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Message:: [QUOTE="kaparthy, post: 3717006, member: 57463"]In the future, we will recognize money created by individuals, rather than by organizations. Individuals such as Taylor Swift, Bill Gates, Warren Buffet, and Oprah Winfrey are certainly in positions of visibility and trust to enable that.[ATTACH]996358[/ATTACH](This presentation is based on “The Future of Money “ delivered on August 14, 2019, at the ANA “World’s Fair of Money” Maynard Sundman/Littleton Coin Lecture Series.) Third-party trust services such as Paypal could enable everyone to issue their own personal money. We have had reporting mechanisms such as Moody’s and Barron’s for over 100 years. And of course, we now have Equifax, TransUnion, Experian. But they are only the inheritors of the Bank Note Reporters of the early to mid 19th century. Money markets could be radically restructured by some new reporting mechanism. In a session that I attended in the audience on the future of law, it was suggested that the blockchain mechanism could allow evolving contracts. So, too, would a blockchain identity manager allow you to always show the spendability of the money you issue. [ATTACH]996359[/ATTACH]The idea of personal money was explained in two books from the 1930s. A New Approach to Freedom and The Flight from Inflation by E. C. Riegel. They would have remained even more obscure than they are had they not been touted to the libertarian community by Harry Browne, the author of How to Profit from a Monetary Crisis and other books consumed by gold bugs. For that he was the Libertarian Party presidential candidate in 1996 and 2000. You all know that we define money as being a medium of exchange, a store of value, and a unit of account. Those have become decoupled. The U.S. dollar is not a good store of value, granted that it is better than most of the national currencies around the globe. Gold is a better store of value, but it is not a medium of exchange, at least not on the streets. However, the dollar remains a popular unit of account. Multinational corporations headquartered in Europe and Asia keep their books and report to investors using U.S. dollars as the common measure. By comparison, in the USA, into the 1830s, merchants along the eastern seaboard often kept their books in pounds-shillings-pence of the United Kingdom. Most of their trade was trans-Atlantic. The three attributes that we learned in economics classes no longer apply and perhaps never did. In the future, whatever money is in one context, it may not be in another. In a world where money is tied to identity, money will have one or more of the three attributes that information technology uses for personal identity: something you have; something you know; something you are. Those are three different things that can be inter-related but need not be.[ATTACH]996360[/ATTACH]The future can take many paths, depending on who you are. You might think of colonies on the Moon and Mars, and the big wheel spinning space station. You might consider life on Earth to be a complex, trashy cyberspace frontier. And they are not mutually exclusive. Whatever the future brings to you, personally, it will help to keep in mind the axiomatic truths that define and explain our experiences. In order to understand the future of money, we need to look at the origins of money. In The Economy of Cities Jane Jacobs said that contrary to Peter Schumpeter’s theory of “creative destruction” very little is actually destroyed by innovation. Jacobs pointed out that when steam machinery began to supplant literal horsepower, the craftsmen who had been making brass fittings for horse tack put their lathes and hammers to work turning out fittings for industrial machinery. This was supported 40 years later by George Selgin’s book Good Money: Birmingham Button Makers, the Royal Mint, and the Beginnings of Modern Coinage, 1775–1821. So, I assert confidently that as much the future will bring unpredictable novelties, many of the structures and functions that we have in our social institutions today—especially money—will continue and will evolve. A hundred years from now, people will not be spending uranium coins on the streets of Chicago. But do not be surprised if an asteroid colony begins to issue advertising trinkets made from rhenium, osmium, iridium or whatever it is that they have a lot of and want to sell. But speaking of Chicago and the continuity of commerce, 2500 years ago, cows were money. Today, on the commodities exchanges in Chicago, you can trade cows, and wheat, and gold in quantities unimaginable to our ancestors. Money may take different forms and formats. But we will always have an affinity for tangibles. ·       Something you have.