Amazing Kids! Magazine

Invisible Money

By Gen L’Esperance, Sci-Tech Kids! Columnist

 

A long time ago, and still in some countries today, the dollar and penny did not even exist. In fact trading a cow for two pigs is still the norm for many cultures.

So how is it that we get to use paper and coins?

The biggest challenge for ancient cultures was to have a system that would allow people to exchange products with each other. However, the problem arose when one person was in need of something immediately that they didn’t have a product to trade. For example, a farmer that needed wheat only had fruit to exchange but the fruit wasn’t ready to hand over for another 2 months. This is what started the idea of a “common currency.” The farmer could buy what he needed with “currency” and just as important, the value of the goods he was exchanging was standardized. He did not have to worry about giving anything in return now or later; his transaction was complete.  Thus “money” was born.

Over time, each country has developed its own currency and something that might cost a $1,000,000 lire in one country might be 1 dollar in U.S. currency.  Most countries also frequently use powerful political people as the “face” of its currency. The U.S. currency is the best example of this. Can you name all the presidents that currently appear on not only on paper money but also coins as well?

The real excitement however is the future of how we buy things.  People have started to use debit cards that are like credit cards but allow you to pay using your bank account rather than cash. That has given way to something called Mondex. Mondex allows you to “wave” your card past any special device that can read these cards. You no longer have to insert, swipe and then punch in numbers, which could cause security problems. The Mondex system started its testing in eastern Canada and now other companies like Shell have used it to allow people to pay for gas using the same methodology.

Another step into the future is touch screens with finger print recognition. You will put your thumb against a screen, the system will identify you and with a specified amount of money in your digital wallet (an amount you select) and you will head off for an ice cream or your favorite book and only need to make sure you have clean fingers to finish the transaction J

But wait the future is actually going backwards. Yes backwards!

Many businesses are going back to barter! So they will “sell” you their product in exchange for allowing them to advertise on your web site. Need a book. Send them your old ones.

Money is really what we want it to be and what value we put on something. In fact, it is digital technology that is allowing you to decide how and in what way you will not only pay for something but also give it your own value.

The new world of money will be exchanging goods not only based on currency but trust and new forms of social life. Currency is going to change and take on more digital models because we are a technology driven generation. Therefore banks are going to take on completely new meaning as we take more control on how we go about trading and even more so, about whom we choose to buy from.

 

For more on the future of money:

http://vimeo.com/16025167

http://www.wired.com/magazine/2010/02/ff_futureofmoney/all/1

http://projects.exeter.ac.uk/RDavies/arian/emoneyfaq.html