What’s Going to Happen to Money in the 21st Century?

July 14, 2018 – In the movie “Star Trek: First Contact,” Captain Picard explains to a post-apocalyptic passenger from the 21st century that “money doesn’t exist in the 24th century.” He goes on to describe a society no longer motivated by acquiring wealth but rather free to explore and develop skills to contribute to all of civilization. Is this idyllic statement where human civilization is going? And will it happen in the lifetime of any of you reading this blog posting?

Interesting things have been happening to currency in the 21st century. Once the purview of state actors or corporations set up by governments (think beaver pelts as currency in the Hudson Bay Company), it is now being challenged by the digital realm with cryptocurrencies and, initial coin offerings (ICOs).

Bitcoin, the most well-known cryptocurrency, has risen and fallen with the same speculative hype as that which occurred in the markets of 17th century Holland around, of all things, tulip bulbs. Bitcoin is today’s tulip bulb, an alternate form of exchange and a form of currency that some including members of the U.S. Congress see as in our immediate future.

Will bitcoin or some other unit of exchange replace world currencies?

And if so, will that lead to a uniform global medium of exchange that is different from the current global standard which is the American dollar?

Which would be the better choice for transacting business across the planet?

Although a dollar can be counterfeited and stolen, it is a very recognizable physical unit of exchange that is pegged to every other national currency on the planet. A bitcoin isn’t and rides and falls purely on speculation. Although it is better secured than physical currency through the use of the blockchain universal ledger which tracks and legitimizes each currency transaction, millions of bitcoins have gone astray or been stolen since the cryptocurrency’s inception.

But in the 24th century of Star Trek, all forms of currency have been dispensed with in The United Federation of Planets. There are exceptions. Gold-pressed latinum appears as a unit of exchange used by the Ferengi, members of The Federation. The coining of the name latinum sounds like it has value. Maybe because if you take away the “p” from platinum you have latinum.

Is that the only time we hear of monetary exchanges in Trekonomics? For the most part, because most other exchanges that occur in the science fiction series involve some forms of horse trading. Need a new part, the crew of the Enterprise trade a biological circuit, or a replicator, or something else that can be fabricated on board. And when Star Trek engines need dilithium crystals to go to warp speed, the Enterprise pulls up next to an asteroid where dilithium is being mined and an exchange occurs. There is no currency involved. It just appears that in the 24th century advanced civilizations have reverted to a practice that pre-dates the dawn of currency: barter.

Is the world of Trekonomics really in our future?

Is it likely we will evolve beyond the economic reality of buying and selling and using mediums of exchange to do this?

Maybe the answer to Star Trek’s lack of currency requirements can be found in another of its many astounding technological innovations: the replicator. Gene Roddenberry imagined a device that could replicate anything requested of the ship’s computer system. It seemed that from thin air Captain Picard could get a cup of Earl Grey Tea, hot, which included not just the tea, but the cup, the spoon, a saucer and anything else within the computer’s memory buffer.

Is that kind of technology in our near future?

Some would argue yes. We appear to be dabbling with this in 3D printing. High-speed printers today replicate material designs from digital files stored on computers. We fuel these printers with inks that can be a variety of materials from metals, to polymers, to living cells. The next step in 3D printing is to create objects from the atoms swirling around us. Would we then have Roddenberry’s replicator? We are never told how the replicator works on Star Trek. It’s probably not creating these finished objects from thin air. Likely, if Roddenberry were around to explain it, he would tell us that replicators are really a form of fusion reactor fuelled by a plasma stream coming from the warp technology on the ship.

Peter Diamandis in his book “Abundance” states that we are approaching the age when scarcity will be a thing of the past. Is he predicting a Trekonomics future? No, but he is crystal balling about a future where demonetization occurs for almost every material thing. Demonetization, however, doesn’t mean the end of currency and exchanges. But it does move us in the direction of Picard’s rather interesting 24th-century description of society.

And speaking of Trekonomics, back in March of this year the U.S. House of Representatives released an economics report in which it suggested that bitcoin and cryptocurrencies may replace government-sanctioned dollars as the common means of exchange. It didn’t say when. Entitled “The 2018 Joint Economic Report” it describes how blockchain and cryptocurrencies could become the basis of every type of transaction going forward. So instead of pegging the value of goods and services to dollars, we would be doing it to bitcoins or some other form of sanctioned cryptocurrency.