What is Ethos
Ethos refer to themselves on their website as the people powered crypto currency platform. Their stated mission is to:
build a financial ecosystem that is open, safe and fair for everybody. Ethos harnesses the power of design, technology and social intelligence to create a breakthrough solution that will enable everyone to participate in the New Economy.
In essence, they are attempting to make crypto currencies more accessible to everyday people. In the process of doing this they aim to change the way the financial services are consumed by existing users, and make them available to a large number of people who currently lack access to these services. These are the people that are commonly referred to as the unbanked.
I’m genuinely interested in any project that aims to make crypto currencies more accessible. The Ethos platform aims to bring together a variety products and services to allow everyday people to interact with the block chain based currencies, and by doing so gain gave greater control over their own finances.
If you read through the material on the website, and there is a lot of useful material, you can see that these guys are really thinking big picture. Whilst their aims are ambitious, if they were able to achieve half of what they are proposing to do, then I think there is a better than average chance that this project might be successful.
They really deep dive into the way in which modern financial services are delivered to the consumer, and the way in which the current structure of financial markets and intermediaries disempowers many of the owners of financial assets. This material really speaks to the heart the philosophical background to most crypto currencies. If you have a background or interest in mainstream finance, some of the thought papers and discussion pieces that they have produced make interesting reading.
To give an example of the level at which they are thinking, one issue that they discuss at length is the issue of custody. Custody in a financial services sense means who controls a financial asset. Most people would think that they control their own assets, but in reality, many people are inadvertently giving custody of their assets to external third parties who may be benefiting from these assets without the owner receiving appropriate compensation. A very simple example of this is a bank account.
If you have a bank account, and most of us do, then you are granting custody of your money to the bank with which you deposit your funds. Most people think no further than this, and are happy to accept small amounts of interest in return for the convenience of electronic payment systems and the security of having their funds stored with a trusted third-party. In reality, what you are doing is providing custody of your assets to the bank. While most banks will certainly provide you with a suite of services in return for custody of your money, what they then do is use your assets as capital to finance their own investment objectives. In the case of a bank, investor deposits are used to secure loans, which the banks charges interest on and generates profits.
This is a very simple example of asset custodianship in the way in which third-party custodians are able to generate benefits for themselves through the use of other people’s money. There is nothing wrong with this in principle, and most of us need the services that financial intermediaries like banks provide. Ethos however, is aiming to provide a financial system whereby you retain access to the services that you require such as secure storage of funds and efficient payment mechanisms, whilst retaining custody of your own assets.
