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Agreeing the truth

"It's just a database. It's just *software*."

Folks, Preston Byrne gives you...bitcoin.

At this year's Tomorrow's Transactions Forum, there was a sense, more than in previous years (such as 2014, 2013, 2012, and 2010), of standing at a crossroads. The zeitgeist was less about the desirability of getting rid of cash (though host Dave Birch - head.jpgDave Birch, the "global ambassador" for Consult Hyperion, still longs for death for both cheques and cash), and more about upcoming "monetary pluralism". The latter theme was reflected in art competition assignment to devise monetary systems with embedded social values. The three shortlisted artists proposed trading based on environmental effects, financial transfers effected by transferring bacteria between humans (people on antibiotics: the new underclass), and virtual theft of historic buildings.

The point about bitcoin's being "just software" is this: scalpel away 1ibertarian gold-bug hype and what remains is the blockchain, a technology Byrne's company is working with to enable faster, cheaper chains of transactions. In practice, Elizabeth Rossiello, the CEO of BitPesa, explained her booming Nairobi-based 18-month-old business: someone sending money to Africa starts in their currency of choice, BitPesa transfers it as bitcoin and dispenses local currency at the other end. BitPesa's commission: 3 percent. The point, Rossiello said, is that in the countries she serves banks don't operate, Paypal is blocked, and "There's nothing that works right now." Bitcoin, she said, isn't vaccinating kids or cleaning up the water supply, but it is fulfilling a real user need "even though the technology might be meant for something else". Within a week of her company's launch, "We proved that one aspect of being poor is not lack of skills or equipment, but lack of liquidity." As backup, Jem Bendell cited Will Ruddick, who started an alternative currency in Kenya to help alleviate the waste of human lives.

These solutions to real problems put a different cast on technologies and solutions more typically presented in first-world terms of not wanting to think about money when completing a transaction, to which it's hard not to think, "That's because you *have* it." Removing friction that slows customers down is a yay for retailers, brands, and people in the supermarket checkout line, but in other contexts keeping some friction in the loop may be desirable. It's an essential part of Michael Lewis's case in Flash Boys: shaving milliseconds off the transit between exchanges was giving certain traders unfair advantages and disrupted transparency. On the indebted-individual level, yes, race through the supermarket checkout - but never turn on "one-click".

Heather Schlegal suggested that an important element of the "sharing economy" is the separation of payment from personal transaction. It's a lot easier to make friends with the guests and hosts/drivers you meet through Airbnb or Lyft because handing over cash disrupts in-person emotional connection. It made sense when she said it; a day later, it sounds like a delicate suspension of disbelief, like buying a girlfriend experience. Her story, however, pointed to one of Birch's top five trends for 2015, which he believes will effect radical transformation: in-app payments. Today, 90 percent of mobile phone payments are inside apps "despite the fact that apps are a bit rubbish". As they improve they do they will talk to each other: the train app will be paid directly by the American Express app, and all you will know is you got on the bus and traveled successfully to your destination.

As a consequence, Birch said, "The pressure of globalization from the last 18 years begins to go away." Re-localization: part of the success of global credit cards such as Visa and Mastercard is that no one wants to carry a thousand cards. If they're all on one phone, who cares? This was Byrne's point about blockchains: the rule books are distributed; all changes are tracked; write permissions are controlled by public key cryptography; knowledge of the rules does not confer the ability to change them. It is a system for "agreeing the truth".

Many more kinds of money is a logical consequence of all this: BitPesa users don't care if BitPesa transfers everything in bitcoin or frequent flyer miles as long as they put in British pounds and the recipients get Kenyan shillings. We only care about such intermediate transfers today because of the cost and difficulty added by myriad middlemen all take their cut and add delay. Collapse all that, mix in incipient open banking, and there's the "midlife crisis" Birch says money is having. In his 2013 book, Writing on the Wall: Social Media, the First 2,000 Years, Tom Standage argued that the centralized corporate media of the last 150 years was historically the anomaly; true of money, too?

Even if Schlegal's emotional connections sounded uncomfortably Californian, given the British context, she touched on an aspect of money that was outlined by Nigel Dodd, a sociology professor at the LSE and author of the recent book The Social Life of Money. In it, he, too, sees monetary pluralism in our near future. Money, Dodd said, is "shaped from inside by the social practices of its users". We think of it as a noun - something we have. Instead, he sees it as a verb: something we do. "Money is a process, not a thing." Isn't that just like software?

Wendy M. Grossman is the 2013 winner of the Enigma Award. Her Web site has an extensive archive of her books, articles, and music, and an archive of earlier columns in this series. Stories about the border wars between cyberspace and real life are posted occasionally during the week at the net.wars Pinboard - or follow on Twitter.


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