Incentivising The Flow of Cash

Savings is an interesting thing. We are told from a young age to save our pennies so that we have them for a rainy day. The problem with this is that when our pennies are inactive, there is work out there in the world not being done. There is certainly someone with the ability to create some value if they had access to your pennies.

Capital reserve banking is supposed to provide this service and must be recognized as having some success over the last few decades as the amount of value that has been created has skyrocketed. Our issue is that the profits from banking have gone to individuals who own the banks and not to the people that gave the pennies.

Capital reserve banks do accelerate cash flows as they regularly loan out 10 or more pennies for every one they deposit, but can there be another way that eliminates the profiteering? And what to do with the profits?

By requiring a multisignature process for the spending of cash we can implement our money time machine and remove the need for the typical banks. I propose a demurrage on cash so that it decays at rate that encourages the spending and / or investing of cash between market participants.

This system will accelerate the flow of cash far beyond the ability of the fractional reserve banking system. Profits will be delivered to those creating the actual activity by returning decayed money along the blockchain so that those that have spent and / or invested their cash with successful enterprises will receive the largest reward.