Blockchain

Physical Tender May Soon Be a Thing of The Past

Well, not quite – but wouldn’t that be convenient?  All too often I find myself plagued by the fragile pieces of paper we assign so much importance to. I guess Wu-Tang was right – cash rules everything around me. So why, in an age where almost anything you can think of has a digital counterpart or replacement, is physical cash still such a prevalent thing? Its actual value is ethereal, so wouldn’t it be more efficient to have a currency based in a non-physical space. Well, according to certain sources, IBM seems to be on a similar page.

Reuters reported that International Business Machines Corp (IBM) is looking to adopt the concept behind the popular crypto currency Bitcoin. This concept, known as “blockchain”, is a ledger (or list) of all of a digital currency’s transactions. Bitcoin utilized this to allow users to make payments instantly and anonymously, without government regulation. Rather than stored on a separate server and controlled by one individual or entity, the ledger is accessible to all participants in the Bitcoin network. IBM’s objective is to allow for cash transfers & payments to be made instantaneously, without the involvement of a bank or clearing party. The transactions would be in an open ledger for a specific country’s currency.

Here is an illustration highlighting blockchain as a concept:

ibm blockchain

If this project does come to fruition, it promises to bring many conveniences that improve on the flaws of physical tender. Paper money is dirty, easily destroyed, and can take up a lot of space. The hubris accompanied by the tearing of that valuable moolah through a simple twitch or movement is heart breaking. Physical money is also easily stolen. The only thing keeping that wad of paper happiness in your pocket from a malicious delinquent is your wallet and ­– well– you.  Not only would IBM’s solution be more cost effective for all parties involved, it would also provide an cure to the problems with physical cash that haunt us on a daily basis.

"When somebody wants to transact in the system, instead of you trying to acquire a Bitcoin, you simply say, here are some U.S. dollars," the source said. "It's sort of a Bitcoin but without the Bitcoin… These coins will be part of the money supply," the source said. "It's the same money, just not a dollar bill with a serial number on it, but a token that sits on this blockchain."

IBM has been in informal discussions with multiple central banks about the possibility of a blockchain cash system, one of them being [unofficially] the U.S. Federal Reserve. Theoretically, the banks would act as a sort-of  ‘overseers’ for an open ledger viewable by everyone in the system, and transactions would be made through an agreed-upon process. Users would be able to access this through a linked bank account and possibly a wallet application. IBM would handle the creation of a secure and scalable infrastructure for this system.

The project is still in its early development stages and bound to change. Money-laundering and criminal activities are also a possible issue, but solutions for these will most likely be found before any public implementation.

(Sources: Reuters; IBM)

Ocean

Ocean is studying Journalism, International Studies, and Japanese at the University of North Carolina at Charlotte. He is very interested in East Asian history and Pop-Cutlure, particularly concerning Korea, India, and Japan. Ocean has great interest in a vast range of technologies and enjoys reading up on cutting edge developments in his free time.

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