Hi-
I'm a journalist writing an article for an on-line magazine about emoney.Seeing your site on the web...
Hi, I have no Web site of my own. You probably saw my E-Money FAQ on someone else's site and thought I was the site manager. That's ok, you're not the first to make that mistake.
I was hoping I might ask you a few very general questions about the future on emoney as you see it. My article is called a "futureview" article, meaning it makes some guesses at what changes people can expect because of new technology.
I'll be happy to answer your questions as best I can.
-How will the adoption of e-money or e-cash change the workplace? Will some kinds of businesses or practices prosper while others fail?
-How will emoney or ecash change people's daily lives at home? (More home shopping?)
-If you had to guess, what do you think the future of emoney will be?
-Are there any words of hope/caution you'd like people to know?
Thanks in adviance for any help you can give. If you have more questions about myself or the artcle, feel free to call or write me.
Mary Leontovich xxx/xxx-xxxx email: maryl@efn.org
Rather than answer each question individually, I'll just ramble on about e-money for a bit and hopefully I'll convey some interesting opinions. The first thing to recognize is that there are two arenas to consider when discussing e-money; the on-line arena and the "about town" arena. I'll first discuss the "about town" arena. It will take a decade or more, but eventually e-money purchases will be as common as credit card purchases. People will carry e-money cards right along side their credit cards. Rather than handing over a few dollar bills, people will insert e-money cards into readers. ATM machines will provide an option to charge up e-money cards. Credit card systems and e-money system will co-exist, and in fact you will be able to easily transfer value between credit cards and e-money cards. It is quite likely that the major credit card companies will issue multi-purpose super-cards(tm) that can act as either credit or e-money cards, reducing the number of cards people carry. Paper money will never go away completely (unless government stops backing paper money), but there are a variety of reasons most people will switch from using paper money to using e-money cards: 1) The card can easily keep a record of all a person's e-money purchases. The record can be up-loaded into popular PC-based money management software. 2) The card can hold "change" and well as "large bills". No need to carry around a pocketful of coins. 3) The money in the card can't be spent unless the proper PIN number (or thumb print, etc) is provided. Paper money can be spent by any thief. Some e-money cards may allow you get reimbursed for lost or stolen e-money. Others may only be able to "void" the lost money. 4) Some e-money system may allow you to make back-up copies of your e-money, in case the card gets damaged. 5) Paper money wears out, gets torn, etc. 6) Paper money, even in moderate quantities, is bulky. 7) Paper money has to be counted, and people must wait around while change is tallied up. Mistakes could be made. E-money cards will be relatively fool-proof and will work as fast or faster than current credit cards. And now the online arena... People will be able to purchase inexpensive devices that can be connected to their PC to transfer e-money from card to computer, and vice versa. This device may become a pseudo-standard peripheral, much like a sound card is today. People will be able to purchase items securely over the Internet using either credit card numbers or e-money. A good question to ask might be "If people can make secure credit card purchases over the Internet, why would they use e-money over the Internet?" There are a variety of reasons people might use e-money rather that credit cards online: 1) The item may cost only a few pennies, or less. Not enough to warrant using a credit card. 2) The vender may not accept credit cards. 3) You may not wish to give the vender your credit card number until you have established that the vender is trustworthy. 4) You may wish to pay in "cash" rather than add to your credit card balance. 5) You may wish to avoid revealing your "about town" identity to the vendor. Why might a vender accept e-money, but not credit cards? Well, it costs money to accept credit cards. It will probably cost less money to accept e-money. Very small companies that exist only on-line may not want to pay the expense to hook up to the credit card infrastructure. Cheap e-money will lower the barriers to entry for online business. Huge numbers of very small players will come online. The meaning of the term online "business" will change as it becomes easy and economical for individuals to charge very small amounts for data or services. When something become cheap and easy (ala World Wide Web), it will become very popular. When it is also a way to make money, it will become common-place. Most everyone with a PC will find a way to make a little money on the side by selling something online. Maybe people will sell idle CPU time or unused disk space on their home PCs to people using future Java-like distributed applications. All this new economic activity will of course be taxed. That is, if government has any say in the matter. And you can be sure government will do its best to have a say. From reading my E-money FAQ you know there are two possible kinds of e-money systems: identified and anonymous. For both tax reasons and law enforcement reasons, governments will do their best to insure that anonymous e-money systems fail in the marketplace. Perhaps by outright banning them, or by subsidizing identified e-money systems, or by not insuring bank accounts that accept anonymous e-money, or by mandating accounting or identification systems that preclude the use of anonymous e-money. I'm sure there are other tactics government could use. Should people care? What's so bad about identified e-money? What's so good about anonymous e-money? Most people don't seem terribly upset about the personal information they reveal by using credit cards so it is reasonable to assume most people will not be upset about the personal information they reveal by using identified e-money. I predict that anonymous e-money systems will not fare well in the marketplace for the following reasons: 1) Government pressure against anonymous e-money. 2) Identified e-money systems are easier to build. 3) Certain technologies necessary for anonymous e-money are patented. E-money system builders will tend to roll their own identified e-money systems, rather than pay fees or royalties to the patent holders. 4) The financial risks associated with anonymous e-money are more complex and harder to evaluate than the financial risks associated with identified e-money. The conservative money will tend to back systems with the lower perceived risk, even if the risks associated with anonymous e-money are manageable. 5) Identified e-money systems can provide the same external features and conveniences as anonymous e-money systems and will most likely become widely deployed sooner than anonymous e-money systems. Once people become accustomed to identified e-money systems, it is unlikely they will push for a change to anonymous e-money systems. It is hard for me to explain the reasons why anonymous e-money is preferred over identified e-money. The reasons fall into the "Do you trust government, or not" category. "Do you want the government to know about every penny you spend?" These sort of concerns are easily dismissed as alarmist. After all, say many people, if the government gets out of hand we can just vote in different law makers. That's how democracy works. Well, I don't believe it would be that easy. Imagine how hard it would be to get rid of social security cards. The information conveyed via identified e-money is directly useful to tax agencies and law enforcement. The information has other governmental and commercial uses, too. As with social security numbers, the infrastructure that utilizes identified e-money information will become larger the longer the systems are in use. After a time, it will take a ideological revolution to convince government and business it must do without such detailed personal information. And revolutions, ideological or otherwise, are never painless. I hope I'm wrong and identified e-money is nothing to worry about. And maybe big government can be trusted. :-) Jim_Miller@suite.com P.S. I CC'ed this reply to the cypherpunks mailing list. You might get additional replies from people on that list. ____________________________________________________________________ The Internet is a land bridge for memes ____________________________________________________________________