ELI5, How is virtual money tracked?

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So I log into my banking app right and it says I have x amount of money. Could someone with the correct access Just add a 0 to that? If not why not? Who/what keeps track of that stuff?

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Banks have been tracking balances with numbers ledger books for centuries. Sure, someone could add a zero. That’s called “cooking the books” or “bank fraud”. People have been prosecuting those types of crimes for centuries as well.

Banks are subject to a large amount of audits to ensure the provenance of the money in their accounts. This also helps to build confidence among potential clients (borrowers and depositors). No one wants their bank to close up shop and disappear.

>Could someone with the correct access Just add a 0 to that?

Yes, but no. How things are monitored varies nation to nation, but banks in developed countries are watched like hawks by regulatory agencies for those sorts of shenanigans.

So someone with the *appropriate access can adjust your account balance. But the first automated audit of the banks accounts that is performed by the system will flag the incorrect balance. What you are describing is basically a digital form of counterfeiting. National governments really, really, really, don’t like it when people counterfeit money.

*Banking systems shouldn’t allow a direct adjustment of account balances like that. For someone to perform that sort of edit to your account balance they would likely have to hack into the financial system and abuse the database in some way.

A key part of “modern” (centuries old but still new in the scheme of things) is “double entry book keeping”.

That basically means that every change in a balance (e.g. you having more money) is accompanied by an equal and opposite change (i.e. another player having less money).

The advantage here is its easy to audit – the bank just checks all the transactions pair off and sum in each account to the same amount. If anyone fakes a transaction it’s relatively likely the person missing money lets the bank know as they want it back.

Same reason that, in 1854, no one could access your bank ledger and add a 0 there and have it go unnoticed. If that were possible, we wouldn’t be robbing banks for money.

Money leaves a paper trail. LOADS of paper trails. To fake an account balance, there are loads of other transactions you’ll have to fake to make it seem believable. Even more so that it would be much easier in 1854 to fake that than in modern computerized systems with robust security, a bajillion ways to archive transactions and track modifications, and fraud detection.

Thanks for your input everyone sure cleared it up for me haha thank you 👍👍👍