Feature

Why we need smart currency

The rise of virtual currencies such as Bitcoin may already mark “a turning point in the history of money.”

Kevin ManeyNewsweek

We may be witnessing “the end of dumb money,” said Kevin Maney. While virtual currencies such as Bitcoin now amount to “barely a pimple on the global economy’s back end,” with a collective value of less than $15 billion, the rise of cybercurrency may already mark “a turning point in the history of money.” New technologies that make it easier and cheaper to store information on smaller platforms are exposing the fatal drawbacks of the dollar bill, which “has no smarts at all—it doesn’t know what it is, where it’s been, or where it’s going.” Credit cards—“rectangles of plastic with numbers on them”—are little better, as recent hacking episodes prove. Bitcoin and other innovations augur the day when we’ll have currency that is directly embedded with information and security features. Whether you hold it as a card or a chip, or in a ring on your finger, digital currency “would know who you are”—and only you could spend it. Switching to a smarter form of money won’t happen overnight—“progress comes in fits and starts.” But there’s a reason startups like PayPal and Square keep coming up with new ways to pay: “The dumb-money era needs to end, and there is new ground to break.”

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