From Teens to CryptoCurrency: The Technological Impacts on Money As We Know It

12/06/2017 02:44 pm ET Updated Dec 06, 2017

Each Black Friday and Cyber Monday, economists and retail analysts watch spending patterns as a means of gauging economic health and this recent Thanksgiving was no exception. Americans spent a reported $5 billion on Black Friday and eclipsed $6.6 in spending on Cyber Monday 2017.

Financial technology company Current, which makes a debit card and app targeted towards teens, noted that teen spending increased 156 percent on Black Friday, driven by a 40 percent increase in the number of teens spending, and an 85 percent increase in the average amount spent per teen when compared to the prior 30-day average.

“For American teens Black Friday was as much an event as it was a day of discounts, which is why you didn’t see large participation from teens Thanksgiving evening or on Cyber Monday,” said Current founder and CEO Stuart Sopp. “They saved their money explicitly for Black Friday and then went to the mall with family and  friends to shop, socialize and eat food.”

But is there something bigger going on here? Much like global warming is slowly dissolving the polar ice cap, are we seeing the gradual dissolution of how money is used as we know it? One economist believes we are well past that point.

”We already live in a cashless society,” said David Andolfatto, a senior economist at the St. Louis Federal Reserve Bank. “Most people are using electronic transfers for nearly every aspect of payment.”

Andolfatto is a globally recognized expert in cryptocurrency, a form of anonymous and Internet-based digital money that uses cryptography — converting legible information into an almost uncrackable code — to track purchases and transfers.

Launched in 2009, Bitcoin is the best known of the cryptocurrencies and continues to grow dramatically both in use and popularity.

With the price of a single bitcoin recently cresting above $10,000, recently at Token Summit — the conference on the emerging token-based economy — a new entity called Indeco announced the world's first crypto asset pre-sale under the SEC's rules for Regulation Crowdfunding ("Reg CF") which allows anyone, regardless of net worth, to invest in securities issued by startup companies.

Indeco is attempting to pioneer a shared ownership model of sustainable infrastructure assets such as solar energy systems, battery storage, and the building control systems that can make dwellings and communities smarter, safer, cleaner, and more enjoyable.

"We are committed to complying with SEC rules and regulations in this pre-sale period, in our proposed ICO, and throughout secondary market trading," said David Levine, Indeco CEO. "We believe all crypto assets will be subject to regulatory scrutiny, and we plan to create substantial value for our investors by proactively developing a compliant offering."

Regulators are bearing down as the SEC's new Cyber Unit, which was created in September to regulate ICOs, just took its first action in freezing the assets of PlexCoin which had promised investors returns of $1,354% in less than 30 days. Since August, PlexCoin has raised $15 million from the sale of its tokens.

“It’s a promising space but the price action is hugely volatile,” added Andolfatto. “People are naturally attracted by the gains people are making but should be very cautious and take the Warren Buffet approach in that if they don’t understanding it, they should not invest in it.”

And with the advent of platforms like Current, Apple Pay, direct bill pay — the broader the broader question is whether money in the traditional sense is dead?

“Most of the money supply already exists in digital form,” Andolfatto said. “The new piece is whether you can bypass the traditional banking system to make payments.”

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