Making Money Obsolete

I read an article the other day on the use of Smart Phones instead of money in order to pay for things.  The article touted the ease and comfort most people have when it comes to using apps on their phones as a way to purchase things like coffee and goes on to say that this will become a reality by the year 2020.  As I see it, it is an idea that can’t come too soon.

Money is a valued token exchanged for a service or a product.  Whether that token is a shell as used by the Native Americans, or paper currency such as what we use today, these tokens are essentially an arbitrary representation of value.  Currency, actually an envoy of gold and much easier to carry around, has evolved in our age of increasing convenience.  It makes sense we would ultimately turn to a digital means to represent value.  I am frankly surprised that most people surveyed felt this way though.  Humans are generally tactile creatures and it would seem to me that an actual exchange of things would be of more comfort than doing the exchange electronically.  However, as we evolve as a society abstract thinking, such as using a less tangible representation of value seems logical.

Interestingly enough, there exists a gift economy where valuable goods and services are given without any exchange, according to Economist Carl Menger.  Not so much in this culture, though.  Ideally, such giving is done to circulate and redistribute value within the community.  Some think these gifts to be a way to say "I owe you" but may also be a form of insurance or bring some social status. Essentially these were elaborate credit systems prior to the introduction of money.  I see such a system as an administrative nightmare considering we live in an age where no one trusts each other.

The Wiki article I read on the history of money talks about using wine or rum as an exchange for goods or services.  I suppose this is where the giving of a case of beer in exchange for a service that my husband likes to use with his friends came from.  At any rate the concept of using advanced technology so that we don’t have to carry around our wallets is intriguing.  We have already eliminated the need to carry pictures in our wallets, so now not having to carry money or credit cards, makes billfolds totally useless.