Other Topics

This chapter introduces several loosely related or even unrelated topics, each of which requires only a few pages worth of description, but each playing an important part in the overall financial infrastructure.

The section, Digital Home, introduces Utopian counterparts to current ideas like email, instant messaging, phone calls, video chats, voting systems, digital storage, personal web pages, domain names, etc. Collectively these are called the Digital Home. Unlike current societies, Utopian societies actually give each one of their citizens a "Digital Home". It is the least that a society can give to its citizens.

The section, Marketplace for Citizens, is yet another service that Utopian societies provide to every one of their citizens. A Citizen's Marketplace is where citizens can officially sell the things that they own and the ownership transfer of such things is accounted for by the Utopian Financial Infrastructure. We will also discuss what should be done with the things that we own and eventually become so useless and worthless that nobody would want to buy them even in a Citizen's Marketplace.

The section, Employment Services, outlines the actual employment related services. The key service is what we currently know as "paycheck processing". This key service is fundamentally required. Further, providing this service helps in measuring employment and hence helps in accounting of employment and unemployment level in the society.

The section, National Vault, outlines the purpose and nature of the National Vault. In short the purpose is to store small sized precious things owned by the entire society.

The section, Community Vaults, briefly discusses the small secure storage that each citizen gets to securely store what citizens consider as precious. A society cannot offer all its citizens a home, but a society can definitely offer a small secure storage to all its citizens.

The section, Financial Will and Inheritance, merely introduces the service that society provides every citizen that assures the citizen that the citizen's "last will and wishes" will be implemented.

Digital Home

The starting point of the idea of our Digital Home is as follows: Financial infrastructure provides many features to its citizens. Most of these features are related to the things that they own and the records of these things are digital. One can think of all these records as being present in our Digital Home. When we are exploring these records, we are looking at parts of our Digital Home. Digital Home can be thought of as the place where we keep our digital possessions.

We can view the contents of our Digital Home and interact with them using a collection of applications and features provided by the financial infrastructure. All these applications and features are presented to entities as some interfaces on their phones and computers.

Digital Home contains an interface to view the inventory of all items that one owns or possesses. Initially it would just be a list that you can view in many ways. As the presentation technology progresses, you could even see your possessions placed in a virtual space that looks like your physical home.

The next major aspect of our Digital Home is digital communication. Our Digital Home is our official and authenticated channel for our digital communication with other entities. It is based on the ideas of identification, authentication and authorizations that we discussed earlier. We need to shift our thinking from making laws like "you cannot digitally impersonate someone else" to "making available a digital communication channel in which it is impossible to impersonate". Let us explore the implications of this line of thinking.

Digital Home contains an interface to view all other entities that one has come in contact with. This is our Book of Contacts. We can categorize and organize these contacts. If we have not placed some entity in a specific category, they are implicitly in the "unclassified" category.

Digital Home contains an interface to send emails to our contacts. We will use the term email because the current term comes close to describing this kind of messaging facility. Eventually we will discard the current form of email and there will be only this kind of email.

Here are some of the features of this messaging facility that distinguishes it from the current form of email:

These emails can only be sent by legal entities to legal entities.
These emails are from one sender to one receiver and the contents of the message are encrypted in such a way that senders cannot deny having sent it and only the intended receivers can read it.
Sending the same email to multiple recipients is just an interface convenience. Holding an email conversation with multiple participants is also an interface convenience. The actual messages are still one-to-one, undeniable and encrypted.

The current email system suffers from the problems of unsolicited emails and junk emails. These problems will be minimized, ideally eliminated, because the identity of the sender is known. Thus when a sender sends an unsolicited email, the recipient can complain about it, and because the identity of the sender is known, the complaint can be investigated and corrective action can be taken.

With this feature, organizations can contact their customers or other entities that they wish to communicate with. The entities that receive such communications can know the true identity of the sender. An abuse of this communication facility can be flagged by the receiver; when a sufficient number of receivers flag such abuses, there will be adverse consequences for the senders.

With this feature, organizations can contact their owners. As discussed in the chapter on Investments, the organization does not directly keep a record of its owners. This feature provides organizations and their management to communicate information with their owners; these are information like upcoming fundraising events, planned dividend distributions, financial accounting results, etc.

Digital Home contains an interface to send short text messages to our contacts. These short text messages are delivered using the same mechanism of the email described above, but presented in the interface intended for short text messages.

