The Wheel and Money

Undoubtedly one of the greatest achievements of humankind, money is characterised by its immense versatility, just like the wheel, with which there are some fascinating parallels. The wheel is a round construction that rests on an axle around which it rotates, while money consists of numerically expressed units of value that are embodied in physical objects, including coins in round form. This enables money to be mobile, as it can be passed easily from hand to hand, provided that all the parties involved accept its units of value; and while the wheel is stabilised by its axle, the mobility of money is based on the universal acceptance of these units of value.

Other common features of money and the wheel are their resilience, independence and sustainability. The movement of a bicycle only requires the muscle power of the cyclist, gravity when travelling downhill and wind and inertia when coasting. Similarly, once money is in circulation, it can be passed from user to user without the need for additional logistical support. No additional infrastructure is necessary for either and their use is sustainable because it conserves resources and is efficient. There is no question that both the wheel and money have had a significant impact on the way the world works.

Bicycles and Car, Cash and Card: A Symbiotic Relationship

Cards versus cash, cycling versus driving – at first glance, they may seem like natural opponents, yet they are closely linked and influence each other. The development of the bicycle had a major influence on the emergence of the automobile, as expressed by the renowned American transport researcher James J. Flink in The Automobile Age: “No preceding technological innovation – not even the internal-combustion engine – was as important to the development of the automobile as the bicycle.” The same applies to cash in relation to digital payment methods.

From Hand to Hand: The Beauty of Immediacy
Much like the bicycle in Brett Scott’s analogy, cash is a technology with a more analogue approach, but one that has advantages that ‘high-tech’ alternatives do not. When paying with a card at the checkout in a shop, for example, this seemingly simple process is actually highly complex due to the multiple intermediaries involved, including credit card companies, point-of-sale terminal providers and banks, not to mention the data centres around the world interacting with each other to collect the transaction data. By contrast, simply handing over cash allows an instant and conclusive face-to-face transaction to be completed without any fees being incurred by payment service providers or user data being generated.

"Let's imagine cash as the bicycle of payment transactions, while digital payment systems, via app or card systems, are the 'Uber' of payment transactions. If we want to maintain the balance of road users, if the resilience of payment traffic is to be ensured, cycle paths have to remain intact and 'Uber' must not be allowed to dominate road traffic. To maintain a balance of power in the monetary system, we need to protect cash in a similar way to ensure that multiple payment systems co-exist."

Brett Scott*
in conversation on the Münze Österreich
podcast series Gerstl & Marie

* Brett Scott is an author and journalist with a particular interest in international finance and digital currencies.