“Future where money is only electronic”
Son Chunsuparerk

Part A : Technological Infrastructure
The following key enablers make the future possible

Computing form factor: As all financial activities, including day-to-day merchandise will become electronic, the computer form factor will evolve in the way that allows people to carry it anywhere and everywhere. Computers will be smaller, faster, and embedded into human body to facilitate real time communication for financial activities. From history, computer forms have evolved from time to time. From a poor performance computer that filled the entire room to a bulky computer that sat on the entire table, to now being small compact laptop, tablet, and mobile that fit in a tiny pocket.

In today’s environment, credit card is a great example how money went partially electronically. The drawback of using a credit card is that of the credit card receiver (eg. credit card is unusable if there is no device to accept). The future will need computers to miniaturize into a small fingertip size, which enables money to seamlessly transfer from one party to another. Credit card receivers will be small enough to fit into a wallet, just like a credit card, and have the functionalities to control over all financial needs just like using cash/check today.

Power: In order to keep mobility and minimal form factor, one needs to consider its on power. In the future, power consumption on certain devices will be low, while power generation will be high in order to ensure usability throughout the day. Tiny solar cell, or kinetic power generation are enough to supply power to the entire device. Vibration and movement from regular activities will supply low energy consumption devices. Idle devices will consume nearly zero power, which could help extend usage for years without recharge. Small but powerful battery cells will be used as a buffer to ensure energy is sufficient for particular activities.

Processing, Communication, and Data Storage: Imagine one live in the world with population of 7 billion, and people perform electronic transaction instead of using cash. This requires tremendous amount of processing (describes how the transaction is processed at the front and backend, namely, point of sale and bank), communication (describes how the transaction is communicated back and forth), and data storage (describes how data is kept and used). To illustrate, lets say data embedded with financial information, communication, and security protocol will use an average of 200 kb/transaction. Considering the world’s population of 7 billion, this means 1.4 petabyte (1015). This is the cost for only one transaction. People, in general, have multiple transactions everyday. Transferred data will be required to be kept and stored in the database to ensure traceability for life. It is easy to imagine that storage would easily reach exa-(1018), zetta-(1021), yotta-(1024) which nobody could ever imagine today. As being said, powerful processing power, high bandwidth communication, and advanced storage system are essential to enable electronic transactions to the edge.

Data security:
Currently, nobody wants to give away money without his or her authority; this will remain true in the future, too. The only difference will be dealing with money physically (eg. bills, coins, checks), versus electronically (online transactions). Data security will be priorities as an effort to prevent unwanted actions of unauthorized users. Many sub-technologies can facilitate the success, including Advance Encryption Standard (AES), Data Encryption Standard (DES) since all data will be transferred from one another. Data is required to be encrypted and securely communicated in order to avoid cyber attacks. Security measurements will need to be stronger and stronger to ensure maximum security to protect all vulnerable data. In a similar fashion, a technology could be supported by automated process to double check suspicious activities (e.g. IBM is having “Activity Correlation Technology (ACT)” solution to monitor irregular activities according to individual pattern).

To gain access to data, there will be an implementation of technology that could identify an individual unique identity. Example includes the use of Biometric technology (fingerprints, IRIS, face, etc.) to identify a person’s identity. It would eventually replace a current use of a password to gain access, eliminating the fact that one has hundreds of password to remember on different systems. Also, it will overcome a weakness that anyone can gain access with a correct key. The future will embrace biometric as a standard to replace current password pitfalls.

Transaction integrity:
Another important aspect to consider is data integrity. This needs to guarantee that encrypted data is verified, completed, and correctly delivered to the sender and receiver. Consequences can be severe if only a single digit number is missed. Data is required to prevent potential errors and inconsistencies. Data integrity software is already embedded in the current hardware. For example, network equipment has software to check integrity of distributed data. However, using today’s integrity check may not be optimal for the future where massive amounts of data are needed. Future compels further development of data integrity, to ensure more accuracy and optimal responsiveness.

Reliability:
Data availability and system availability are discussed in terms of system reliability. As mentioned earlier, a future requires greater amounts of data to the overall system. In turn, the amount of data would degrade overall system performance, or in the worst case, it would make systems down and inaccessible.

System reliability (including data and system availability) is determined from individual component. To illustrate this, I would like to give an example of a simple computer setup. In order to make a computer system operable, we need to put together many components (eg. mainboard, memory, CPU, power supply, screen, peripheral, etc.) If one component fails, it would bring the system to be failure as well. One way to have more reliability is to have a redundant system, and that will impact to cost.

In terms of data and system availability, it will work similarly to the way a simple computer is setup. However, an electronic money system may be comprised of thousands of subcomponents, which creates complexity to reliability study. All in all, system reliability certainly cannot be overlooked.

Type of workers
During the Stone Age era, humans created an axe by crafting a rock to a desired shape. Just decades ago, humans again invented the Internet as a communication media between networks. Moving forward to a 100% electronic finance has no difference, as technology is manmade, humans will need to invent the technology.

