Form First Function Follows. Vice versa for the Banking System

The golden rule of nature: Form first, function follows.

The bankster's rule of gold:  Function first, form follows.

The banking system is built on a fallacious conceptual design rule.  It has been very successful....until now.  Function is a shifting sand to build upon.  Objects called Rocks are better.

A system structured fundamentally on function orientation instead of persistent object properties is bound to fail over time.  Philosophically  true, I think.  When the function of time runs out, the last and greatest function based entity verb that rules the system called the passage of time, then all object things are over.  Until then mankind structures its best and lasting systems on the premise of the persistence of objects over time.  Objects oriented management of things dominate the creation of our best conceptual structured system designs.  What they do as functional processes follow.  Attempts to dominate and dictate conceptual structured system design based on functional process control fundamentals first to create things as function of process are a shaky way to build a system.

The way I look at money there are only two things to examine.

1.  What money is.  Money as a noun entity as the singular granular instance of its class and plural aggregates categories of money up to the total class of all money.  Specific definitions of what money is apply.

2.  What money does.  Money as a verb action.  Transaction is an equal but better word.  Transaction as a medium of exchange between two entities in a trade of money for something.

Our monetary system relates what money is and what money does to apply it to satisfy our needs.  Our needs are many but the monetary system is essentially our decision making tool with which to make choices about which needs we want to satisfy and our resources to satisfy them.  It is a social decision making tool we agree to use at the individual level as well as aggregated individual levels all the way up to the total aggregate level of all of us as a nation. 

A good system example working model of the relationship between what money is and what money does is an Operating System and  Application Programs that use it to do something. Works for me.  An Operating System is a combination of Hardware and Software working together to provide the framework for Application Programs which are exclusively Software to do something.  The Operating System has its own Software that at the machine level bridges the relationship between physical hardware and directly related and mirror image linked logical conceptual representations of physical attributes and relationships.

Operating Systems and Application programs are New Age technology.  Digital Age.  The legacy Operating system and Application Programs used, and still use its own language.  Our Natural Language with it own operating system and application programs which has acquired a new way of expression to serve our needs.  Much better, most would say.  Others might see it as a faster way to make mistakes.  The beauty of a tool is in the eyes and in the hand of the (be)-holder.

Everything old is new again!  People used to talk to their "Tin Lizzie" machine.  Now our machines  can talk not only to us but with us.  Hey, Siri!

Why the elaborate preface to what I want to say?  That is what I do when I want to collect my thoughts.  Start from the beginning in order to extend them.  The big wind up before the pitch to make sure it is frames well to get it to where I want to go.

The Information Age extends our historical natural language evolution that maybe started with one grunt for yes and two grunts for no.  The Information Age is not so much a revolution but a faster evolution of our natural language, in its broadest terms,  by means of using machines and a more precise language (math) based systems to extend what natural language does for us.

The way I see it, technology has enhanced our legacy language system and extended its utility.

Money is an age old legacy system with its own evolution over time.   It is a well entrenched legacy system that has adopted Information Age technology to extend itself.    

The way I see it technology applied to our legacy monetary system has exposed the need to change the basic operating system.  Failure to change the basic operating system will allow the legacy system to make mistakes faster and fail because its foundation has always been intrinsically faulty.

The legacy monetary system is structured on the creation of money through debt processes.  Debt is a social functional originated concept.  The function of debt creation assumed by a bank established an Application Function as the foundation of the legacy Monetary Operating System.

Selection of what thing is to be held constant in a system and what thing is to be variable determines the nature and operation of the system.  Nouns denote things, verbs denote actions but verbs are a conceptual thing as well at a higher level of abstraction where the rule says:  All things are things.

The Information Age is structured on the creation of an Operating System to provide the foundation on which Application Programs are created.

Grunting in a cave did not create the vocal system.

The legacy monetary system was and remains structured on a functional process of debt creation.  The thing that money does not what money is.  That was a better way for bankers to create the banking money system because structuring it on what money does in action rather than what it is as a thing does exactly this:  Detaches what money is a thing from what money does as a functional action and makes it a variable fractional child of function managed by bankers. 

Using natural language in all its continuing legacy beauty this is what the bankers did:  Put the functional wheel process of rolling before the horse that made it roll.  Put functional process first enabling substance on which that process was built to be manipulated....Leveraged.

Leverage.

Leverage is an illusive concept.  It has meaning as both a noun and a verb.  Furthermore, in the frame of the physical world its power is a mathematical computation with limiting parameters expressed by a formula.  In the frame of the conceptual word of money its power is a computational formula but not constrained by physical reality.  In that conceptual world nothing can be leveraged to something.  The focus is not the two nouns in the relationship but the use of leverage in its verb function form.

It is the old trick of getting the mark to focus on the action of the shell game having three shells, not the the three objects involved to select the object that has the pea beneath it.  A skilled flim flam artist wins every time if they put the mark in the frame of focus on the action.  Theirs is an function based system of operation.

As usual in my way of expressing things I get to the conclusion at the end that should have been stated at the beginning or probably used as the title descriptor of what this blog entry is all about.

I will do both.

The time has come to restructure the monetary system on an object oriented base where the object foundation of the system comes first and the function of the system follows.

Object form first, function follows to implement the power of subject form to object result.

