(Digital) Money, Honey

We pay for just about everything with a credit card, a debit card, PayPal. Even parking meters accept card payments. Cash is dirty, difficult to store, easy to lose, and (for better or for worse) leaves no trace. The end of money has been predicted for a long time. Maybe now’s the time that money, like photographic film, drive-in theaters, and typewriters, fades away.

That’s the theory behind WIRED contributing editor David Wolman’s book, The End of Money published by Da Capo. The book is an easy read, filled with anecdotes, interesting histories, and a great many examples of alternatives to our current cash-and-coins conception of valuable exchange. Wolman points out the present system is, in fact, quite new, and that most of human history did not involve pennies, pfennigs, or pesos. He estimates that one of every twenty British coins is counterfeit. He points to cash on ice both in Alaska Senator Ted Stevens’ freezer and also in a visit to the fallen Icelandic economy. (There are so many wonderful slang terms: cold hard cash among them). He explores alternative currencies. The one about Liberty Dollars–“a private voluntary free-market currency backed entirely by silver and gold.”–is a long trip through the complexities of alternative currencies and contemporary Federal conceptions of money.

There’s discussion–not enough for my taste–about smart cards and the use of mobile devices as digital wallets. Here, the focus is on the many small daily transactions that remain cash-intensive, and the potential for a simpler, less costly, more manageable system based upon digital transactions. The upside: you’re never short a quarter for the parking meter; the downside: every time you park your car, you’re making an entry into your permanent record.

Be sure to read the crazy story. It’s just one paragraph on Wikipedia.

It’s interesting to muse on the current use of simulated currencies, if only to understand our possible future behaviors: accumulating gold coins in games, such as World of Warcraft; the possible connections between gamefied badges and currency that can be exchanged for real or virtual goods and services; the use of Quids on the (now gone?) website Superfluid, where “they’re placeholders for favors” (perhaps not unlike the favor/exchange economy that drives power and accomplishment in the nation’s capital). Where might frequent flier miles fit into the money equation? Or Disney Dollars that pay for fun in Orlando (now largely replaced by Disney Gift Cards because they yield far more digital data, and because the residue is easily converted to profit.) How about the barter economy that has been so well-nourished on the internet: you build my website, I do your taxes.

How does taxation fit into any of this? None of us love taxes, but we’ve certainly become attached to, say, our interstate highway system. I suppose most transactions will be digital, and so, there is a trackable moment of exchange, and at that moment, the tax authorities can step-in (digitally) and collect. How about pay checks? Direct deposit eliminates the old-fashioned notion of “cashing the paycheck”–and, perhaps, acknowledging the weirdness of Big Brother, preparing one’s own personal tax return may seem equally old school (armed with your entire digital financial life, the government could certainly outsource your tax return, mine to, to an outfit in Malaysia or Peru).

Are coins and cash going away? Not this year, but maybe in ten years. It’s fascinating to contemplate the possibilities. And, along the way, it’s fun to browse or read The End of Money.

It’s also fun to watch the CBS Sunday Morning report that was inspired by the book. If you can find the link, let me know and I’ll post it (couldn’t find it on the CBS Sunday Morning site).

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