According to Bozeman, many technologies in the 20th century were invented from university research, private firms and government laboratory. As we can see, university R&D plays an important role to feed the ‘capable’ workforces to market in the near future. Students in engineering or computer sciences will transfer their knowledge, for example, working in the government or private laboratory for postgraduate job replacement.

To promote a growth in electronic money, one may monitor the number of researches on mobile computing (wearable computing, mobility), connectivity (4G, 5G), E-business (shopping without physically attach to a location), computer security, cloud computing, and so on.

Government policy:
People trade their goods or skills to ‘physical’ money. Coins, bills, checks are being used today as the government had declared them as approved mediums of exchange. Therefore, one contribution to the future is a policy to identify electronic cash as the only way to trade. Government can also promote a rapid growth of technology by giving political rewards such as research funding, or other incentives to the technology development. Currently, there are many financial supports available from government in certain research fields. An investment from government will eventually pay back in terms of technology breakthroughs for the world.

Part B : Future
This paper will only describe one possible future as opposed to what I have learnt in class due to time constraints.

The following elements will be evolved given future where “money is only electronic”.

Employment and education needs
In a previous section, I have described how university research would impact the future of electronic money. The fact is that education increases a chance of obtaining employment. An increasing market demand of electronic money will raise demand for employment in terms of computer science positions and other related specialization fields.

As the market demand is not saturated, people will continue to study computer security, mobile computing, electronic business, cloud computing, and other related fields that can advance technology to the next level. University may announce a new program outside the originated country. For instance, a rising of global cyber security thread could trigger MIT (Massachusetts Institute of Technology) to establish an off-campus program in China or India. This will be an immediate benefit for the university to have access to talented students and allow students to pursue their higher education from home countries.

Illegal activities
Illegal activities will evolve in many different ways because cash is no longer a standard form of exchange. Thief will not be interested in cash, but instead focus on other valuable things (like jewelry, gold, diamonds, etc.). There might be an increase in incidents on identity thefts. For example, somebody might spend a million in a casino on my behalf, while I was at the office working. Drug dealers will continue their business, but change the money to other forms of medium. For example, they might trade drugs with goods or service, and ‘launder’ their dirty goods into other forms, making it impossible to trace. This process is similar to money laundering today. Prostitution as legitimate business (for some countries) will remain the same. On the other hand, illegal prostitution will be obsolete. Detail discussion is explained under ‘informal economic activity’.

Informal economic activity
All informal activities will become formal. As money becomes traceable, getting small incentives such as begging, busking, tipping will be shown on individual accounts. As a result, it will account as an annual income that is applicable for taxes. Furthermore, tax will also apply to another sources of incomes such as gigs (known as shadow economy), selling second hand stuffs, trading service for money. Moving from informal to formal trading activities will make a broad impact to society. Since people will start paying taxes (opposed to current behavior). People will set an expectation on better social welfare, public transportation, and any services that are provided by the government. People will demand to make changes either on improving the current government structure or asking to revise the tax policy.

Economic system
Overall, global economics will be growing rapidly. One of the biggest issues for all nations is with tax evasion problems. Governments lose their revenue every year from businesses who avoid taxes. In the future, no matter how big or small, poor or rich, a firm is, everyone will have the same duties to pay taxes. The situation will be driven by the fact that all payments go electronically and become auditable. Moreover, people’s credit will become extremely important. All bank accounts will be merged to a single credit bureau system that can determine one’s financial status.

Appropriate tax earning would give government a new window to spend money and provide more robust public services. They would possibly budget to create more jobs, improve education, develop a better healthcare, which would help fund to compete with multi-nations, etc. In a nutshell, earnings from taxes would promote a nation’s economy in return.

Societal needs
Societal needs (physiologial, safety, love, esteem, self actualization, according to Maslow’s law) will remain the same. However, it will have an improvement to employment safety benefited from overall economic growth.

(Note that we have a short discussion on Maslow’s hierarchy of needs when one student brought it up. Just in case you think it is not related to the analysis here).

Parenting
Cultural values on parenting will be slightly changed. Until parents are confident that their children are mature enough to manage their finances, parents will be able to monitor all financial activities for their children. For example, parents can see how much children spend and give their advisory on some activities. There will be no chance that parents would see different activities from what their children are actually doing.

Environmental and ecology
To stop making banknotes, coins are very economically justified as well as environmentally justified. Scientists always introduce a new way to cut cost of making bills and coins (eg. changing material, cut down size) while adding new features (eg. embedded watermark, or putting new printing technology) to avoid counterfeits. This will not be the case in the future as money goes electronically. There will have no public concerns on environmental or anything that would impact ecology. A small circuit attached to plastic cards is cheaper, more durable, more hygienic (less physical touch) and more environmentally friendly when disposal.