The payment systems we have today are designed as hierarchical trust networks for easy payment routing and rely heavily on active regulation to protect the delicate points of failure inherent in this type of structure. Regulation has been at best only moderately successful -- destabilizing "attacks" on national currencies by speculators are a regular occurrence -- and always controversial, as various interest groups compete to use single points of control as levers for advancing their agendas.

There are alternatives to the present arrangement. The Internet demonstrates the feasibility of routing information in an arbitrary network, by developing a standard protocol. Payments are nothing but information about obligations -- if paths can be found to route information, paths can be found to route payments. The difference is that while information is routed along "best-effort" paths through physical data networks, payments must be routed along reserved paths through abstract trust networks. Billions of trust relationships that exist outside the tightly-regulated global hierarchical currency network could be integrated into that network, removing single points of failure without harming the value of existing obligations. The resulting network would be more stable, and therefore require less regulation and be less expensive to use, while at the same time being more democratic and responsive to local concerns.