if individual items and return (and charge for the overdraft that would have been caused) the rest. This presumes that they do the more or less standard batch clearing of physical items at end-of-day.

With the advent of real time electronic interchange, it is POSSIBLE for a bank on one side of the planet to get paid against a check it processes AT THE TELLER with the proper electronic equipment (reads the MICR encoding and the amount the teller puts in). The funds are at the same time "withdrawn" from the person's account with the bank the check is drawn on.

If you end up with real-time banking across inter-planitary distances (even with FTL) then the transaction that gets there first and "hits the account" is the one that is paid. Sorting out who was doing what -when then becomes a subject for discussion between the two people trying to chash the checks (well, the one who doesn't get their check cashes/withdrawal made) with the other party.

Sure, but even FTL comms aren't real-time between the Junction and Manticore, and that's in the same system. (Admittedly they're only about 7 minutes comm lag; plus maybe a bit more for relaying overhead)

Even with FTL comm, if two people happen to cash checks 7 light hours away within 7 minutes of each other, the 2nd branch doesn't / can't yet that money has been withdrawn at the 1st branch.


It's not insurmountable, and RFC was nice enough to list out for us a number of those alternatives to addressing this; in those rare cases it comes up.

But I found it an interesting digression into some of the unusual (and uncommon) issues that a system wide banking network might need to think about (even if it works pretty seamlessly to their customers). It's often these weird corner cases, that almost never come up, that are fun to think about.

Flakey wrote:Had to sign up about this. People are taking about cheques, and clearing houses, but why would they have them?

I live in the UK, and I have not had a check book in 15 years, no one I know has a check book, unless they happen to be self employed, and even then not all of them do. It is over 10 years since I had to deposit a check. About the only stores that now like to handle cheques are mostly those that cater to trades.

In the future modern day 'cash' would not be able to exist. Modern day notes and coins (or even futuristic notes and coins) would be very easy to copy using a house-hold or office 3d printer.

Therefore money would only be able to exist electronically, unless you are talking about specie (precious metals/elements). The only 'money' is money inside a bank account.

Now on current day planet earth electronic communications have lag times measured in microseconds. Financial entities can conduct transactions in the blink of an electronic eye. These transactions can be confirmed by both parties immediately after they are processed.

Now even in the future, businesses and individuals will have a stubborn insistence on being paid in 'real money'.

Since the 'real money' is stored electronically in a bank, in order for the money to be transferred from the payer to the payee, the payer has to communicate with the bank to let them know to transfer the money to the payee's account. At inter-planetary distances or interstellar distances this may take minutes, hours or even months.

The payee also has an interest in confirming that they have been paid (see above). Therefore before letting the customer walk out the door (and possibly out of the star system) with their new iPhone MCCXXXIV they will want to communicate with the bank as well to ensure the payment has actually been credited to their account.

Someone who flies into a star system waving a datachip around saying 'I've got a trillion hyperbucks in my pocket' is not going to get very far - no one would be willing to sell him or her as much as a cup of coffee unless those hyperbucks were transferrable/convertible to their bank account. Now we are back to square one with the payer needing to communicate with a bank and the payee needing to check that the transfer has been made.


>>>> A quick digression about the trillion hyperbucks on the datachip:
Now those with devious minds might be thinking: with a little help from my friends copy and paste, I could easily turn that trillion hyperbucks into TWO trillion hyperbucks! In fact, if I was willing to put a little wear on my Ctrl-C and V keys I could have as many hyperbucks as I could spend!
Obviously the Government, Banks, Business community and Consumers would not be in favour of this practice. The currency would quickly become devalued into uselessness and people would be reduced to bartering for goods using gold coins and sexual favours.
Therefore in order to maintain the value of the currency banks could only accept 'real' money and must only allow people to spend it once.
>>>>End digression.


So what is happening at the bank(s) during this transaction?

1. The payer's bank needs to confirm the authenticity of the trillion hyperbucks on the datachip.

2. The payer's bank needs to confirm that the trillion hyperbucks has not already been spent before.

3. The payer's bank needs to deduct the value of the cup of coffee from the payer's account (what!? 5 hyperbucks for a cup of coffee? What a rip-off!)

4. The payer's bank needs to transfer funds to the payee's bank (assuming they use different banks).


Step 1 is done using encryption. Encrypted messages can only be decrypted using the matching key. Who decides the what the key is? The central clearinghouse.

Step 2 can be managed two ways:
One way is to communicate with every other branch of the payer's bank to ensure the money has not been spent before. This may mean the payer needs to wait for minutes, hours or months for their cup of coffee.
The other way is for the funds to be 'locked' into a 'cheque' that can only be cashed at one particular branch. This means the branch only needs to check its own records to see if the money has been 'spent' before.

Step 3 has some interesting ramifications. Whilst the bank could re-write the datachip with 999billion, 999million, 999thousand and 9hundred and ninety five hyperbucks after making the transaction, this is inefficient. Then the next time the payer wishes to make a transaction, the bank has to go through step 1 and 2 AGAIN. It makes more sense that when the payer arrives in system, they deposit the entire cheque into the bank and then withdraws the balance (into another 'cheque') when they leave. Remember that whatever remains on the datachip cannot be spent in another star system (or 'branch') anyway.

Step 4 is relatively simple, but relies on trust and reliability of both banks, which needs to be closely regulated by a trusted authority.


Why involve a central clearinghouse rather than use a 'peer-to-peer' (branch-to-branch) system? I have a feeling that when dealing with an entity like a trading cartel which may be borrowing money from many branches simultaneously there needs to be some sort of control to ensure that the account does not go 'bad'. Also inter-bank settlements etc. would be an issue.

Finally the clearinghouse is where the regulatory supervision regarding the management of the money supply would take place. Since the value of a Fiat Currency depends on the circulation and money supply, for other parties to accept the currency as payment, they would need to have some degree of assurance that the currency would still retain equivalent value in the future.

What hasn't been mentioned is that for the vast majority of people who would only ever go off-planet for a holiday, their banking experience would be very similar to our present day banking experience. Spending, depositing and withdrawing funds would occur 'instantaneously' and quite smoothly.