Vikram Parathalingam explores the socio-economic implications of a cashless society in the future.
Imagine a world without physical money, where you go to a shop and touch a device to transmit your hard earned “cash” through the infinite expanses of the internet. You have heard of the Dollar, the Euro and the Pound. But lately, the hot topic is Bitcoin. Cryptocurrencies have become the subject of utopian praise and criticism alike, with Bitcoin and its $6000 value at its forefront. The cryptocurrency is the first of many media which will become the central method of transaction in the future. It’s a whole new world with a whole new set of benefits and problems.
Give me your wallet!
In terms of security, both private and national, society should be safer. If people no longer trade in physical currency, they will naturally feel more secure knowing that they are less likely to be mugged or targeted, seeing as their money is now in the safety of codes and passwords. Students will be less likely to wake up in the morning (or afternoon) trying to discover the whereabouts of their wallet. The same principle applies nationally. In our future utopia, governments that adopt cryptocurrencies will crack down on illegal financial crime and injustices by tracking money to ensure its legitimacy. Of course, no system is perfect. There is a threat to society should someone hack into the central system. This is, essentially, a significant issue of having all your eggs in one basket. All it takes is one smart individual, who wants a large breakfast, to break down the currency. Do we really want to risk it?
Every Breath you take
Every transaction you make will be watched! The fact of the matter is that while cryptocurrencies are private now, once governments get involved, one’s spending and income patterns will be easier to track as everything is digitalized. This is positive in the sense that there will be greater monetary transparency in society and economic policy making would become more accurate with the availability of more precise data at hand. The flipside is that personal freedom and privacy is infringed. Would you really want someone tracking and verifying your every move? The internet would create a monetary connectivity in society to the extent that people can feel uncomfortable or even violated. The key debate here will be whether the benefits of transparency are worth the costs of sacrificing privacy.
That cryptocurrency is decentralized however, has interestingly enough become the savior of the Venezuelan people and the bane of their government.
Revolt of the Miners
In the recent decade, Venezuela has been confronted with extreme inflation rates, soaring as high as 800% in 2017. This has resulted in the people of Venezuela to mine Bitcoin, a process in which you lend out computer processing power in return for cryptocurrencies. This, combined with recent policies rendering electricity virtually free, has resulted in many Venezuelans dropping the national currency in favor of Bitcoin. The popularity of cryptocurrency is thus no mere fantasy. In this case it is arguably a good thing but the Venezuelan case exposes the potential for cryptocurrencies to roam unchecked and unstoppable.
Put your Bitcoin where your mouth is
Cryptocurrencies are here to stay. We use credit and debit cards on a daily basis, and most of our shopping is done online. The Pleasance gym membership that you’ve never used was probably bought online. Yet, it will certainly take time to manifest on a large scale. There are places in the world where internet access is unheard of. But, cryptocurrency has proved to be efficient and easy. It is not a question of if, but when, it will become the primary transaction mechanism. There is an expiry date on how long private cryptocurrencies like Bitcoin will survive until the government takes over. Why wouldn’t countries want the stability of a cryptocurrency? Why wouldn’t they want transparency? A world without cash is coming.