The E-Sylum:  Volume 11, Number 13, March 30, 2008, Article 27

INDUSTRY COALITION ANNOUNCES NEW PAYMENT TECHNOLOGY

It hasn't hit the mainstream papers yet, but a group of
technology companies is circulating a proposal that could
solve a number of sticky problems relating to electronic
payments and revolutionize the way money and even coinage
is used.  Working groups from such diverse organizations
as Apple, eBay, Google, Linden Labs, MIT's Lincoln Laboratory,
Mastercard, Bank of America, the Federal Reserve Bank of New
York and the U.S. Treasury spent months working out the
details of a highly secure, privacy-protected national
(and someday international) electronic payment mechanism.

Why eBay? Because eBay owns PayPal, the most successful
online payment company.  PayPal technology links credit
card accounts to email, allowing shoppers to pay for online
purchases (such as eBay auctions) with the click of a mouse.

Why Linden Labs?  Because Linden owns and operates Second
Life, the most successful "virtual world", a kind of game
where players mimic real life - buying and selling virtual
real estate, holding down virtual jobs, and creating online
businesses.  Second Life residents use "Linden Dollars", a
virtual currency that is actually convertible to and from
real U.S. dollars.

Why Lincoln Laboratory?  For over half a century Lincoln Labs
has been at the forefront of computing and defense technology.
Lincoln built the DEW Line (Distant Early Warning), a radar
surveillance system protecting the U.S. borders from missile
attacks.

Working with other key partners worldwide, the core group of
researchers, computer scientists, engineers, bankers and
economists and have designed a new system to cleanly integrate
all manner of electronic payments and accounting systems.  The
interesting part of this for numismatists is how the system
would integrate banknotes and even coins.  The quotes to follow
are extracted from a .pdf copy of the proposal my boss received
last week.

"We reached an epiphany early in our brainstorming sessions
when we realized just how much people distrust electronic
money.  Although we use it all the time, we never feel completely
comfortable.  There's just something about the feel of a physical
object," said Marissa Mayer, Google's Product Manager and
spokesperson for the group.

"So what we came up with is a bit of a throwback, but one with
a complete update for the 21st century," she continued.  Instead
of carrying a walletfull of credit/debit cards and having to
remember dozens of different passwords or PIN codes for our
accounts, we would carry a pocketful of special new coins which
(using a highly secure data protocol) would know who we are and
link seamlessly to our accounts.  Developed by Lincoln Labs
scientists, these new universal coins will be called UbiquiCoins
(or Quoins for short).

The obverse of the Quoins would carry the standard official
Federal emblems and insignia, but in another throwback will
also include the name of an issuing institution, such as your
local bank or credit card company - not unlike the old National
Bank notes.  This private-issue connection made me think
immediately of Liberty Dollar proponent Bernard von NotHaus.
I reached him on his cell phone, and he's intrigued with the
idea.  We both had a laugh at the thought, though - it's not
likely that the Fed would allow it, but Bernie's going to talk
to his bank about issuing a Liberty-dollar affinity Visa card.

The reverse side of many Quoins would carry Federal emblems,
but commercial and personal images would be permitted, as long
as they fall within FCC decency standards.  The commercial part
is where Google comes in.  Like John Gault, who sold advertising
on the back of his encased postage stamps in the Civil War,
Google will sell ads on the back of Quoins, splitting revenue
with both the government and individuals.

"It's a win-win-win for all parties," said Marissa Mayer.
"Individuals basically get a small rebate for every coin they
use, and the government gets funds to help support the
infrastructure.  And course, business is helped by getting
their message out to the right people at the right time."
I can see it now - you're about to drop a coin in a vending
machine and an ad appears: "Buy Coke!  Here's a 10-cent-off
coupon!"

Individuals could opt out of the program and in fact, could
program their Quoins to display personalized images or photos
on the reverse.  Check-printing companies will get into the
game with web sites that allow bank customers to choose from
galleries of standard designs or create their own.  A member
of one of the focus groups testing the product already had
an idea: "My Quoins will show Mt. Rushmore, only the faces
will be me, my wife and our two kids."

Ubiquicoins could be used anywhere, for anything.  They
display a nominal denomination just like coins today, but
they're more versatile.  Suppose you want to buy a 50-cent
can of Pepsi from a vending machine.  Drop in a $1.00 Ubiquicoin,
and watch it slide down a clear chute.  It comes right back to
you in the coin return, only now it's a half dollar.  The design
and value change before your eyes.

"We liked this feature so much we installed vending machines
in one building at our Mountain View campus.  It's weird - food
and soft drinks are free for Google employees, but so many people
used the machines instead that we made over $2,500 in a week."

Environmentalists like the feature too, reckoning that by
immediately recycling coins over 35 million tons of carbon
emissions would be saved annually because vending machine
operators and banks no longer have to transport and count
coins.  Al Gore claims to have invented the feature.

They also have a sort of overdraft feature, so you never have
to run out of coins as long as you have money in the bank.
Need to pay a toll?  Just drop in one of your coins.  If there's
any leftover money on the coin it will be deposited in your
account.  If you're short, your account would be debited for
the difference.  What could be easier?

All manner of electronic devices would be outfitted with
"Quoin slots" to accept payments.  Buying on eBay?  Just
pump your coins thru a slot on the side of your computer.
Daughter running low on her wireless minutes?  A friendly
voice chimes in saying "Deposit 50 cents for the next three
minutes.  Please deposit 50 cents."   She would have to stick
a coin in the slot on the side of her cell phone, just like
it were an old-fashioned pay phone.

"This back-to-the-future stuff is so retro it's cool," said
another member of a focus group testing the product.  "And
they've thought of everything - they're even waterproof so
you can toss them in a fountain."  The coins actually shimmer
MORE underwater.

U.S. Mint Director Ed Moy practically beams at the prospect.
"I'm so sick of talking about the high cost of metal.  We're
hoping to shut down all our facilities and outsource
manufacturing to my cousin's semiconductor fabrication plant
in Taiwan."

But the Mint isn't going out of business. The creative work
would go on.  The Mint's coin designers would have their hands
full dreaming up commemorative and custom designs for all these
new coins.  "We don't get our hands dirty with engraving tools
anymore anyhow," said Sculptor-Engraver John Mercanti.  "All
my folks use computers now, so I thought, what the heck."
Mercanti's team would relocate to rented office space elsewhere
in Philadelphia.  I understand negotiations are underway to
sell the building to an electrical supply company.

And what about the Bureau of Engraving and Printing?  They'll
shut down production, too.  High-denomination Quoins eliminate
the need for paper.  This could to save another 48.3 million
tons of carbon emissions annually.

Director Larry R. Felix emphasized that the security and
anti-counterfeiting goals of the Treasury Department would
remain the same - "Our engineers are the best in the world at
what they do, and have always adapted to changing technologies.
Being one step ahead of the counterfeiters is our only mission.
With these innovations, we figure we'll be at least one and
three-eighths steps ahead."

  Wayne Homren, Editor

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