Hanna Cho's note from the session about the "Virtual Money" at LIFT Asia. The first speaker, David Birch, an economist gave his perspective on the future of digital currency, he was followed by science-fiction writer Bruce Sterling.

So, let's start with Hanna's notes about David Birch's presentation:

"The economy is going cashless. Big technological changes mean big changes in the way money works. To understand the future of money, it's useful to look at the "paleo-future" of money; one example is Edward Bellamy's conceptualizations of things like the first 'credit card'.

Looking forward, we need to understand the way real-life cash works, and what its implications are. Cash imposes the highest transaction costs on the poorest people. Cash costs too much.

For example, think about a 5 pound banknote. Where are those 5 pounds? The note is really an interest-free loan to the British gov't. Hence, the go'vt is happy when the notes are in circulation. Hence, the person who issues the currency, is quite vested in the protection of the printing and circulation of that money. So when we consider that 2/3rds of USD are never going to be repatriated, other US Govt is understandably quite happy. But now, it's changing as euros are replacing dollars as dominant currency of use.

Regional examples in Asia and Africa are illuminating when we think about the future of virtual money. In Asia, there are over 40million mobile wallet users. this has accomplished the important task of opening a mental space for the possibility of using technologies like this, and demonstrating that consumers have no problem using their mobiles instead of money and plastic.

In Latin America, shops have replaced banks as the place where monetary transactions take place.

In Africa, we see that, given the opportunity to use the phone instead of traditional cash modes, people will. Indeed, sending each other, or oneself Kenyan shillings by SMS is extremely commonplace now. Mobile phone minutes become the mode of transferring cash.

So all of this makes me think, an interesting experiment might be to give people completely free choice in how and what kind of currency they utilize, it could inject liquidity and produce

Calling these things real vs. virtual gives me real problems. For example, if the gold standard hasn't been used since 1932, why is it 'virtual' to use WoW gold? What's the difference? This also underlines how the future of money is conceptualized in quite a lazy manner.

It's complicated to sort these different options and currency exchanges as humans, but if we were to leave it up to our mobile phones, it would be less so. To be sure, there are no universals but there is one constant throughout these different regions - the mobile phone. So, we need to think about the mobile when talking about virtual money.

Overall, there are going to be winners and losers when we talk about virtual money.

The Winners are easy to spot. They are: Economic growth / Reduced crime /Reduced tax evasion / Banks AND *Poor people - they'd be the biggest winners. in a country like Kenya, getting a SIM enables cashless banking, and access to lowered transaction costs to poor people. the sheer security of that cashlessness cannot be overemphasized.

Losers:
This is harder to say. But definitely the Government. The money you earn from printing money is significant. So moving towards virtual money is something that the government is understandably less than enthusiastic about right now."

Then science-fiction writer Bruce Sterling took the floor (as a "resident big thinker at LIFT" as described by moderator Bruno Giussani):

"I like to write a lot about ubiquitous computing and I know that Korea is one of the big places for ubiquitous computing. But I got very interested in cellular phones, because I think they are the application of Ubiquitous Computing that isn't science fiction. But today, I want to talk about the poor world. 2 kinds of poverty. 1) people with no money 2) people who can't make money. Type 2 has no cure.

There used to be material poverty, with peasants and farming and land. That was the old poverty. Now we have 21st century poverty. This new poverty is urban. The peasants of the old are leaving and moving into cities. More than 1/2 of the world live in cities; the fastest growing cities are the poorest; Lagos, Mumbai, Sao Paolo.

But the poor have cellphones. People used to talk about the computer divide. The haves and have nots; the computer wealthy and the computer poor. there is no cellphone divide. it doesn't exist. people are surprised, even alarmed at how eager poor are to have cellphones. in india, the user base is expanding 6million a month. that's just an account. and families can use 1 account. illiterate people use cellphones. The poor in these cities, therefore, are not the old kind of poor. Like the rest of their urban counterparts, they're sophisticated.

In terms of virtual money, I think we're seeing the invention of an anti-bank, or even anti-money. Who is it that doesn't like cash?

The people this really matters to is the new urban poor; they are the stakeholders in the post-cash economy. There are 100s of millions of them, and they are young. What does this mean to Koreans? You're not a poor country. you're a rich sophisticated country. you're in the rich person's club, the OECD, etc. what you're interested in the uber broadband ubiquity money maybe with Cyworld spending money. but i suspect the country's contribution will be to north korea, which is full of poor people.

There is a a stark electronic contrast between North and South Korea. Will North Korea collapse? Yes. Their atomic bombs will collapse, and the regime will expand. When it collapses, who will go into NK? The Chinese? Russians? Japanese? The USA? No.

So I reason, if NK collapses, South Korea owns it. It's SK's problem. I know this doesn't sound very encouraging. if we see today's headlines, there's a currency crisis, etc. where will SK find the economic strength to bail out NK? Well, you're going to have to come up with an inventive post-collapse poverty solution. it's not going to be with existing money systems.

As soon as the regime collapses, North Koreans will get cellphones. And they will go to cities. RIght now, North Koreans are held in place. Unrestrained, they will go to your cities. You're going to have poor North Koreans in your cities.

Communist economy's are radically different to capitalist economies. There is very little there that is useful. It's actually actively BAD. You can't reform it; you just have to replace it. What has to happen in NK is going to be what happened here in South Korea since the 1950s. In NK will have to be one of the most rapid bootstraps.

Something radical and unheard of has to take place in order to absorb a society that is so backward and oppressed. Failure to think this through is going to result in shocked economies; So, South Korea must come up with a solution for this poverty. An electronic Korean solution for poverty.

This won't happen tomorrow; but this has to start being thought about, "What if my user was North Korean?" If you can solve this problem, it will have universal applications. Now, why do i think South Korea will do it? Because you've already done it - by taking a bleeding and torn society and turned it into a sophisticated and exciting society. Thank you."