In one of the biggest and strangest shake-ups to fintech, a researcher has put forward a radical proposal for something called ‘S-money’.
If you thought digital transformation and artificial intelligence was the height of fintech right now, you’d be mistaken. A researcher from the University of Cambridge has proposed a whole new type of money that could ensure completely unforgeable and secure authentication, and allow faster and more flexible responses than any existing fintech.
Publishing his findings to the Proceedings of the Royal Society A, Prof Adrian Kent said this new money – dubbed ‘S-money’ – harnesses the combined power of quantum theory and relativity. By pushing the limits of our understanding of the universe, S-money could allow users to make decisions based on information arriving at different locations and times, but also protect attacks from quantum computers.
In fact, Kent proposes that S-money could facilitate commerce across the solar system and beyond for future colonists as it would be without time lags. However, he admitted that galactic commerce might be a little fanciful at this point in time.
“It’s a slightly different way of thinking about money: instead of something that we hold in our hands or in our bank accounts, money could be thought of as something that you need to get to a certain point in space and time, in response to data that’s coming from lots of other points in space and time,” Kent said.
Explaining the S-money concept further, he said that it can be thought of as secure virtual tokens generated by communications between various points on a financial network. These respond flexibly to real-time data across the world and ‘materialise’ so that they can be used at the optimal place and time.
Test later this year
The tokens can be securely traded without delays for verification, eliminating the risk of double-trading. The users’ privacy is maintained by a mathematical version of a security-sealed envelope, known as a bit commitment.
While various version of quantum money have been proposed over the years, Kent said that it’s currently technologically impossible to keep it secured for any appreciable length of time.
“Quantum money, insofar as it’s currently understood, would require long-term storage of quantum states, or quantum memory,” he said. “This would require an awful lot of resources and, even if it becomes technologically feasible, it may be incredibly expensive.”
While the S-money system requires large computational overhead, it may be feasible with current computer technology with a proof-of-concept test scheduled for later this year.