From: Michael Edward Marotta <mercury@well.sf.ca.us>
Date: Fri, 8 Oct 93 22:25:51 PDT
To: cypherpunks@toad.com
Subject: Future of Digital Cash
Message-ID: <93Oct8.222520pdt.14270-4@well.sf.ca.us>
MIME-Version: 1.0
Content-Type: text/plain


Digital Cash: A Probable Future   by Michael E. Marotta   
                                  mercury@well.sf.ca.us
 
Kinkos Copy Centers have instituted a debit-card.  You put your federal 
reserve notes in a machine and increment the electronic card.  Then you 
use the card in their public copiers.  The card is anonymous.  I have two 
because Kinko's doesn't warranty the cards:  I don't carry more than $5 
on a card.  I have yet to trade the card anywhere else for goods or 
services.  This is the sine qua non of money:  money is any medium of 
indirect exchange.  So far, you can only use the Kards to buy Kopies. 
 
Digital cash will not replace other forms.  Federal Reserve paper passes
on the street, perhaps, but gold and silver coins are still being made
anew by the USA, PRC, other governments, and several private mints. 
Plastic, checks, and fiat banknotes have not removed the need for gold 
nd silver.  If anything, government money reinforces the need for real 
cash: "Aurem non olet" means "Gold doesn't smell" i.e., cash leaves no 
traces.  
 
Digital cash could come from banks via ATMs.  You increment your DigiKash 
card from your demand account or from FRNs in your wallet.  You goto a 
store, pick what you want.  You pass through the Exit.  You wand or scan 
your goods.  This clears their security.  You insert your DigiKash card.
It is debited.  You package your goods (or put them in your cloth 
shopping bag) and you leave the store.
 
There was a time when the Grocery Store had clerks.  You gave one your 
shopping list or told them what you wanted and they got it for you.  Then 
came the "supermarket."  Self-serve.  What a concept.  This paradigm 
shift occured about 1945.  We will see another. The retail clerk is on 
the way out.  MacDonald's already ordered 75 robots.  Debit cards remove 
the cost of employees.  You'll use your DigiKard for fastfood.  You'll 
use it at the gas pump.  (They already take credit cards.) 
 
The assumption today is that you will use your BANK debit card for all of 
this.  I'm not sure.  I think that the first bank that offers anonymous 
debit cards will make a fortune.  
 
How?  Well, for one thing, here in Michigan, Kinko's takes 4% off top for 
sales tax. Also, I'm walking around with unspent money on my card while 
Kinko's has my money earning a return.  ATMs already cost me 75 cents per 
transaction.  Make it an even buck and it will work for debit cards. 
Debit cards would be sure winners at Computer Rental stores.  The MSU 
library has a bank of gopher terminals and Gov. Engler just separated 
property taxes from public education.  Gophers seem like a fungible to 
me.  The library already sells pens and copying is a cash business for 
them now.  Public transit is another obvious choice -- the famous Orange 
card of Japan.  Commuter trains in Chicago that toddlin' town had them in 
place in 1977. 
 
But debit cards don't _promise_ universality.  You can't use your Kinkos 
Kard on the train -- yet.
 
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 ( )  "Money rests on the axiom that every man is the owner of his mind.
  O    Money is made possible by the men who produce it.  The words 'to 
  +    make money' hold the essence of human morality. "
  |                                           Francisco d'Anconia, 1957
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