We've gotten our fur backed up by the FDIC "know your customer". Along those lines, I wonder how many here are aware of the book:

The Millenium Bug : Gateway to the Cashless Society? Mark A. Ludwig / Paperback / Published 1998

Let's see in how few words I can summarize the simple and somewhat ingenious idea of this book.

Money is always becoming more abstract. A big watershed was early depression era, when money was taken off gold backing, and private gold holdings for monetary value was made illegal. Next watershed: y2k, when crisis of faith in computers SHOULD make cash king, but there'll be a shortfall. To prevent cash becoming king (thus favoring the few cash holders at expense of everyone else), the Feds will take next step: money can ONLY be electronic, cash will be declared first, null value, then, illegal to hold! Same as with gold before.

Clever huh ? Notice it turns the 'cash will be king' assumption totally inside out.

The only small problem with this will be getting the computers to cooperate. Otherwise, individual ammo cartridges will replace cash.

-RC

-- R. W. Cat (runway_cat@hotmail.com), December 09, 1998

Answers

I wouldn't be surprised if there are powermongers thinking in these terms. However, there won't be enough time to create these policies, and if communications break down, no way to enforce those policies. The Feds can't say in October of '99 "OK, gang, cash is illegal" and not expect to be violently overthrown as a result. After that point, chances are it will be irrelevant, for a while at least.

However, around 2004 or 2005, when the next iteration of civilization starts to become apparent, and the next wave of technology begins to be implimented, I wouldn't be at all surprised if a global electronic currency becomes the standard. Probably in the form of some kind of invisible scanning code on your skin. You know, three lines of six digits on each line...

-- pshannon (pshannon@inch.com), December 09, 1998.

Thought Nixon took away the gold standard in 1973? Could be wrong.

It's not a secret in banking that everything is evolving towards cashless as a means (at least) to contain counterfeiting. Probably would have already been implemented if there weren't so many logistical difficulties and of course, the obvious resistance of the masses in regards to the mark of the beast.

Several prerequisites are required:

1. Absolutely everything that you use cash for today has to have the capability to scan a microchip and to accept and dispense credits and debits into the electronic banking system. That includes newspaper stands, vending machines, ballpark vendors, tollbooths, etc. Lots of things aren't ready and I can't imagine that Y2K will make it any easier to get ready.

2. The electronic banking system today is still too slow and cumbersome to be useful in supplanting cash. It's getting there, but not yet. Banks would no longer be used for checking accounts. There would have to be one single repository for all electronic cash accounts so that everyone debits and credits from the same source. This is necessary to speed up processing by eliminating all of the various clearinghouses that electronic transactions use today and to ensure an accurate up-to-the-second account balance to guarantee no overdraws. Again, such a systenand network does not exist today and will likely be hampered by Y2K.

3. There are a multitude of logistical issues involving everyday practicality of using such as system. What do you do when the phone lines are down and you're trying to pay for the dinner you just finished? What do you do when your microchip gets erased by the airport scanners? Those kinds of things. Not necessarily show-stoppers, but definitely obstacles.

I agree that's where we're heading, but I think we have a number of years before we have to worry about it.

David

-- David (David@BankPacman.com), December 09, 1998.

Two things - an EEPROM smartcard could not be erased except by very heavy doses of xrays or uv over several minutes (you would definitely take some damage if it was in your pocket) or perhaps by a big electrical discharge nearby. As for the info transfer - it is possible to keep all your personal info on the card itself including balances. Another way is just to download the data (encrypted, I hope) onto every pay machine instead of trying to process it remotely and then batch the information transfers to a certain time or certain number of transfers to minimize load on the phone lines. So your bank balance would be known to a zillion machines all over the country, and would be rebroadcast to every one of them several times a day. Hey, I don't like that - but it can be done.

-- Paul Davis (davisp1953@yahoo.com), December 09, 1998.

Paul, is a smartcard vulnerable to any physical damage such as by impact or abrasion? Just curious, I know that mag strips on credit cards today get easily damaged, but I'm not sure if smartcards are.

