Balance Sheet Meets Blockchain Money

 Blockchain at this link:  Crypto currency fit for Wall Street

The banking system is a balance sheet system of debit and credit accounting.

Assets equal Liabilities in the situation where money is loaned into existence by a loan contract to pay it back the total amount loaned at some time in the future.  That is at least the essence of the situation to be confused by a lot of other related factors, twists and turns, smoke and mirrors.

All of what we call money was therefore created by contractual loans and the total of all loans, public and private combined equals the total of all money in existence at any given time.  Loans are made by the Federal Reserve banking system to the private sector and the public sector.  More accurately, the Fed is a middle man agent that processes loans to the government and either holds the loan or sells it to a buyer in the private sector.  Government bonds provide money for government spending.

A block chain of money transactions in all accounts relating to equal but opposite adjustments on both sides of the ledger verifies the truth of the current asset/liability balance as well as the accuracy of all prior money transactions related to that balance up to that time.

A new third way to check the asset/liability monetary balance and verify its accuracy requires a third entity, the money itself, independent of the account that it may be in.  That of course requires the establishment of an object entity with identifying attributes that did not previously exist is the digital domain of accounting for assets and liabilities as a balance of each account and of the aggregate of all accounts at the macro level.

Enter Blockchain Money.  A third entity in the Asset/Liability system.  The total value of all Blockchain money with a unit value of one unique dollar each equals the total of all Monetary Assets which is equal to all Monetary Liabilities which is equal to Monetary Liabilities which is equal to the current amount due under all Contract Loans that created the Asset/Liability equal balance relationship in the first place.  This applies to all money regardless of a sub-classification of money in the Contract Loan domain to public and private loans.  Money created by a loan may enter the system as either the product of a public or private loan but once introduced to the system it all spends the same and any single dollar loses its birth identity in the current system.

The moment of birth of a dollar bill establishes its unique (IPv6 or serial number) identity at the beginning of its life when it is introduced by association to two balance sheet accounts (asset/liability) before it is ever even spent the first time in its asset state of being in a transaction that carries through in blockchain hash methodology for its entire existence as a unique entity object called money in the monetary system. 

The same unit dollar of money that was introduced to the Monetary System by a loan contract, public or private is not the same unit of money that is ultimately paid back to satisfy the terms and conditions of the loan contract.  Any single uniquely identified unit money is legal tender to settle the loan debt, regardless if the loan was originated as a public sector or private sector loan.

If the unit dollar was given a unique identifier from a block range of identifiers reserved to denote either a public sector or private sector loan at its birth and introduction by a private or public contract loan....

and...

If the loan public or private sector is repaid (satisfied) with unrelated unique unit dollars that are identified as either public or private sector loan in origin then their nature of origin is unrelated to the category of debt they are used to satisfy.  Dollars are dollars.

Then....

There is a conundrum.  A complex one if the system conceptual structure says that those dollars go back into a suspended pool of dollars that are eligible for introduction to the system again by the creation of a loan contract.  True for the banking system making private sector loans into the economy.  But for the public sector (government) paying off the loans made to it (National Debt) then what is the situation if citizens paid their taxes in a variable arbitrary combination of public/private origin dollars as a function of the law of averages related to their occurrence?

Gotta think about this.  The conceptual system rule is that money never dies.  Once created it lives forever although it may be in a state of circulation or reserved suspension as a reserve from which to draw for it to re-enter circulation state.