[Dave Birch] In The Future of Money
by Benjamin Cohen
, the author says that one of factors that may make it difficult for e-money to substitute for physical notes and coins (“p-money”) is that e-money cannot reproduce the anonymity of p-money. I said that I would come back to this subject when I ad some time to think about. Having done so, it led me to reflect on my experiences in the early days of e-cash, the age of Mondex, VisaCash, DigiCash, CyberCoin and all the others. I had certainly had that opinion in the early days: When I first began working around these schemes, I assumed that anonymity was a key requirement for cash replacement. For one thing, that’s what customers said in market research, which was music to Mondex’s ears. (Note that consumers also said that they wanted the ability to “lock” Mondex cards with a PIN, a feature that I never once saw used in the live service.) But after some time, I began to realise that I was misunderstanding the customers’ desire for anonymity. For the most part, it wasn’t a real requirement at all, but a kind of comfort factor introduced into the portfolio of cash-like features. To use the post-modern visualisation of Umberto Eco
, we shouldn’t have been designing virtual cash, but hypercash: Not an electronic version of cash as it is, but an electronic version of cash as it should be
. I’m not advocating the construction of fantasy money that disconnects from the real world (Eco warns of the dangers of feeling “homesick for Disneyland” in “Travels in Hyperreality”
, whioh was one of those books you enjoy reading, but at the end realise that you haven’t understood it) but more of an inclusive approach. We should be able to at least categorise the requirements of the various stakeholders (I don’t propose to do that here) to get a better idea of what digital money ought to be aiming for, rather than raise the bar no higher than than an electronic simulation of the plastic simulation of the paper simulation of money that we have now.
(This, incidentally, is going to be my rallying cry: No more e-money, it’s time for h-money! More on this later.)
Thinking about anonymity again, my experience back in the day was that, for different reasons, neither the consumers, nor the banks, nor the retailers, nor anyone else actually valued anonymity at all. So if you put it in a tick-box, some people will tick it, but that’s because they haven’t really thought about it. Once they had though about it, their interest in anonymity plummeted. The consumers view of anonymity is essentially negative, because they see the practical day-to-day issues as more important. If I lose my e-cash, I want the bank to find it for me. If I use my e-cash to buy something, I want the merchant to give me loyalty points, and so forth. And if you ask me to pay extra to be anonymous, no chance.
There are two issues here that both need attention. The first is the issue of anonymity itself, and whether it is a necessary, or even desirable, characteristic of the means of exchange. The second is the issue of implementation: whether it is feasible (spoiler: it is) to implement an e-money system that can deliver the requisite degree of anonymity.
I became convinced that the “solution” is not really anonymity, but a reasonable agreement between stakeholders on the extent and scope of the audit trail. So if I use my phone for cash-replacement transactions under ten pounds, I might reasonably expect the details to be kept for 90 days after which they are anonymised so that they can be used for planning and analysis but not for tracking and tracing. This seems to me to be a fruitful debate to start: A combination of the pseudonymity that we are always talking about over on the Digital Identity Blog with the limited audit trail will be key building blocks for h-money.
These opinions are my own (I think) and presented solely in my capacity as an interested member of the general public [posted with ecto]