Insights on Marketing & Technology

A fresh view on money - a new paradigm is emerging

We rarely think about what money is and where it comes from. Most of the considerations we have about money is of a more practical nature and there is little said in the media and educational institutions about the inner essence of this important subject even though it is all pervasive.

Martin Boye Ovesen
  • By: Martin Boye Ovesen
  • Published: 22-08-2017

Go through the day and notice how many moments of every day that is intimately connected with either the acquiring or spending of money. Most days you go to work to earn the money that you will inevitably need to spend. Each day that passes means you have used up one more day of your mortgage or rent payment. Try taking a bus, riding a train, or driving your car without spending any money. Not to mention having a physical body which has a habit of wanting to be fed and clothed every day.

In this light, it seems worthwhile contemplating what money is and what the future will bring to the business of money.

In its essence, money is a means for transfer of energy (that comes in many forms such as time, material and goods). It fulfils the three necessities for allowing two parties to make an exchange of energy; A) to act as a means of payment, B) as a store of value and C) as a unit of account.

As such, money has no intrinsic value but trust. Its useful value is therefore derived from what sort of transaction it allows and what sort of choice it gives its bearer. A currency is a system of money used by a state/nation to ensure that an effective means of payment is in place and in constant circulation - and deep down it serves as a fundamental and primary political tool.

Money is a system. It moves energy, time and matter. It is a channel and carrier.

There is a lot of interesting literature on the nature of money and especially the future of money. In this literature, one finds a strong indication that we are on our way towards a new paradigm when it comes to how value is transferred between Party A and B, how it is stored and how it is used as unit of account. This new paradigm or model is increasingly referred to as “Smart Money”. It will be something that will have a great impact at many levels of society, geopolitics and our daily management of value transfers.

Smart Money will also add new layers to the deeper principles that shape the very foundation of how long term, sustainable wealth is created and will enable reciprocity in ways we have not seen before.

Therefore - something significant is happening; money and payments are becoming smart - because of a technological design called blockchain or “distributed ledger technology” (DLT). This technological design is what is behind Bitcoin, Ether and other digital money that already is out there in the open market.

This Smart Money is called cryptocurrencies and is something completely novel. They are 100% digital and programmable - allowing this new kind of money to contain rules, to move around, to manage themselves according to defined agreements and all in all to do many things autonomously.

Smart Money are currently just a supplement to traditional payment schemes, but holds the potential to replace them completely - so obviously this is a significant agent of change and an opportunity for Financial Services in general and the Payment Services Industry in particular.

The long-term benefits for society, government and the general economy are well ...

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Bo Hembæk Svensson

Bo is Blockchain Business Development Manager at Nets Denmark A/S and has 30 years’ experience from the software industry where he has held various positions within business development, management and consulting.


Martin Boye Ovesen

Martin is Product Manager at Nets Denmark A/S and has for more than 10 years worked with various digital infrastructures used for electronic documents, digital identities, payments and the clearing of payments.

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