A bigger thought:  Are we what we do in action or who we are in substance?   Action may be said to speak louder that words.  Speaking louder is only a measurement degree of action.  Does it necessarily translate to having a greater conceptual meaning that dictates who we are?

Some systems must be built on form first.

Some must be built on function first.

Which approach for which system is an appropriate  place to start?

It all depends.

I think that the legacy banking system started out on the wrong foot.  The function foot but the right foot for the banking system.  The other foot, the object based foot, is the better lead to get a better footing on stable ground.

There is something about Blockchain and money and finance that intrigues me but eludes my grasp.  At the core is a better hold on what money is and what money does.  Form and function.

Maybe it is this:

Blockchain currency gives object form structure to money first.   That is the foundation of the system.  Then the function of transaction follows.  The first transaction is the birth of a persistent object existence that preceded birth.  The transaction itself was the incarnation of the object.  The object defining what money is becomes the transaction.  When money is spent it is literally the re-spending of a transaction received that became locked into the historical block chain.

A transaction in the legacy debt based system is the verb that joins buyer and seller in the transfer of money as a medium of exchange.

In the blockchain monetary system the transaction of spending crypto currency into the system the first time monetizes the the unit of currency into a transaction object money container block upon which the system having a variable amount in each fixed transaction container is built.  It is like a variable denomination on a dollar bill.  Impossible on a physical bill but possible on a variable conceptual "bill".

Intuitively, and that feeling is rapidly emerging into fact, I see blockchain currency as fundamentally an object based monetary system in comparison to the legacy banking system that is a functionally based system design.

This is big change.  The banking system obviously would not want this applied to the foundation of currency but must recognize the accounting advantages for what money does.  Seeing that and adopting blockchain for accounting as the banking system is well on its way to doing has a foreseeable result of paving the way inevitably for a blockchain currency system.

What are banks doing when they intend to use blockchain as an accounting control.  It looks to me exactly what is being done in applying blockchain to currency.  Objectification of a functional process transaction into an object container to be managed on its foundational entity object attributes, known methods and message emitting and processing.

This turns function based legacy system money and finance conceptual design into an object based Information Age system design.

The old function based legacy banking monetary and finance system design is headed down a slippery slope that my dad would call going to hell in a hand basket.  As it goes to the hell it deserves I think that those that recognize the direction will grab onto an object rather than hold on to a function creating leverage.

Is it possible for banksters to grab onto an object oriented system but still have the advantages related to the legacy function based system designed for leverage?

Don't know about that except that they are very clever.

There are big bucks involved here.  That is something to be clever about.

There is also a new kid on the block that was the domain of banks.  The kid who helped banks with all of its Information Age gadgets, bells and whistles.  The quants on the inside.

The new kid on the block is the Technology Sector that once was employed by the banking system.  The Technology Sector that is thinking "We could own a share of the banking business instead of working for it".    They have hobbled themselves to long with their functional based system into which they wanted us to pound in a round peg to a square hole.  Parts of the legacy banking system are ripe low hanging fruit for the picking.

If blockchain is a fraud killer then wither go the banks? 

In the process of writing this blog entry the idea that blockchain turns a transaction function into a money container object emerged as a new thought. The more I think about it the more I feel this may be the simple elegance of turning the function oriented nature of money, what money does, into the object oriented nature of what money is.

Stated more simply:  "Blockchain monetizes transactions"  It turns the transaction into money.  No counterparty.  No balance sheet.  It turns a function into an object medium of exchange.  Neat idea?

Searching Google on "Blockchain monetizes transactions" returns the result:  "No Result".  If this is such a splendid concept then why has it not been expressed before..ever..as far as Google knows.

Chalk up another bragging right on the score board!

Maybe blockchain is too broad.  Going to the term that gave birth to something bigger than itself: "Bitcoin monetizes transactions"  No results.

Almost like a two-fer!

Getting more basic:  "Blockchain monetizes"  No results!

"Bitcoin monetizes" gets 9 results.

Maybe I need a better understanding of Monetization at Wikipedia.  Not much help except that monetization is a functional process of turning something into money.  That something being an object to begin with.  Turning the first transaction process of a blockchain crypto currency into money to be used as a medium of exchange object in every subsequent transaction is initial direct monetization of a pure action turning it into a conceptual object.   Like...uh...printing money.  There was explanation of that at the link in the   Monetizing Debt subsection.  Debt is an object created as a function of the contractual balance sheet entry process that comes first then continues to validate the existence of money created by monetizing the debt, as long as it exists on the balance sheet.

It would appear that Blockchain money creation that monetizes a transaction directly into money cuts out the intermediate step of creating the object Debt as the function of a process as well as all the downstream balance sheet accounting as long as the debt exists.

That of course is the elegant beauty of the blockchain currency.  In addition to all of its other attractive features.

Is "Blockchain Monetizes Transactions" really an astounding reading of what is written on the wall?  If so why am I the first to put it in writing....as far as Google knows.  What do I know?  Will I soon be hearing voices that are not there?  Perhaps we will have elegant conversations about what we see written on the wall.....or the shadows?

Maybe I need to see the light find the answers to all my questions and suppositions related to my crazy notions about the nature of money and banking.  Maybe reading Eric Tymoigne's 3 part series on Money and Banking at New Economic Perspectives will reveal what a beautifully balanced system the Banking Money and Finance system is and how it functions to perfection in all its complex glory.

If it ain't broke don't fix it!