Digital Home contains an interface to pick one or more contacts from our Book of Contacts and initiate a real-time voice or video call with those contacts. There is no need to know or remember the contact's phone number. The call to the contact is routed by the financial infrastructure to the contact's physical phone. We can name such real-time audio-video communication as either a call or a chat or a conversation or a meeting or any other suitable name; the name doesn't matter.

Initially the invitation to chat is received on the phone and the actual chat can be conducted using any device that is capable of that kind of chat and that one wishes to redirect to. It could be the phone itself or it could be a laptop or desktop. The caller simply calls your ID.

Unlike the emails, real-time audio-video communications are not stored for later consumption.

Digital Home also includes the features and facilities for entities to express their decisions and opinions about the things that they own. This can be called the Voting System.

Following are the important uses of this Voting System:

It is used by citizens regarding various decisions about the society.
It is used by organizations and owners of organizations for organization's high-level decisions.
It is used by various loose associations of entities to express their opinions in response to survey kind of activities.

We will discuss the Voting System further in a future version of this book.

The digital age that we currently live in is pretty young; it is just a few decades old. So, we have not yet switched our thinking to fully embrace it in our societies.

We currently think that society and its government is responsible for doing the physical things that are for the common good. These are things like building roads, bridges, schools, hospitals, telescopes, space stations, etc. We also hold our society responsible for taking care of physical things and protecting them. Thus we have defense forces, police force, fire fighters, departments that deal with natural phenomena like weather, wildfires, tornadoes, hurricanes, tsunamis, departments that establish and maintain national parks and wild-life reserves, etc. All these are concerns for physical things and we collectively spend a lot of money doing these activities.

How much do we spend, as a society and through taxes, on digital infrastructure that provides something to a citizen? We are not discussing the digital record-keeping activities of our government. Those activities are important but they are not a direct service offered to citizens. In the physical world, we create and maintain roads, schools, etc. and these offer direct services to citizens.

A few paragraphs above we mentioned viewing the inventory of our possessions and that is still record-keeping. We discussed authenticated and irrefutable communication between entities; that is the first instance of a service, but it is also intended to eliminate impersonation and associated frauds. We discussed the Voting System, and that is merely discarding our paper-based voting system and taking the decision making infrastructure into the digital age.

We still have not discussed a single pure digital service that society offers its citizens. It is time to remedy this situation.

Digital Home contains an interface to allow us to permanently store our personal digital content like documents, photos, audio recordings, video recordings. Thus we can copy some files from our device to our permanent storage. It also contains an interface to copy some of our stored digital content to a device of our choice.

Storage is relatively cheap. Considering the fact that private enterprises can provide it for free, society should do it. When society actually does it, society would have given its citizens a true "Digital Home".

When a society starts providing its citizens with such a storage, then the society can be considered to have truly entered the digital age. Why? because it is a digital service that society thinks is important enough that it should be available to all its citizens.

How much storage should we make available to every citizen? The answer is: sufficient enough for the average citizen's digital storage needs. Of course, this is not limited to only citizens, it is intended for all entities.

Further, each entity has a domain name as part of their Digital Home. The ID of each entity behaves like a domain name.

Entities, if they wish, can choose to use a specific area of their permanent storage as the static content of this domain. Thus, as part of their Digital Home, every entity can have its own static website.

The amount of content that can be shared on such a static website will be limited to some reasonably small limits. Why? Because we do not want financial infrastructure to take over the role of being a high-throughput, high-bandwidth media sharing location.

Most organizations and some individuals will want something more customizable than just a static website. They may desire that their domain name should be capable of running their internet-based applications that are directly under their control and hence at their cost. This is easily possible by letting such entities specify the computers that host the domain name.

Marketplace for Citizens

In previous discussions, we had noted that financial infrastructure will host the stock market, bond market, markets for other financial instruments, and even a housing market. Each one of these markets is, conceptually, a marketplace where buyers and sellers trade with each other.

When individuals own some things (which they buy as new products), eventually the individual may have no use left for the product. But many products may still have a useful life left. Any good society will discourage waste and advocate maximal use of useful items.

A Utopian society will enable the maximal use of useful items by establishing a marketplace for its citizens. A Citizen's Marketplace is the marketplace for used items that the current owner wishes to sell and potential buyers are searching for buying that kind of thing at a reasonably low price.

