How large can the flow of money on the nets get before the government requires reporting of every small transaction? Because if the flows can get large enough, past some threshold, then there might be enough aggregate money to provide an economic incentive for transnational service to issue money, and it wouldn’t matter what one government does … It might also be the case that anonymous money will be the only kind of money.
Predictor: Hughes, Eric
Prediction, in context:In his 1994 book “Out of Control: The New Biology of Machines, Social Systems and the Economic World,” Kevin Kelly, editor of Wired magazine, quotes cypherpunk Eric Hughes, writing: ”Eric Hughes, maintainer of the cypherpunks’ mailing list, says, ‘The Really Big Question is, how large can the flow of money on the nets get before the government requires reporting of every small transaction? Because if the flows can get large enough, past some threshold, then there might be enough aggregate money to provide an economic incentive for transnational service to issue money, and it wouldn’t matter what one government does.’ Hughes envisions multiple outlets for electronic money springing up all over the global net. The vendors would act like traveler’s check companies. They would issue e-money for, say, a 1 percent surcharge … But somewhere on the global Net, underwire economies would dawn, perhaps sponsored by the governments of struggling developing countries. Like the Swiss banks of old, these digital banks would offer unreported transactions. Paying in online Nigerian nairas from a house in Connecticut would be no more difficult than using U.S. dollars. ‘The interesting market experiment,’ Hughes says, ‘is to see what the difference in the charge for anonymous money is, once the market equalizes. I bet it’ll be on the order of 1-3 percent higher, with an upper limit of about 10 percent. That amount will be the first real measure of what financial privacy is worth. It might also be the case that anonymous money will be the only kind of money.'”
Biography:Eric Hughes co-founded the Cypherpunks with John Gilmore and Tim May. This group included cryptographers, privacy advocates and digital anarchists. They were known for a densely written e-mail list generating megabytes of issue-oriented scientific discussion weekly. He was the author of the Cypherpunk Manifesto. (Research Scientist/Illuminator.)
Date of prediction: January 1, 1994
Topic of prediction: Economic structures
Subtopic: E-commerce
Name of publication: Out of Control: The New Biology of Machines, Social Systems, and the Economic World
Title, headline, chapter name: E-Money
Quote Type: Direct quote
Page number or URL of document at time of study:
Page 228
This data was logged into the Elon/Pew Predictions Database by: Garrison, Betty