Cell phone minutes: the next currency
It might just be my old nature mind, but I still find it a daily miracle: being able to walk into the bakery around the corner and trade a piece of paper – called money – for a loaf of bread. We tend to associate virtuality with video games, but when we think further we realize it has penetrated our lives ages ago. Take money; it is as virtual as the Matrix, but as long as we all believe in it its value it works fine.
Back to Africa. We’re not used to Africa taking lead in new technology. Necessity, they say, is the mother of invention and it couldn’t be more true in case of Africa, where pre-paid airtime is fast becoming the ‘virtual’ currency, overcoming conventional currency exchange and lack of banking infrastructure.
There are over 100 million mobile phones in Africa, and it is one of the fastest growing mobile regions. This number will increase to 378 million by 2011, according to Portio Research. Cell phones are already used for music downloads, text messaging, video games and personal piggy banking. Kenya is home to an impressive cutting-edge mobile tool: M-PESA, the world’s only system for sending both minutes and money via SMS. (The “m” stands for mobile. Pesa is Swahili for money.) Airtime minutes automatically load onto the phone of their recipient. The cash is collected from one of the many M-PESA shops dotting the country.
Recently when the violence in Kenya flared up, pre-paid cell phone cards became the most valuable good around. Most people don’t have monthly cell phone usage plans – they just buy pre-paid cards as they need them. But when the stores and kiosks that sell the phone cards were closed due to the violence, they became really hard to come by and soon, cell phone credit became more valuable than cash. Charities have even begun distributing the phone cards which recipients then use to buy food and other essentials.
Sources: Why Africa, TheWorld.org, Reuters. See also: Tribal Communication Technology, Fishing by Phone.
And what can be more valuable than talking to ones friends and family?!
True, talking to family is important, but this is not the point: The cellphone credit isn’t just used to make calls, but as a currency to trade goods.
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The most fascinating part of this development is that, with paper money, the government has the monopoly on printing money, while with airtime-minute-money this power shifts to telecom companies. This shift should have some major consequences don’t you think?
Amazing. I think the writer makes the point here clearly in “but as long as we all believe in it its value it works fine.”
A form of currency for the people made by the people(idealistically speaking) may be just what this country can use in a sense , for now at least, to get the power and control back from the corrupt gov’t and leaders and where it truly belongs in the hands of the people of the country. Koert .com *above* points out a valid point regarding the govt hs the monopoly on the money otherwise….which in a truly democratic country can work (in a matter of speaking) though I believe this makes the people in charge of the people rather than telecom companies……once the value is shifted once, it is easy to find that something else will come of use as well. And once again..the value currency will change.
Save DARFUR!
So… after decades of “charity” for our african brothers and sisters, we can finally conclude that sending money to the forgotten continent has no value. Instead, we maybe should send our simcards?
This reminds me somehow of a recent episode of the animation series South Park. In this episode, physical money is discovered as the cure for AIDS as the proximity of dollarbills makes the retrovirus cells go away. The makers suggest that by injecting 180.000 dollar in concentrated form into your bloodstream, people can get cured from this terrible disease. Which of course is a very cynical comment on the current situation that only money is needed to save the lives of thousands and thousands of people dying from AIDS in Africa who are withdrawn from affordable medicine because of pharmaceutical industry standards.
Watch a clip of the “Tonsil Trouble” episode on http://www.southparkstudios.com/clips/164373/)
cool and gay like all of you
Any surplus item can turn into currency. Actually, it would make more sense to use something with more tactile value as trade rather than just paper money. I’ve read about whole prison populations, devoid of using real money as currency who instead turn to sardines as currency. Seems to operate well for them.
very fabulous!!!!!
jek323x
One thing that a lot of people have missed in this recent economic down turn is the fact that in-game money for all of the massive mutliplayer online role playing games has not been effected. I guess it just shows how strong and stable the computer game industry really is.
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Jack
Virtual Currency
Good point Jack.
Jct: Usury-free creationary banking is taking place in so many ways. With Africa trading with mobile-phone minutes, Arabia trading with mobile-phone card credits, with Hours being traded in Ithaca, with tim-based Greencredits being traded in LETS, the banks get no interest. And the movement to cut the middleman out of the usury is growing.
With Facebook, Twitter, Graigslist, offering social currencies to their databases, the use of new social credits around the world is undergoing unheralded growth as the slower use of old anti-social credits in a social banking network make the news. This revolution in banking is going on right now and the use of interest-free time-based currency is key.