The items that one owns are visible in the inventory of our possessions, and they are linked to their product descriptions. When individuals have no use of the item left for them, they can list that item for sale as a used item on the Citizen's Marketplace at a price that items as per their wishes. The product descriptions of these items are already available in the Product Registry and they are used in the listing. Thus potential buyers can see the products with their original product listing. The sellers can provide pictures of the current state of the items as well.

Individuals may be looking to buy used items to satisfy their needs as long as they can obtain usable items at a reasonably low price. Citizen's Marketplace is the perfect place to look for as these items are available with their original product descriptions. That makes these items searchable and the Citizen's Marketplace provides this kind of search facility.

Thus the potential sellers and buyers of used items can become aware of each other and see if they can find a good deal. Potential buyers can make offers at a price that is different from the seller's preferred price. Many times, such offers and counter-offers eventually let the buyers and sellers find an acceptable price and the used item can continue to be useful to someone else.

If the sellers and buyers can meet in-person and change the possession of the item, then they coordinate the meeting place and conduct the transaction at that time that they meet. This accounts for the possession and ownership of such items.

If the seller and buyer cannot meet in-person, then they can use the services of couriers who are well versed with not only the shipping logistics but also the possession transfer protocol. These couriers need to be certified and authorized by the financial infrastructure in correctly implementing possession transfer protocol. Thus the transaction and transfer of ownership can occur similar to our online purchases and the possession is transferred with the tracking provided by the possession transfer protocol.

The seller must drop off the item at the local store of the courier, the courier packs the item in reusable packaging, ships it to the local store near the buyer from where the buyer can pick it up. Citizen's Marketplace provides facilities for the authorized courier to interface during the sale process to compute the shipping cost based on the product description and whether the buyer desires in-store pickup or at-door delivery. The shipping cost is included in the total transaction cost and that total transaction cost is paid by the buyer. The seller does not need to know the buyer's address as that information is relayed only to the authorized courier.

For a potential buyer-seller pair in Citizen's Marketplace, depending on if they are located far away from each other, it is possible that the sale cannot occur due to the high cost of shipping. That is OK. But whenever such a sale can occur, it is a win for all parties.

New products are sold either directly by manufacturers or by whole-sellers or by retailers to the final owners of these products. The markets and marketplaces for such new items are also established and managed by private sector businesses. Each such sale involves ownership transfer and transfer of possession of the item. Of these ownership gets transferred during the transaction and transfer of possession of the item can happen later due to shipping and delivery lags. To ensure accurate tracking and accounting of the possession, financial infrastructure established the Possession Transfer Protocol and mandates that it be followed by the seller when the possession is not transferred at the time of transaction. This protocol tracks the possession of an item from the time it is sold till it gets in the possession of its owner via various couriers.

You could even "list" some of the items you own as "items to be sold" to someone who is willing to buy them. This "listing" is done on the Citizen's Marketplace. Since there is a detailed product description known for everything that you own, presenting the original product description to would-be buyers is possible. In addition you could show the current state of the item using pictures or video.

When buying from the Citizen's Marketplace buyers and sellers know each other's identity. Before buying, one has to negotiate the physical handoff of the stuff being bought or sold. When this kind of sale occurs, the item's ownership is transferred to the buyer and the buyer pays some money to the seller; thus it is a financial transaction. It is also followed by the protocol to affirm that the item's possession is given to the buyer.

If it is personally handed off, the buyer and seller meet, identify themselves, authenticate themselves to each other, do the hand-off and acknowledge it and that completes the protocol.

If it is shipped, the protocol keeps track of the item's possession through the item's journey from buyer to the seller via the courier services.

If after listing something that one owns, one still cannot find a buyer for it, then it can be donated to some local charity, recycled or thrown in the garbage. Each one of these options has pros and cons and one should choose the better of these options. Regardless of which option one chooses, once one disposes the said item in one of these ways, one would also like to remove it from the list of things one owns.

First, one marks all such items with their current status as "donated", "recycled", "garbaged". This removes the item from the normal inventory of items (which we tend to view) and places it in a separate inventory list for "disposed off" items. These items still show up in your net worth.

For any item, if its current depreciated value is less than 1 percent of its original purchase price, citizens can remove it from their list of inventory to reduce clutter, get rid of these almost worthless items from the list of owned items and to reduce one's net worth to that extent. When citizens choose to do this, they definitely cannot list the item on Citizen's Marketplace even if they still possess these items.

Alternatively, citizens can set up the configuration of their account to automatically move such items to a separate inventory of items of "insignificant worth". This helps reduce the clutter in one's inventory of items. These items are not permanently removed and hence they can be listed on the Citizen's Marketplace and it is possible to recover some value out of such items by selling them.

