Do you still have cash in your wallet? Almost all of our payments are now made digitally. Large household wallets are a thing of the past, small ones for just your cards are the future. Moderator Desiree Hoving spoke to three experts about the disappearance of cash, taking control of your banking and the rise of cryptocurrencies such as bitcoins.
During NEMO Kennislink Live, scientists talk about current developments in their domain in an accessible way. They deal with topics that affect our daily lives. In 2018 the overarching theme is:'Everything under control'.
Read more about NEMO Kennislink Live.
The music of street musician Deniz Kavafoglu welcomes the slowly trickling visitors of the NEMO Kennislink Live evening. The sound of his handpan echoes through the hall of NEMO Science Museum, attracting people even outside. You can donate a small amount, both in cash or via pin – matching the theme of the evening.
It is striking that almost everyone does this with cash. Especially when it turns out later that only half of the room has coins and bills in their pockets and some don't even have a physical wallet anymore. Is cash getting rarer?
According to the first speaker of the evening, economic historian Oscar Gelderblom, we did everything in cash about sixty years ago. Back then, at the end of the month, you still got a pay packet to take home with you, while now everything comes in very conveniently into your bank account.
“A hundred years ago, almost everyone had almost nothing,” says Gelderblom. You kept all the money you had then. With the growth of the economy we became richer and we no longer needed all our money for primary needs.
Emergence of the banks
Banks took advantage of this and started offering us savings accounts. Gelderblom explains:“Paying, saving, borrowing, insurance:those four things people have always had to do. Also in the time for banks.” In the 1960s you bought a loaf of bread at the bakery, now you take out a loan from the bank at a considerable interest rate.
The better the economy went, the more money we started to bring to these banks and the bigger the banks became. In addition to savings accounts, they now also offered us loans and mortgages with interest, so that they could actually earn money from us.
But, emphasizes Gelderblom, it is of course nice that you do not have to visit Ziggo, Achmea or your landlord with a large bag of money every month, and that this all happens automatically. We have been using little cash for years, almost everything can be arranged through the bank. Does this mean that coins and bills will eventually disappear completely and payments will only go through banks?
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Alternative money?
But not only cash is under pressure. With the rise of cryptocurrencies, a good alternative may also have emerged for digital money. About ten years ago, the first cryptocurrency was designed:the bitcoin . The idea behind it was to bypass the central party, the bank, and arrange everything through an independent network. This would give banks less power and control over our money.
Everyone in the room has heard of this alternative money before and a small number are even proud owners of cryptocurrencies, including our second speaker of the evening, Anna Berlee. Berlee is an assistant professor in private law at Utrecht University and conducts research into cryptocurrencies and the technology behind it.
At the moment we cannot call the cryptocurrency real money, explains Anna Berlee. “Now it's just speculation, it's not a means of payment, but more of an investment vehicle,” she says. Money can be divided in different ways:cash in your wallet and money in your bank account. Cryptocurrency does not fall under any of these categories, so we cannot legally call it money.
Money is communication
Rob van Hilten, founder and director of Qoin, has already devised more than sixty different money and payment systems other than the euro in Europe. According to him, it doesn't matter that you can't officially call bitcoin money. “Money is about communication. You can use different media for this:the whole of calling, e-mailing and tweeting ensures that I communicate. The idea that you only use the euro for money communication is very specific,” says Van Hilten.
According to him, more payment systems are needed for good communication than just the official euro. This is all about resilience. If one system goes down, another system can take over. In addition, it gives you the opportunity to use the system that you like. If you look around you, there have always been more systems than just the euro:babysitting, doing something for your neighbors, helping children with something. All services for which you ultimately get something else in return and which are therefore an addition to our regular money system.
Control
After the speakers' stories, there is room for discussion, in which the mini quiz that was held at the beginning of the evening is discussed again. The biggest point of discussion starts with the last statement of this mini quiz:'We have less control over our wallets than we used to.' What exactly is 'control'? Is control knowing how much money you have? Do you keep track of everything yourself? Or just consciously working on it?
It is striking that the public is very suspicious of large tech companies and fintech. According to a large majority of the audience, apps like Tikkie and the recently adopted PSD2 are giving us less control over our wallets. -law. Especially the fact that you have no say in what exactly a bank does with money, is not really transparent about it and the lack of options, gives the feeling that you have little control.
At the same time, we have more opportunities than ever before to take control. The public is right to say that we currently have a very good financial infrastructure where you can easily move thousands of euros, buy products on the other side of the world via PayPal, via crowdfunding can set up a company, open web shops, and so on, we could go on and on. The possibilities are endless, but the average Dutch person has too little knowledge about the new technologies to be able to use them properly.
No more cash?
Current technologies therefore bring new possibilities in the field of payments and payment traffic, which means that you can take a lot of control. However, these new possibilities also make everything less clear and difficult to understand for the general public, so that the feeling of less control prevails. It may be a little trickier, but the possibilities for control are endless. In this way, new technologies bring with them both more and less control. Something that both speakers and audience agree on.
Goes cold hard cash then eventually disappear in the future? According to Gelderblom, this will not happen so quickly:“When you see that it has existed for so long, always next to other systems… It remains a partial solution:it will never disappear, it will never grow again”. Part of the payments always remains in cash, without the intervention of the bank.
Money is not only a virtual means of payment, the physical aspect is also very important:it makes 'value' tangible. Let's face it:sticking supermarket stamps for a pan set makes you much happier than if you have to save this together via an app? And a hundred dollar bill in your wallet really does give a different feeling than a hundred euros in your bank account.