DigiCash: Failure is Interesting
11 November 1998. Noncommercial use of this text is encouraged, so is
feedback (email@example.com), for anything
commercial, you need my permission.
Failure is interesting
Much more than in success stories it is in sad failures where the gory
mechanics of development break through, scattered pieces lying around open,
available for inspection to anyone. No gloss of "evolution," "market success,"
"superior technology" obscures the view on the vectors of forces, the pulls
and strings that shape the events.
The most important point to be learnt from DigiCash's troubles
is the utter contradiction of any techno-determinist view, or its milder, more
fashionable version according to which technology is developing according to
some inherent, independent trajectory.
What DigiCash's problems bring to the fore is that technology is much more
than just technology, a mere set of tangible and intangible artifacts. If that
was the case, DigiCash would fly miles high, because it is a beautiful,
elegant, socially desirable technology. But it's flat on the ground because it
has been particularly weak at associating with its technological proposal all
the other elements that are necessary for transforming a technology from an
idea into something that actually works.
In the case of DigiCash, this would have been, most of all, banks and
users. But neither banks nor users are Alices and Bobs, as envisioned in
Chaum's blueprints. In the real world, they have their own interest, their own
inertia, their own idiosyncrasies which need to be reflected in the technology
they are to be attracted to it.
It might very well be the case that DigiCash was too good a technology, too
precisely thought out and over-developed. When it encountered real human
beings, real institutions, real on-line behaviour this made it impossible to
change the technology to reflect those different interests, not because it
wasn't good enough, but because it was so well constructed that nobody dared
to fiddle with it.
In this sense, a strong but inflexible technology can be a major impediment in
technological development, because technological development is to a large
degree about the mutual and simultaneous constitution of multiple elements:
the technology under development; institutions supporting the technology;
society incorporating the technology into its routines; and culture making
sense out of what is happening and integrating it into a larger context of who
we are as we relate to the technology. None of these elements can simply
determine others, nor is any simply determined by others. They are all in a
process of constant adjustment. Many of the major new technologies have
undergone series of deep changes under the influence of multiple non-technical
factors shaping its history, just think of the history of radio.
A motley crew of different forces, ideas and interest needs to be incorporated
into technology in order to make it acceptable, that is, make it work. The
true innovators are, more often than not, not the brilliant inventors, fully
immersed in the technology and only the technology, but "heterogeneous
engineers" people who manage several areas at the same time, able to translate
from one into the other. This takes time, because not all elements change at
the same pace. Artifacts are usually rapidly replaced, but that doesn't mean
that much, since they are only one, arguably small, aspects of what technology
is all about. Which is one of the reasons why change is never discontinuous,
despite all the millennarian rethoric surrounding the Internet.
The other important myth that can be easily debunked looking at the story of
DigiCash is the 'invisible hand' of the market and the supposedly pitoval role
of 'consumer choice'. These concepts might be adequate if introducing a new
technology was about putting new artifacts out and then see who picks them
up. But the mutual adjustment of factors that have sometimes a very slow pace
of change requires deep pockets and sustained efforts. In the case of
electronic money, it requires extremely deep pockets since the product is
technologically, economically, legally, politically, socially and culturally
Looking at the current field of electronic money, only heavy hitters are left
over. There are the smart card behemoth alliances -- Mondex and VisaCash --
which are backed by a significant share of the financial industry. Pockets
don't come any deeper than this. And still, even they have massive troubles
coordinating all the different aspects that, together, make a technology
work. Mondex has just rescaled significantly its implementation in Canada. Not
even the most wealthiest institutions can simply control technology (as
political economy tends to suggest).
On the other end, micro-payments are being promoted by IBM and Digital/Compaq,
companies that can also mobilize very significant resources. By the time when
these technologies appear on the 'market' most of the major decisions will
already been made.
Maintained by Joseph Goguen