Also, your suggestion for carrying the balances around in the card is a consideration today, but problems exist. Basically, we have that today in ATM debit cards used for point of service purchases. The problem is that since debits are not taken directly from the master bank account, a multitude of various purchases can leave the accounts overdrawn. For instance, a customer has a $100 master bank balance which is transmitted to various networks (PLUS, CIRRUS, etc.) and updated periodically throughout the day. Each network maintains their own remote bank balance in-between updates. The customer uses their Visa debit card to pay for $100 worth of groceries using a balance maintained by Visa, then proceeds to debit their ATM account from a foreign machine for $100 using their balance maintained by CIRRUS and at the same time an automatic electronic debit is received by the bank for $100 to cover auto insurance for that month debiting the master bank balance. At the end of the day, the account balance is -$300. Customer decides to switch banks leaving the $300 loss. Sounds petty, but it happens everyday especially with checks involved which may or may not be eliminated in some cashless scenarios.

One idea to get around that problem is to issue "money" cards where customers withdraw debits from their ATM or internet link from their master bank account and store it on the card to be used for purchases. It reduces the risk for losses by the bank, but the customer is at greater risk since the card is money and is still subject to theft or damage.

-- David (David@BankPacman.com), December 09, 1998.

Barter works for me. Knowledge, experience and wisdom too.

Diane

-- Diane J. Squire (sacredspaces@yahoo.com), December 09, 1998.

"Money cards" Maybe, maybe not.

They are issued now by k-mart for instance. When you return anything for credit, they give you plastic with the amount imbedded in it to take to the register. You can add to these cards at the register as I do occasionally, to build a fallback for Christmas, etc. Its money in my wallet that I don't think about until the time comes for what it was meant for. Certainly would be the way to go to carry your own "money" with no need for electronic connections on every purchase.

The cards dispense electronic dollars until the balance is zero. Just a matter of subtraction? I'm sure Kmart also has a cross check in their own computer so that I don't exceed what they put into the card.

So what happens when the receiving vendor knows how to increment the total number of electronic dollars to his plastic kitty, without actually taking them from another card? Certainly a working system wouldn't require that every vendor would need to identify and include banking info from every person he sold to, for cross check purposes.

It seems to me that any method of reading magnetic amounts of money could be outsmarted. If it was allowed that anyone could unload a plastic card full of money into their account without needing to explain every nickel and where it came from, just would not fly.

Me.

-- Floyd Baker (fbaker@wzrd.com), December 09, 1998.

uh, excuse me guys...but who said that the continued reign of capitalism post y2K was a given? A good socialist revolution after the crash (and ensuing bloodbath) would obviate the need for such fancy things as "intelligent plastic".

-- a (a@a.a), December 09, 1998.

ammo, or food, or clothing (there's gotta be *somebody* else on this forum besides me who can't sew worth a hoot), or cigarrettes, or whatever...cash doesn't have to be paper dollars or anything resembling paper dollars...it will be what is neccessary for people to trade for neccessities.

personally I chucked that particular theory into the same wastebasket as the space aliens and giant invading chinese armies hiding in the mexican desert...*sigh*

Arlin Adams

-- Arlin H. Adams (ahadams@ix.netcom.com), December 09, 1998.

Hey a@a, the electronic funds transfer system along with positive biometric ID systems, ecommerce, and the internet as the next- generation telecomm service are obvious solutions to all kinds of problems in the post-y2k world. Currency is dead money walking. It's going the way of 35mm film and the dodo bird. Besides, if the looney tunes (a term coined in the ElectRon-ic age for radical and violent extremists) get bad, we'll need profiling and surveillance to protect the innocent. Public security and private freedom are tradeoffs.

As for capitalism, there may be some decapitalism during the shakeout phase bloodbath, but eventually, it will mutate and rear it's ugly head(s) in a new y2k-resistant form.

-- Jon (jonmiles@pacbell.net), December 10, 1998.

Floyd,

The way to stop shenanigans such as you describe is to encrypt the information on the card. This can be (and already is) done in such a way as to prevent each party to a transaction from obtaining more information than authorized, or from falsifying information.

If you have a way to break modern encryption methods, don't waste it on petty stuff like smart cards.

-- No Spam Please (anon@ymous.com), December 10, 1998.