Your Money Will Be Digital. Will It Be Smart?

Your Money Will Be Digital. Will It Be Smart?

It's fun to watch young children learn to handle cash by buying an ice cream and giving us back the change. But there will be nothing adorable about being surrounded by machines that need equally patient hand-holding when it comes to using money, like making sure our refrigerator stocks up the right vegetables in correct quantities before it pays the delivery robot.

Doing this every day with each of our 15 online devices will mean we do nothing else in our internet-of-things future.

The conventional financial system will be of little help. Banks can clear fast payments. With the backing of the legal system, intermediaries can make our appliances honor and enforce obligations.

However, when it comes to making payments that are contingent upon the delivery of a product, service or asset, the existing technology will become overwhelmed when everything gets connected.

That's where smart, or programmable, money comes in. Lines of cryptographic code, running on a distributed ledger technology such as the Ethereum blockchain, will calculate the right payment amount, and come embedded with conditions for a transfer of value from one party to another. The money itself will contain these capabilities, and we don't need to look very far to see who