“I think the biggest force in recent changes to money is the computer revolution,” Rivest said. “Payments are becoming electronic.”
Dr. Ron Rivest, a Computer Science Professor at MIT founded a “micropayment” firm called Peppercoin. Micropayments allow for tiny transactions — fractions of a dollar — to be accounted for in large, manageable ways. A music download could cost a micropayment of 25 cents, for instance.
But banks and individuals would be overwhelmed in trying to account for so many tiny transactions, Rivest said. Micropayments allow a bank to simply “see” such transactions in lump sums. Likewise, the consumer will “see” that he’s spent $40 this month — and not have to account for 160 tiny charges.
“The technology, in short, is a more sustainable model for commerce over the Web,” Rivest said.
Rivest said that considering that credit cards weren’t even in use until a few decades ago, the Information Age has brought about relatively speedy changes in money.
Online banking and commerce, and ATMs are just a few examples of money advance that seemed like science fiction just a generation ago.