Wow. This article triggers me so badly.
It is facedesk material.
"I don't even" doesn't even begin to describe it.
PsiTraveller said:
Interstellar banking has not proven feasible without faster-than-light data communications, at least not in the sense that banking was understood on ancient Terra.
As understood on Ancient Terra...in what era? Most of human history on "ancient terra" didn't feature effectively instant communications and it functioned.
The the article states:
PsiTraveller said:
Data encryption is problematic.
But then blithely rambles on with:
PsiTraveller said:
Imperial Standard Credit Card This card is effectively a portable bank teller. A microprocessor unit tracks the account and contains information for personal identification. Made of plas-steel, the card is practically indestructible. It is nearly tamper-proof, in that most attempts to tamper with it merely result in blanking the card.
Merchants in systems with a technology level of 13 and higher accept this card. It may be used in any Imperial starport to get Imperial credits, local currency or debit cards drawn on local banks if local technology supports it. Identification information consists of a thumbprint activator and a record of the owner's retina print. The latter is checked for verification on all transactions over Cr100,000.
Only the very wealthy may obtain the Iridium Edition of the card. It contains the owner's DNA code, allowing for positive identification and unlimited reliability. Starships have been purchased on these cards.
Um...how do you "Imperial Standard Credit Card" when data encryption is so problematic there's no trust?
The Imperial Credit is a fiat currency. Fiat currencies only exist with trust (and fairy dust and dreams). They just went through listing how there's no good trust mechanisms in the Imperium and no discussions on what replaces it, and now there's a credit card? How does anyone know that huge balance on your credit card (more like a debit card) is real when data encrpytion a joke? We can spoof DNA even now - an identical twin has the same DNA, even retina prints and thumbprints are more secure (since identical twins don't share those), but even those can be spoofed. So this Imperial credit card is such a terrible idea for the reasons the article earlier stated. You have to assume two different people wrote the different parts. Since there's no trust, no fiat currency, the Imperium economy loses all of it liquidity which directly contradicts "canon" because one of the greatest strengths of the Imperial economy was its liquidity. The Imperium would likely fall apart and at the very least, Megacorporations wouldn't exist.
The problem with "cash on barrelhead" is problematic as well. For the same reason as data security, it wouldn't be that hard to counterfeit cash - especially by actors outside the Imperium. No-one could know if the cash you're using is real or not. Admittedly, the Zhodani probably wouldn't do it because they're not actually interested in destabilizing the Imperium beyond a certain point, the Solomani wouldn't do it for game theory reasons 'if we do it to them, they'll do it back to us and then we both lose', but the Vargr and Hivers might engage in quite a bit of counterfeiting.
Barter is inelastic and has little liquidity.
However, I do believe that Imperium has a trust system that'd work and is the one I use IMTU. That trust, of course, is the nobility.
Nobility would be involved in any kind of interstellar banking transaction. The greater the amount of money, the higher rank of noble is required. The noble is the guarantor of the transaction - he or she does not actually have to work at the bank but is involved. Letters of credit are accepted or denied by how much the receiver of the letter believes the letter to be genuine; every noble essentially guarantees letters of credit by using his or her good name and reputation. Nobles would essentially have a kind of "Michelin Guide" on nobles throughout the Imperium, stating their liquidity a guide that perhaps updated every five years.
The system has its pitfalls and advantages, but I think it makes things more interesting.
In theory, at planet A, a traveler we'll call Mary plans a trip to planet D. She desires to have a quite a bit of cash at her destination and doesn't want to lug it around with her so she goes to the bank that offers letters of credit. She speaks with the noble there who asks her where she is going and so on. If the noble decides that Mary seems trustworthy enough, she deposits with the noble 100,000 Cr. In return, the noble writes a letter and seals it, saying he guarantees the letter for 100,000Cr for Mary. The noble is within his rights to do a credit check on Mary, seeing what her assets are and her ability to pay beyond this and so on to see if she's trustworthy. The noble may put other stipulations as he wants on his letter; for instance he might say that it's only valid on world D. Or he might (depending on how well he trusts Mary) say it is also valid on worlds B and C, both of which are necessary for her to get to World D using a Jump-1 ship. If the noble particularly trusts Mary, he might simply say she can turn this in anywhere and get 100,000Cr. In this way, a letter of credit is created.
Once Mary reaches planet D and desires to have her funds, she goes to see a banker on Planet D. She presents her letter to the noble. Nobles in the Imperium tend to all go to a few schools (probably on the subsector capital) as well as mix and mingle throughout the year, visiting each other and so on within a subsector and often within the sector - the higher rank the noble the more likely he or she travels widely. This allows valuable personal contact between nobles. So when Mary shows up with the letter, the noble receiving it is likely to know the person who wrote the letter and will accept it, fronting the 100,000Cr to her. At the end of her trip, Mary might have some portion of the monies left over which she doesn't want to take back with her (again, she doesn't want to lug cash around). She'd once again go to the bank, get the credits converted to a letter (same process as before) and take the journey home.
This simple example is likely to cover the vast majority of letters of credit situations that'd arise - most travelers don't go very far.
More difficult examples might arise if Mary (who is from the Spinward Marches) wants to go to the Solomani Rim for whatever reason (or even a shorter distance but still in a trip spanning subsectors). She arrives in the Solomani Rim and presents a letter from Mora. This is a difficult situation. The nobles in question are unlikely to know each other. They probably don't even have recent reports on their liquidity. It's too long to send a ship to get a confirmation (it'd also defeat the purpose of the letter of credit anyway). The noble probably isn't even sure if the noble who wrote the letter even exists. If Mary wanted to be safe, this situation wouldn't arise - every few jumps, Mary should have "traded" her letter of credit to a local bank and gotten a new one, ensuring that the personal relationship chain between nobles existed. This isn't always possible. The question of if the letter is honored or not depends on trust. However because this is the underpinning of the Imperial economy, it's more than likely the letter of credit will be honored - there's nothing more damaging to trust in an economy than denying letters of credit.
Other interesting cases might cover huge letters of credit (featuring hundreds of millions of credits) or old ones - adventurers might find a letter of credit on centuries old derelict spaceship where the crew and passengers are assumed to be long-dead. However, in the process of salvaging the ship they find a letter of credit for 3 million credits issued on Trin and redeemable on Mora (originally). The players might consider flying their ship over to Trin to see if that secured money is still available (it may or may not be, likely dependent on local banking laws - it's likely the next-of-kin could "invalidate" the letter of credit after a point and take the money back) or they might go to Mora and try trading it in (again, in this case the bankers on Mora are within their rights to go check with Trin).
Now, you might be thinking this system is open to fraud, especially since nobles almost always honor letters of credit. The answer is yes. There probably is trillions of credits worth of fraud in the Imperium every year (the exact amount is likely kept secret for various reasons). However, nobles are not entirely without recourse. Private investigators, bounty hunters, even mercenaries can be hired to repossess items purchased fraudulently, catch swindlers, or even assassinate them. In addition, letters of credit are based on fiat currency - unless the losses are huge, they can often be covered and the losses simply considered a business expense by the noble. This isn't as odd as you might think - for instance, unless banks are local within a subsector or two, getting the money for a letter of credit may be an arduous task (like the instance of Mary going from Spinward Marches to the Solomani Rim). Letters of credit are often used as a kind of cash in themselves - banks trade the letters between each other to cover debts, which can cause issues if some bank is hit by perfectly valid letters of credit being redeemed over the course of the last 150 years for some huge amount of money at a point when their own liquidity is low (in which case they get loans from other banks).
