The E-Sylum:  Volume 11, Number 1, January 6, 2008, Article 21


[On New Year's Eve David Kranz of Numismatic News posted
a blog entry discussing an article from Forbes magazine
suggesting that the same scanners that read prices in stores
could process "home-printed money" as well. Nick Graver also
noticed the article.  He writes: "Two authors (Ian Ayres &
Barry Nalebuff) advocate printing 'money' at home on the
computer, which then is used for 'one-time' payment of a
purchase."  Here are some excerpts from the Forbes article.

The U.S. Treasury makes money the old-fashioned way, by
printing it. While greenbacks have lots of positives, we
think the Treasury should let others get into the business
of issuing money. If people could do it themselves, the
result would be an even better currency. That's right. Why
not print money at home on your laser printer rather than
go to the ATM? Today, we can do this with stamps; the
illustration shows postage produced by Security
doesn't have to come from the Crane paper stock, the engraving
or a metal strip inside the note. It could come from a
two-dimensional bar code.

When you give your money to the merchant, the merchant would
scan it to ensure that the note is valid. After the scan
the merchant can then just throw your cash away. No need
for Brink's trucks and security. The scan could accomplish
the transfer of balance. In essence, you would have single-use
money or a single-use debit card.

There are several ways in which bar-code money beats
dead-president money. For starters, if you lose your
wallet, you could cancel the notes and get a refund. In
addition, your cash could be earning interest. When you
go to print cash, money would be taken out of your bank
account and cached in an escrow account. Until the money
is spent, you could be credited with interest.

Just as people buy custom ringtones for their phones, you
would be able to buy custom images for your cash. Indeed,
you could even spend money with your picture in place of
Andrew Jackson's. Citibank puts your picture on credit
cards. Why not have your picture on cash?

We are already close to making this work. Most stores have
scanners to read price tags. The same scanners could read
your notes. You might still need old-fashioned currency to
pay taxis or newsstands, so our proposal makes more sense
for eliminating $20, $50 and $100 bills. Telephone calling
cards are essentially cash in the form of a PIN code. Here
the PIN would be printed on the note. Single-use credit
card numbers are essentially a way of printing your own

It is worth emphasizing that what we propose is not a return
to the free-currency chaos of the 19th century, when banks
issued notes backed sometimes by gold and sometimes by nothing
but hopes. The bar-code notes would be backed by genuine U.S.
Treasury dollars. When you print your note, your money is put
aside until the note is cashed.

To read the complete article, see:
Full Story

To read "We can do it with stamps, why not currency?" by David Kranz', see:
Full Story

  Wayne Homren, Editor

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