A reporter recently asked me about how people are “using cashless systems like Apple Pay, Google Pay, and cryptocurrency.” It caused me to remember how many people don’t understand how different crypto is and how “same” Apple Pay is.
Apple pay, google pay, and the like are central systems with central processing, tracking payments, vendors, and customers and require the user to access the banking system to participate. Those who can’t access the banking system can’t use these systems (difficulties arise if you don’t have a permanent address, are poor, or were born in the wrong country (Iran, Syria, etc.)). Think of it like a MasterCard without the card.
Cryptocurrency is like cash in that everyone has access to it, a central authority does not approve the transactions, and the privacy of transactions can be insured. But unlike cash (US dollars, Costa Rican colónes, or euros), cryptocurrency is not issued by a central authority. It is one of several rising decentralized applications that are “post-national.” Some have used the term “the internet of money” to describe the decentralized nature of cryptocurrency.
There is a major divide in the world of digital payment systems. In the US and Europe, we have a stable and reliable banking system, so Apply pay and the like work for many people. Many other countries do not have a reliable banking system and have corrupt governments, so they prefer to have an alternative currency. A digital form of money not controlled by any state is attractive and can be managed from a mobile device.
So while the US may be moving to a cashless version of a government-issued currency, much of the world is looking to skip forward to cryptocurrency.
J. Scott Christianson is a technologist and an Associate Teaching Professor of management at the Trulaske College of Business, where his interests are focused on the impact of technology on society. You can connect with him on his website, LinkedIn, Twitter, or by following his newsletter, The Free-Range Technologist.