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A talk about the five ages of money and why the mobile phone is the distruptive agent that will move us from Money 4.0 to Money 5.0
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The Five Ages of Money
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We can identify four distinct ages in the history of money. Perhaps technological change is now pushing us into a fifth
CopenhagenFinance IT Region
The Fifth Element…
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The Five Eras of Money
■ From 1.0 to, yes, 5.0
Money 5.0
■ What does it mean?
The Ages of Money
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Money is a unit of account, a means of exchange, a store of value and a mechanism for deferred payment
Money—A Brief History
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The First Age: Atoms
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Eliminating the “double coincidence of wants”
■ Money increases the efficiency of trade
Lots of things can be money
■ Lumps of stone
■ Iron tools
■ Copper ingots
Some things work better than others
■ Gold, silver and a few other things
Some Atoms
Standardisation supported trade and growth
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The Second Age: Atoms about Atoms
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Moving things around is a hassle
■ Collective memory
■ Grain stores
■ Goldsmiths
Move the claim, not the land
■ The invention of central banking
Some Atoms about Atoms
Monetising the stores of value
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Third Age: Bits about Atoms
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One of the first uses of the telegraph
■ The first electronic funds transfers
■ Money faster than a horse or a train
Telegraph traffic peaked in 1929
■ Telegrams ended in 2007
■ But Western Union is still around
People were transferring £, $, Dm, ¥…
■ But they were all backed with gold and silver
Some Bits about Atoms
Ideas born in this era still shape our thinking
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Fourth Age: Bits about Bits
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The rise of the fiat currency
All money is e-money
■ Well, almost (97.3% in the UK)
■ That e-money is a “promise to pay”
The means of exchange is evolving
■ We all know it’s going mobile
■ Remote control for “wallet in the cloud”
Moving away from fiat currencies?
■ Kivas
■ Goldmoney
Some Bits about Bits
It will be the mobile phone that ends cash
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A Fifth Age? Bits
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Money is about to change again
■ It may become truly virtual, bits and nothing more
What kinds of bits?
■ World of Warcraft gold pieces?
■ Facebook credits?
■ Reputations?
Bitcoin
■ Digital mining
Some Bits
Zynga had revenues of $850m last year
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Where Next?
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Maybe using notes and coins will be like drinking and driving – it will still go on, but nice people won’t do it
Just One Example
Winner of the “smart banknote” design 2011
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Thank You
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Any (More) Questions?
Tomorrow’s Transactions:thought leadership from Consult Hyperion
Read www.chyp.com/media/blogListen www.chyp.com/media/podcastsVisit www.chyp.comContact [email protected] @chyppings
Contact Details
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Dave BirchDirectorConsult Hyperion
[email protected] @dgwbirch