Support Media Mixed media: When several media are used for the same currency, this
provides of course maximum flexibility. The historical evolution of conventional
money has traced a logical sequence towards more convenience: one started
with physical commodity money (such as precious metal coins used to be); but
now it is more convenient to handle paper receipts with promises to pay that
physical commodity (“I will pay to the bearer the sum of one Pound Sterling” is
still written on the English currency bills). And of course, if the appropriate
technological infrastructure is available electronic bits are even cheaper to move
around than paper currency. The same currency can and often does take
different forms depending on the media that supports it. For instance, national
currency takes many forms: electronic bits, paper, or coins.
The advantages and disadvantages of each of these media are relatively
straightforward.
Commodity currencies have as advantage that one doesn’t need a lot of social
or legal infrastructure to make them work – it is the only currency that can
operate in extreme circumstances such as civil war, social or economic chaos.
Such “currency” can be literally consumed directly by the recipient as a last
resort, and it is also most impervious to counterfeiting. Its inconvenience is also
clear: limited flexibility to create it; and it can be inconvenient to store, handle and
transport as well.
Paper currencies in contrast are among the easiest to handle, and are cheap to
produce. But they have as downside that they can also more easily be
counterfeited. With today’s high quality photocopying equipment available to
almost anybody, security is a perpetual issue for paper currencies. Even for
complementary currencies, this issue needs to be addressed as soon at they
become successful enough to make it worthwhile for someone to counterfeit
them.
Electronic media are fairly familiar by now. PCs are the most common support
for small to medium-sized complementary currency systems, and are satisfactory
if one has access to phones and other communication means to convey the
information to the person handling the PC. Their downside is that such an
approach tends to require a labor intensive way to process the transactions.
Internet connections in which the users update their own transactions reduce the
cost of overhead, but create additional risks for fraud, and not everybody has an
easy access to a computer. Smartcards combine the advantages of both, but
require readers that are both expensive and not commonly found anywhere but
Europe and Japan at this point. The best electronic solution would be to have the
complementary currency piggy-back on another smartcard application, such as a
public transport or a bank-smartcard. That way the marginal cost of adding the
complementary currency application becomes very reasonable.
Mixed media is of course the ideal, because one can tailor the advantages of
each form to whatever the specific application of the currency. But as a
downside one should remember that particularly from a security viewpoint,
whatever the weakest media is ends up also as the weakest link of the entire
chain.
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