how do banks store digital money ?
Let’s suppose a central bank gives 10 million dollars to a local bank.
How is this money saved?
It just a excel spreadsheet with the amount of the money writted in?
What prevents the local bank to just edit the “spreadsheet” ?
Is there any sort of protocol or agreement between the central bank and local bank,
Like a blockchain or something?
In: Economics
Well, it’s kinda a spreadsheet, just a bit more dedicated.
The “we have X money” isn’t the thing that is stored. The Data is “We have X money, of wich we got Y from bank Z on April 10, and …”
The source of the money is stored, and can be backtracked to an outgoing transaction in the other bank. So to cheat in extra money you would need to have a source from where it came, and it’s easy to figure out that this transaction never happened if you have access to the records of the other bank.
For this reason banks to regular internal audits to verify if all the money in accounts is actually legitimate.
Funfact: my judge relative had a case where a bank employee created a bunch of fake transactions transferring cent amounts from thousands of accounts that had been inactive for years. He was caught because that weird pattern of tiny transactions was found in such an audit
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