Will Cash Completely Vanish?

The power of electronic cash, however, isn't simply as a digital replacement of an already refined analog technology. E-cash will eventually take off because of what we can do with it. We have so much choice about where and what we are buying, that it's inevitable we will soon have plenty of leeway in choosing how we buy. If I want to purchase a case of Alpo from Pets.com using my American Airlines frequent-flyer miles, why shouldn't I be able to do so? If Amazon.com wants to issue special "Amazon dollars" that are worth $1.20 apiece at selected merchants, why wouldn't I start changing my U.S. dollars for Amazon dollars at a furious pace?

For a new generation of e-bankers, this is exactly the future they have in mind, a place where money isn't universal but personal. My employers at TIME could pay me, if they wished, in specialized T-dollars that fluctuate based on reaction to my articles. If they get lots of positive e-mails and letters about my work (start writing, Mom!), the dollars get more valuable. I can spend them anytime, so there's room for me to do a little speculating: Should I hold on to the cash in the hope that this story ignites a flurry of flattering notes, or should I spend quickly in case it bombs?

A version of this kind of alternative-currency universe is up and running on the Internet. At beenz.com users earn digital beenz for performing e-work--like telling advertisers about their buying habits. Beenz can be cashed in at about a hundred retail sites and wherever MasterCard is accepted online (at about 200 beenz to $1). And while the roughly $6 million worth of beenz in circulation today is no threat to the greenback, this hints at a future of nearly unlimited choice in currency. And because of the Net, you'll be able to exchange these e-currencies more easily than you can now change yen for dollars.

Bankers say they always get the same three questions about this emerging e-cash world: Are we still going to have pennies? Doesn't using e-cash mean giving up privacy? Won't this put Federal Reserve Chairman Alan Greenspan out of work? The answers, in short, are: Pennies will keep turning up for the next decade at least. Some e-cash will be traceable, but much of it will be as anonymous as a wrinkled ten-spot. And with jillions of alternative currencies out there, it's possible that Greenspan--who controls the economy by controlling dollars--may find his power tools are losing their torque. But as countries such as Argentina ponder dumping their own currencies in favor of the dollar, it seems likely that Uncle Alan's power will last at least until the end of his next term, in 2004. So go ahead--stock up on your Sacagaweas.

--By Joshua Cooper Ramo