·       Something you know. ·       Something you are.Those are the three parameters of information security. Something you have is a token, a key, a card, a coin, a chit, a USB drive, an RFID fob, anything physical, including a biometric scan from your finger or eye. (I must note that many security researchers consider biometrics as “something you are.” I disagree with the taxonomy. Biometrics are just something you have and carry closer.) Something you know is your password, of course, including the code sent to your phone in two-factor process. But, today, it is also the ability to recognize a picture block for Captcha, or enter a simple sum. We also have back-ups such as the name of your first pet. “Something you are.”  This derives from aspects of personhood that are harder to falsify. DNA is an example. Though false DNA identification is known, instances are rare. Your reputation is your public presentation. Being a member of a social group, a religious order, a military unit is something you are. Today, on the bourse floor, if you want to write a check, the dealer will ask you who you know. You will point across the aisles to one or two others, and with some waves and nods, your paper promise will be validated by your reputation, by who you  are. In the age of steam, "when old technologies were new," telegraphers wore union membership buttons that were recognized as an unofficial and unauthorized “pass” by sympathetic railroad conductors. It was solidarity.[ATTACH]996362[/ATTACH] [ATTACH]996373[/ATTACH]We commonly believe that pastoralism and agriculture led to surpluses that were traded by barter, my excess chickens for your excess potatoes. Eventually, people figured out that the best barter goods were metals and copper, silver, and gold became money. It just ain’t so. In fact, money has its roots in ritual gift exchange. This was presented recently by anthropologist David Graebner in his book, Debt: The First 5,000 Years. As human societies developed, social status came to define the rules of gift exchange. Even today, when we make a purchase, both parties often say, “Thank you.”[ATTACH]996361[/ATTACH]Starting about 7000 BCE the people of Sumeria invented a system of clay tokens to keep track of gifts to the city temple. These are all about the size of the tokens known from the popular board game Monopoly. The oldest and simplest disks represent basic farm goods such as “A Sheep.” Eventually, new tokens stood for classes of animals – sheep, goats - rams, ewes, kids. Then, metals and grains were differentiated. Tokens stood for bottles of beer and woven textiles. (I point out that today, we have coins shaped like guitars and baseball gloves. This will continue into the future.) It took about 4000 years, but eventually, inscribed pictographs and cuneiform writing were developed as ways to represent tokens without actually needing the tokens. In parallel with the development of writing was the development of counting. Fred Flintstone could not count to ten. He only counted to three. And the earliest written records we have of large numbers such as five and six and beyond call them two-two-one and three-three. Eventually, over the same 4000 years, shorthand names for big numbers became the words we have for one through ten and beyond. We speak today of virtual currencies but the system of pounds-shillings-pence was invented by medieval bankers to come to grips with a huge array a plethora of local coinages whose weights and finenesses changed over time. During the great fairs of the Middle Ages, bankers met to clear their books of assets and liabilities and they reconciled their accounts without ever touching a coin.[ATTACH]996364[/ATTACH] [ATTACH]996365[/ATTACH]This was facilitated by a new form of enumeration, so-called Arabic numbers conceptually different from Roman numerals. Nothing teaches arithmetic like money. The largest number in Alexander the Great’s experience was the myriad, 100 x 100 = 10,000.  We measure our computer processors in gigahertz and memories in terabytes. Consider now that the prime factors of 39903841 are 5039 and 7919. You can almost do it in your head and in the future, many people will do that Just about everyone here can speak within one or two seconds how much 17 times 7 is. But 500 years ago, you needed a counting board or an abacus to do that.  The point here is that the factors of large primes are one basis for public key cryptosystems that are used to verify and validate communications from international financial transactions to your next phone call. Large prime numbers will continue to be the basis for money in the future. In the future, people will do extremely complex calculations in their heads, perhaps with the aid of embedded silicon, maybe with enhanced RNA. Of the many truths established by anthropologist David Graebner is that no society ever transitioned from barter to money. Barter is what people resort to when money fails. In the future (no surprise) money will sometimes fail. Issuers will be discovered to be insolvent. They may lose popularity through scandal—even if other currencies rise by the same process. People (and other entities) who become isolated from the channels of trade will resort to ad hoc media. New forms and formats, procedures, processes, and policies will be invented, of course, but they will have deep roots in the living history of money.[/QUOTE]

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