The Futures of Money

Software	None
Covers	Human computer interaction, economics, computer security, social attitudes to computers
Skills Required	Interest in some of: economics, computer security, ecommerce, games, relationship between technology and society.
Challenge	Conceptual ???? Technical ?? Programming

Brief Description

The internet is too big a place to rely on barter or the networks of trust-based IOUs used by the earliest and smallest human societies. E-commerce, and a lot of games, depend on money. But this isn't necessarily the same money that people use when buying a packet of biscuits at the corner shop, that has physical existence as coins or notes (and we usually forget that banknotes started life as IOUs for coins). It isn't necessarily money that is regulated and backed by national governments.

Non-governmental money based on different standards and guarrantees isn't a new idea. (The author of this proposal remembers reading 40 years ago about an idea for a currency linked to the prices of basic commodities like wheat; anyone investing in commodity-linked money in the 1970s would have lost his shirt.) And some local communities have circulated their own locally-accepted currency. But the internet has made large-scale widely-distributed non-governmental money possible. Bitcoin is widely (in some sense) used - Bitcoins are earned by computational effort, which increases for every new Bitcoin as a hedge against inflation. Is the fact that this is computational effort with no productive worth for anyone a trivial point, or crucial? The Linden Dollars used in Second Life are exchangable with US Dollars at a rate of 250 to 1.

However non-governmental money has many of the same weaknesses as old-fashioned money: it can be stolen in the same ways as conventional electronic funds. So computer security is always going to be a crucial issue. Beyond that, holding assets that no government has a vital interest in protecting may prove dangerous - organizations that create and manage non-governmental money might be shut down if suspected of involvement in criminal activities, or their business models might be legislated out of existence. But well-worked-out systems of non-governmental money might prove better hedges against some kinds of risk, such as uncontrolled inflation, or provide better guarrantees of anonymity for the people who want it.

Your challenge in this project is to explore the possible futures of money. You may choose to focus on one approach to handling money in the digital age, or compare and contrast several, or invent your own business model for a digital currency. You may wish to focus on the computer security issues, or the economic practicalities of one or more models of how money can work, or issues of trust and acceptance, or take a wider view of the relationship between online activities of all sorts and the societies they are embedded in, or look at the ethics of using non-governmental money.

Resources

Some good Emory University student papers are at
https://community.bus.emory.edu/dept/ISOM/Digital/default.aspx

An article by Jason Perlow on how to improve credit cards.

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