How technology is changing the world

Leonid Bugaev is an author of books on mobile technologies, a mentor, business coach and speaker who went from a technical designer at the Art. Lebedev Studio to the CEO of an international agency. In the first part of our long conversation, we talked about what the world would be like without paper money, and why the future is with Uber, and lawyers and bankers should seriously fear for their work.

The head of MasterCard in the UK and Ireland, Mark Barnett, recently said at the Money2020 conference that in 30 years the British will forget what paper money is, because there are smartphones, mobile, contactless payments. He believes that a world without paper money is a “better” world. What do you think of it?

Unfortunately, I don’t know Mark personally, but in our agency business we met with MasterCard Russia, and in London, just after such a meeting, I had a very interesting experiment.

They said that in markets with a well-developed financial infrastructure, it is possible to live with a plastic card for a week without paying in cash. I tried this in London in 2013 and gave up around the third day, when I think I went out at night to buy water – then I still needed cash. But before that, I spent more than 48 hours exclusively with a card – when I bought an Oyster card on the subway, I paid in stores.

The two main trends that Mark had in mind are demonetization and digitalization, which will eventually lead to the disappearance of the physical form of money. It will be virtual. For example, the money that is in my account is not physical gold, gold coins, pounds sterling, piastres, euros. First of all, these are ones and zeros on the servers of banks.

which store information about who, to whom and how paid. Now the state pays the mints, and one tenth of the value of the coin is spent only on its production – this is elementary expensive. Banknotes, of course, are much cheaper, because they have a larger denomination. But in fact, demonetization is less coins, more papers, and digitalization is “why do we need coins if we can deposit them into an account and receive an SMS about how much we have left on it?”.

There is a very important breakdown in people’s thinking: if earlier an ordinary wired telephone stood on a shelf in an apartment and did not cause any feelings, because it belonged to the whole family, imagine our readers who have all correspondence, photos, everything personal is stored in their phone .

Now each of us has an incredible personal device in our pocket, and we are starting to trust it.  Money has exactly the same property – it is mine, I have earned it and I want to keep it. And this personal attitude towards money and the phone converges at one point, and we begin to think – “why not really store them there?”.

What is needed here is a shift in perception – most people should come to the conclusion that money in the phone is cheaper, easier and simpler. And indeed it is. For example, today I decided to please my wife and buy her flowers in a shop near the house, but, unfortunately, I forgot my plastic card, so I had to carry with me the coins that the cashier gave me for change.

I usually collect these coins in a jar and then give them away to people in need, because I understand that it is easier for me to round the amount of 99.99 to 100 and calm down. I am surprised at the very need to carry heavy, costly coins that rattle in your pocket. I see this as ineffective.

If we talk about efficiency in the context of money, you need to understand that they used to perform a very important function – they equalized the cost of an hour, mine, yours, other people who have some value and value, and as a result of this we could exchange. Before that, people had barter.

They said: I will give you a fox that I shot while hunting, and you will give me two bags of salt. And they were answered – no, your fox is not as cool as my bags of salt, and it was necessary to bargain. Then the idea of ​​trade appeared. Money has made all this much easier. But they also have their negative sides – they are nameless, they can be stolen, spent, simply washed in a washing machine. If the bills do not contain a plastic component, they can easily be lost as a result of a fire.

Electronic money is insured against this. The only unpleasant thing that can happen to them is the zeroing of all bank accounts. Here, an important issue will be the degree of security, how you need to store information about finances. Many futurists, including Hollywood, show us scenarios in which terrorists destroy not houses or people.

but the financial system. For example, in the series “Mr. Robot”, a group of hackers targets the evil Corporation and zeros out all the debts owed to them by end consumers. This is a beautiful story about a modern-day Robin Hood who came out of the forest and said: that’s it, I erased the memory of the rich, and now you poor people don’t owe anyone. Maybe within the framework of one bank it is possible, but on the scale of the whole country it is unlikely.

Another important breakthrough is that money has a memory. Digital money is not just a coin that lies and waits to be taken. Using the example of bitcoins, we saw that digital coins can also store the memory of those transactions and transactions in which they participated. Imagine, by analogy, that in order to transfer a coin, we must leave our fingerprint on it, and it will completely save this moment of transfer – for example, on such and such a date I bought roses and paid for them to such and such a seller.

And the blockchain-based money model that follows bitcoin will completely store information about how that particular block of money traveled. As a result, there will be less corruption, because it will be much easier to track where taxpayers’ money goes. This technology dramatically increases the transparency of financial flows. So it will be very seriously resisted at the state level.