When I read the article earlier, I was under the impression that there was an any-to-any exchange: any broker could communicate with any other and "send money" directly; I didn't (and still don't) see how such a system could work with very many nodes. Every agent would need to know how much every other agent owed him or vice versa, and every agent would have to be able to authenticate and trust every other. Neither of these concepts seems likely.
On the other hand, if the system were set up like FIDOnet, it could probably be made to work with each broker having to keep track of only a small number of other brokers. The brokers would have to know how to route funds through distant brokers, but would only have to vouch for the honesty of those they dealt with directly.
If the system were a many-to-many arrangement, it would probably be possible (and very useful) for the U.S. to infiltrate it and/or use SIGINT to create bogus transactions. Under the FIDOnet-style arrangement, however, this would be very much more difficult. Also, in a many-to-many system, capture and analysis of brokers' records would allow a certain amount of analysis of money flow. Even if the money flowing into and out of most nodes balanced out, most node-to-node links would not be so well balanced. Under a FIDOnet-style system, however, most of the links are going to balance incoming and outgoing money flows pretty well and analysis of money flow will yield very little information.
Gotta admit--sounds like a pretty clever system.
I think you are right it could only work with a small network. But don't all systems that rely on trust and reputation break down if there are too many participants?
The key is:
the faraway recipient, identified by name or just a code number, goes to an affiliated broker and walks away with that same amount of money
Not just any broker, but one that is part of the network of trust. Its Uncle Muhammad in Cairo, Cousin Muhammad in Paris and your other Cousin Muhammad in Little Rock. Keep it in the family and only do business with people from the neighborhood that you've known all your life and your vulnerability for being penetrated is insignificant(but still not zero).
But, it is also specialized depending on the route the money needs to travel. One broker may put out that he specializes in delivery to the S. American countries of Brazil and Columbia as an example and will handle many transactions for those destinations.
Lastly, when criminals use the system it seems that the paperless form of transaction plays an essential role in "laundering" the money. Thanks.