Negroponte says Internet could make cash obsolete
By Stannie Holt
InfoWorld Electric
infoworld.com
Posted at 2:03 PM PT, May 18, 1998
SAN DIEGO -- Internet commerce is a gathering tidal wave that could totally reshape the
world economy within a few years, according to technology pundit Nicholas Negroponte,
director of the Media Lab at the Massachusetts Institute of Technology, in Boston.
Not only could smart cards replace cash, even for transactions as small as a pack of gum,
computers could turn a handshake into a financial transaction, save books but kill
bookstores, and spare you from ever wondering if you've got milk, Negroponte said.
Negroponte, giving the keynote address Sunday night at the Oracle Applications User Group convention here, scoffed at U.S. government predictions that I-commerce will reach $327 billion per year worldwide by the year 2002. Cisco Systems alone is already doing $3.5 billion per year, he pointed out.
"I think $1 trillion a year by 2000 is modest," Negroponte predicted.
But before I-commerce becomes that extensive, consumers must overcome two barriers,
security and payment systems, Negroponte said.
Security is mostly a regulatory issue, since very strong encryption technology already
exists, Negroponte said. Regulations banning the strongest encryption from being used in
certain countries are "unbelievably silly, because terrorists and drug dealers aren't waiting
for FedEx to deliver a disk to Libya or Colombia."
So, Negroponte reasoned, honest citizens might as well get the same kind of protection,
and buy, sell, and make donations as anonymously online as they can with cash.
Encryption could also help crack the other barrier -- to make transactions as fast and
cheap with credit as with cash -- so that it could become cost-effective to bill a nickel or
dime electronically, Negroponte said.
Microcash transactions "will change consumer behavior enormously," Negroponte said.
For one thing, readers might be more willing to pay for content if they only had to pay a few cents for each article that interested them. [djane notes this will kill me....] Shopping for groceries and other necessities via the Web might also become more common. [and would alleviate the need to ever leave your home...]
I-commerce is already flexing its muscles, Negroponte said. On one hand, it is giving
consumers more power by broadening their choices and letting them band together, for
example, by pooling car purchases to get a fleet discount.
On the other hand, it's killing off such traditional businesses as car dealerships, department
stores, and bookstores, turning them into mere showrooms to tempt online shoppers,
Negroponte said. And it could wipe out jobs for all kinds of middlemen in the retail and
credit industries, such as accountants, data processors, and store clerks.
The future of I-commerce will depend strongly on enterprise IT users such as the Oracle
Applications convention-goers, Negroponte said. In the future, whether they deal in
information or physical goods, "you'd be plumb crazy to put an invoice in the mail and put
on a 32-cent stamp, not to mention a 33-cent stamp," he said.
In a few years, even "walking around money" could become purely virtual, Negroponte
said. The Media Lab at MIT is working on weaving computer circuits into clothing, using
the body's own electrical currents to transmit information. Instead of getting money from an
automated teller machine by sticking a card in and getting printed pieces of paper out, you
could just press your thumbprint to the screen to get the money downloaded to a
computer in your shoe. Conceivably, you could even transfer money through flesh-to-flesh
contact.
"A colleague of mine said it made him think twice about kissing his wife goodbye in the morning," Negroponte quipped.
Negroponte's predictions were provocative for many in the audience.
"Well, I believe accountants will still exist," said accountant Sue Spriggs of construction
services company Landis & Staefa, in Buffalo Grove, Ill. Otherwise, "it was a wonderful
presentation," she added.
"He was really insightful," said Tony Vecchiet, a database administrator at Xilinx, in San
Jose, Calif. "What I thought was a long way off in the future ... a toy, something nobody
takes seriously... he made me think is not so far off."
"I hope he's wrong," said consultant Peter Plackowski in San Francisco. "Would you want to replace the bazaar of Istanbul, so to speak, with staring at a screen? We'd all be in the house and the drug dealers would be running the streets."
On the other hand, some of Negroponte's predictions seem useful, such as being able to
make more kinds of payments electronically, Plackowski added.
"I found it kind of depressing, actually," said Anne Hartheimer, a database administrator at metals manufacturer Oremet-Wah Chang, in Albany, Ore. "It just seemed like there wasn't any connection between human values ... and gadgets. I think there's a lot more to life than computers."
More information on the Oracle Applications User Group can be found at
oaug.org.
Stannie Holt is an editorial assistant t InfoWorld.
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Please direct your comments to InfoWorld Boston Bureau Chief, Ted Smalley Bowen
Copyright c 1998 InfoWorld Media Group Inc.
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