Every calendar year, in addition to removing items as mentioned above, citizens can remove additional items worth 1 percent of their total wealth even when such items have a residual value of more than 1 percent of their original purchase price.

Note that the way depreciation is calculated, items depreciate a fixed amount each day over their entire depreciation period. Since most items don't have an official long useful lifespan, they will depreciate to zero value in much less than 10 years. Consumables will definitely depreciate to zero worth within a year. So, actively monitoring one's inventory is not necessary.

Employment Services

The most obvious way of earning money is by employment. This is earning money using the time, knowledge and skills that one possesses. While everyone has exactly the same amount of time in any given day, the knowledge and skills are acquired over a considerable amount of time and education and internships play a significant role in helping individuals gain the knowledge and skills that would enable them to earn money.

We discussed several things about employment in Building Utopia. Other things about employment already exist in sufficiently advanced societies. We will just have to bring together all these elements under the purview of financial infrastructure.

The main reason is as follows: Employment is an exchange of a service for money. This service has a unique product model in the product registry. When an employer pays an employee some money as the salary, that money is not a one-way transfer of money. It is as if the employee is selling the service in exchange for money. This aspect needs to be properly recorded. For this the financial infrastructure needs to be involved; more colloquially financial infrastructure needs to be "in the loop".

For most people, employment and earning employment wages is the main way of obtaining a significant portion of money that is necessary to meet their needs and wants. As such employment is a significant financial activity in any society and society's financial infrastructure needs to have mechanisms to support and measure the payments associated with employment.

When an employer hires an employee, that act needs to be registered and this registering is a non-monetary transaction between the employer and the employee. This non-monetary transaction implicitly authorizes wage payment by the employer to the employee, so that the employee does not have to "accept" this kind of transaction every time it occurs. Similarly termination of employment, either by the employee or by the employer, is a transaction that has some monetary implications (like settling the remaining wages) and non-monetary implications (like knowing who is no longer employed with an employer).

Every payment of wages, the "paycheck", by the employer to the employee is a financial transaction; because it is a transfer of money from one entity to another. Conceptually, the money gets withdrawn from the money account of the employer and gets deposited in the money account of the employee. Thus, the financial infrastructure has to be involved in it.

Having the financial infrastructure "in the loop" regarding employment situations enables the financial infrastructure and hence the society to have accurate information about the current employment situation. We desire hard facts; not just information gathered through a sampling or a survey.

There are two important aspects of this situation: the employment rate and employment income statistics. Both these are always published at the aggregate level and in a few well chosen demographic slices. Even though income has no tax consequences, it has ramifications for the well-being of all citizens. It needs to be measured correctly and that information needs to be made available to all citizens. This statistical information forms one of the basis for citizens to take and alter their policy decisions.

National Vault

Financial Infrastructure builds and maintains two kinds of vaults. The first kind is the National Vault. The purpose of the National Vault is to safely and securely store precious metals (like gold, silver, etc.) and other national treasures and valuables.

Any society collects many artifacts that are considered as national treasures. These artifacts could be anything and could be of any value. These artifacts are typically worthy of display, not just secure storage. Hence the financial infrastructure puts some of the artifacts, or their copies, on display in various offices. Those artifacts which are not on display are stored in the national vault.

A nation should possess some amount of precious metals as the collective wealth of the nation. This collective wealth can be used in rare and exceptional situations. One of the exceptional situations is when there is an imbalance between imports and exports. These precious metals are stored in the National Vault.

As mentioned when discussing Standard Investments in the chapter on Investments, the financial infrastructure manages precious metal ETFs. There is one ETF for each of the precious metals and perhaps there is a composite ETF that includes all precious metals in some proportion by weight. The physical metals associated with these ETFs need secure storage and they are stored in the national vault.

Miners of precious metals can exchange the purified precious metals that they mine for shares of the corresponding precious metal ETFs. These are freshly created shares of the ETF in proportion to the new precious metal deposited at the national vault. The miners can then sell these ETF shares in the financial market.

Wholesale buyers of precious metals can buy ETF shares of the precious metals that they wish to take possession of and swap the shares for physical metal.

Foreign trade is denominated in gold. Hence payments for imports are made using gold and payments for exports are received in gold.

