Ripple - Internet IOUs

From a post by Mark Baker, the
Ripple payment system looks facinating! This is very intriguing because two nights ago I was wondering about payment systems and whether banks support 'request for transfer' requests in addition to just transfer-in and transfer-out requests. I imagine the problem of spam with request-for-transfer-out would be a problem. Anyway, the Ripple system is a distributed network of trust for the exchange of digital IOUs. These can be exchanged for products, services or even cash - anything of value. It'll be interesting to see what happens if someone integrates this with Edgeio or Craigslist (think 'mashup'). I haven't finished reading the whole site, so there are lots of open questions around fraud and actual overhead of participation, but this is all very cool.

Their About page is a good place to start.
From their FAQ:

How do I cancel debt on the system once it's been settled?

When two connected account partners settle a Ripple obligation outside the system, for example, by using cash, the person receiving the settlement must record it in the system by returning the settled IOUs to their issuer. They do this by making a regular Ripple payment to the person who settled their debt with you. Your mutual account balance will be changed to reflect the fact that the debt has been settled. In effect, they are using the IOUs they hold on the Ripple system to purchase cash.

The Internet is evolving it's own system of governing - of the people, by the people, for the people. First it started with communication, then community and now commerce. It seems inevitable that it's members will become an independent government unto itself. It won't start out perfect. Behavior, laws and regulations will continue to adapt, just as historical governing regulations have changed over time. But this tells me that there is a reason why this technology stuff is important. It is the technology of these Internet based systems that help private citizens remain private and remain citizens - and keep on being free. All changes start with a small ripple.