Paying is strange. Consider the following exchange:
Me: Hello unfamiliar person. I would like to give you some fiat currency in exchange for the goods and / or services you provide.
Clerk: Splendid! Let me just whip out this large, obnoxiously bright, unwieldy machine and get the banks involved in our newfound relationship.
Me: That sounds reasonable. Surely Jamie Dimon did not make enough money last fiscal year and deserves a cut of your vanishingly low margin retail business. Please take this cold, hard, magnetized piece of plastic. The design reflects my personality and pecuniary worth.
Clerk: I am obliged to thank you for handing me this trinket. Allow me to swipe it, the same way humans have read information off of cards for decades. You will also be required to sign a piece of paper because I honestly believe you may call your bank and vehemently deny purchasing this cup of black coffee.
Me: Perfectly understandable. I love the feeling of generating potential evidence for a court case every time I want to buy something. I also demand a paper record of this transaction because I do my taxes with a quill pen and slide rule.
Clerk: Yes quite common. Well, have a wonderful day, stranger I have interacted with but not touched. This large, black, computerized point of sale system symbolizes the technology-driven separation that grows between humans even when we interact in pers..
Next Customer: Hello unfamiliar person!
Paying isn’t too hard. Swiping plastic takes seconds. It’s just too weird. Here I propose the way I would prefer to pay, optimized for low friction and high humanity.
The handshake, like currency, has been around for millennia as a symbol of trust. Unlike currency though, the handshake requires no additional hardware, central banking system, or card. It does not allow for a precise and safe transference of wealth, but it could, with a little help from our friend the bitcoin.
This is an idea I call “platonic payments”.
To accept payments you wear a watch, or ideally it is integrated in to an existing watch like the Pebble. To pay you wear a ring, which contains a short-range rewritable RFID tag storing a single bitcoin address. The payee specifies the amount with two dials on the watch, one for dollars, one for cents. Both parties then shake hands, bringing the RFID ring within reading range of the detector, which uses the information to charge the payer’s bitcoin wallet. No fees. No slow hardware exchange. No cold plastic or large, expensive POS systems blaring light in an otherwise relaxing environment. I also think service establishments should just charge 20% tip by default.
Bitcoin addresses are nearly infinite and can be created, online or off, and disposed of at will. Thus an NFC chip in a smartphone could passively rewrite the tag with a fresh address every time you pick up your phone. The merchant software, either run on the watch or connected to a smartphone, would request the appropriate amount from the user’s bitcoin wallet with the public key. This is not built in to the bitcoin protocol but could be managed by a service like Coinbase, which could then verify the account is valid and securely transfer the private key.
This does face the problem of a change by both parties. However, if it started being built in to smartwatches and all users had to do was buy a cheap, stylish ring that barrier may lower. A payment method that didn’t force me to take anything out of my pockets or even carry a wallet, while increasing the humanity of a transaction sounds like a dream come true. I would even get my tag implanted so I wouldn’t have to wear the ring.
The other problem is the system still involves trust. Someone could skim your ring, grab the address, and post a request if they got close enough. Since each transaction involves a new address the hacker could only make one request, but it could be big. This could additionally be mitigated by only allowing transactions of a certain size or only keeping a small amount of money in this wallet, making skimming uneconomical.
Alternatively, Coinbase could ask the user to verify the transactions they made after the fact, but this would allow the payer to deny legitimate transactions. And that, is something I would love to test. If you knew you would get away with it, would you rob someone after shaking their hand?