For imports, when a payment is needed to be made, the buyer of the imports buys units of gold ETFs locally and presents these as the payment to the import-export payment system. This gold is removed from the account book of the ETF and accumulated in a separate account for Import Exports.

For exports, the payment for the exports is received in gold. Conceptually, this payment in gold first arrives from outside the country into the Import Export accounts. From there it is given to the ETF managers to be included in the ETF gold. The financial infrastructure as a manager of gold ETF then creates corresponding units of the ETF and hands these units over to the exporter as the received payment. The exporter can sell these ETF shares in the financial market and obtain the local currency corresponding to the amount of gold received.

The financial infrastructures of various countries cooperate and maintain a record of the net amount of gold that needs to be transferred from one country to another and periodically settles these accounts by making the transfers. This system of balancing worldwide payment books is done efficiently and as long as the entire world maintains balanced trade, most countries should not be required to physically transfer gold.

However, when a country is experiencing an imbalance in its imports and exports, there will either be physical gold flowing out of the country or physical gold flowing into the country. This aspect is handled by the national vault in collaboration with the management of the gold ETF and the collective wealth of the nation in the form of precious metals. The collective wealth acts like a buffer for physical gold payments due but not yet received. The collective wealth also accumulates the gold collected as import taxes when there are some import taxes.

Community Vaults

Financial Infrastructure builds and maintains two kinds of vaults. The second kind is Community Vault. The purpose of Community Vaults is to enable all citizens to safely and securely store their precious belongings.

Currently we have a system where we have safety deposit boxes in many of the local bank branches for paying customers. These safety deposit boxes are located in a large room that is security enhanced in some ways and hence called a "vault". This is the idea behind Community Vaults.

The purpose of Community Vaults is to enable all citizens to safely and securely store at least some of their precious belongings. These community vaults are located in the branch offices of the financial infrastructure and they are similar to the safety deposit boxes that we know of in present times. Each individual has access to a single safety deposit box in a nearby community vault; at no charge, of course. How large such a safety deposit box would be depends on how prosperous the society is and that is decided by citizens.

Community Vaults would satisfy the need of storing something small in a secure facility for all citizens. They obviously will not satisfy all the needs of the super rich mostly because they will have a lot more to store in a secure location and their needs of security would be much higher than the rest of the citizens.

Community vaults can also have additional safety deposit boxes of varying sizes that are rented out to citizens at some reasonable and standardized rate.

Financial Will and Inheritance

In a previous chapter we discussed that citizens can digitally identify themselves, authenticate themselves and authorize their actions to the financial infrastructure. The financial infrastructure also keeps a record of everything owned by its citizens. With those capabilities, we can discard all current means of specifying our "last will and wishes" and design a system in which such desires can be expressed in a standard digital form and later when "it is time", those desires are implemented as per the specifications in that standard digital form.

A Financial Will is the official and legally binding expression of a citizen's desires about what to do with the citizen's wealth after the citizen is no longer living. Financial Will is distinguished from Last Wishes in the sense that Last Wishes deals with non-financial and non-property matters and is not legally binding.

Since Financial Will deals with money and wealth, financial infrastructure will provide the means to specify the Financial Will and these means will be the only way to specify such wishes and financial infrastructure alone will be responsible for implementing the Financial Will. The implementation work will mostly involve transferring the things owned from the citizen to the citizen's Financial Heirs. The department of financial infrastructure that deals with this responsibility can be called the Financial Will and Inheritance Service or just Inheritance Service.

Respecting and implementing the Financial Will is a service that society offers to all its citizens. This service ensures that the citizen's Financial Will is carried out as per the citizen's specifications. The sole purpose of Inheritance Service is to implement a respectful, orderly, swift and correct transfer of the wealth of the deceased citizen to their designated Financial Heirs. Once that goal is accomplished, the job of Inheritance Service is complete. The work done in implementing a citizen's Financial Will will be completely at no charge, regardless of the citizen's wealth.

How do citizens specify their financial will? What is the role of the financial infrastructure in implementing the financial will?

The idea "last will and wishes" is a human construct. It is a result of the complex relationships that we have with other humans. Many thoughts influence what we would like to do with the things that we own after we are gone. Here are some examples of such thoughts: Parent-child love and care, sibling rivalry and relationship, love and affection for other individuals, life partners, our personal (not legal) duties and responsibilities towards others, and even thoughts like sacrificing our own benefit for the benefit of our loved ones.

We haven't discussed any of these human relationships yet. Thus, these and related questions will be discussed in a future version of this book.