Money and the internet

Money and the Internet                                                                                     Anissa ENNOUHI

                                                                                                                                        17/11/2017

Detailed Plan

Introduction:

To introduce the topic, here is a quote of the book The future of money in the information age.

“The information revolution has narrowed space and time but has broadened freedom and commerce.”

In this presentation, the goal of the analysis is to show the development of the various forms of money, of the multiple markets through Internet, and to demonstrate how money has been modernized and adapted to a new social and economic model this lasts decades. The aim of the presentation is to demonstrate how internet became a tool, a real platform opening new possibilities and creating new dimensions of money in the global economy. In the book The future of money in the information age, that is quiet old (date: 2001), it is explained that the basis of the new monetary universe is sand rather than paper—a computer chip rather than a Federal Reserve note. The advent of e-money offers the possibility of privatizing the supply of currency, paying interest on small deposits, and making offshore banking accessible to many individuals. In the future, government fiat money may disappear as people choose to hold digital money issued by private firms rather than non-interest-bearing paper money issued by central banks.

So we are going to see the role of Internet in the worldwide commerce has become enormous.

The problematic we are going to tackle with in this presentation is the following: In what extent can we consider that the Internet paves the way for new social practices involving money?

1. The Internet era: how new forms of money are appearing
2. The issues faced in the development of a new economic model

1. The Internet era: how new forms of money are appearing

1. The new role of money: a different relation to money is emerging through Internet

On the Internet, markets are ruled without the permanent control of the state that was omnipresent in the traditional exchanges and in the economic model we have known in the 20th century. It drives to a detachment of the economic domain and the political domain. Nowadays, most markets are independent. This independence represents a necessity to rethink the support of economic exchanges and to adapt it to a more complex system, to make it adaptable to various needs.  

When hearing or reading the terms of "the new payment technologies" and "digital money" it is well to maintain some historical perspective. What exactly is new, and what difference will it make? Is the coming change in the payments system revolutionary, or better understood as evolutionary?

The world’s financial difficulties today arise mainly from our failure to recognize the true nature of money. We still think of it as something substantial, as a thing to be created, exchanged, borrowed, and accumulated–an object of speculation and gain. In reality, money is just an accounting system. Once recognized as such, it will be an instrument of power used to exploit the powerless. Nowadays, even our personal information are becoming goods that are valuable and that have a real economic potential.

To describe this phenomenon, Thomas Greco, an American community economist, involved a theory.  

The aim of his work is to propose: “that businesses take the initiative and do it themselves, establishing a federation of cooperative credit clearing exchanges, and adopting an objective, non-political, universal unit of account. Doing this will change everything–for the better.” Internet in general (and mobile Internet in particular with wireless devices) brought news ways to trade, transfer, pay, earn and store money.

1. New supports of economic exchanges through Internet: an adaptation to the social organisation

Nowadays, new forms of payment are emerging and taking an important place in our economy. The market is enough developed to cite examples of tools.

PayPal enables the customer to facilitate the P2P (person to person) system and is operating a worldwide online payments system that supports online money transfers and serves as an electronic alternative to traditional paper methods like checks and money orders. Exchanges are faster than ever, you can instantly send money to anyone, you protect your bank accounts with an intermediary, and the service is free.

With a facilitated access to payment with internet, is it possible for our societies to become cashless? In Sweden, it’s already almost the case. According to central bank the Riksbank, cash transactions made up barely 2% of the value of all payments made in Sweden in 2015 – a figure some see dropping to 0.5% by 2020. In shops, cash is now used for barely 20% of transactions, half the number five years ago, and way below the global average of 75%. Adopted by nearly half the Swedish population, Swish, an application to use on a cell-phone, is now used to make more than 9 million payments a month.

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