Over the past 20 years, innovations previously undreamed of have appeared left, right, and center. Most recently, automated technology and artificial intelligence are revolutionizing a range of industries and sectors, from health care to transport.
Cryptocurrencies are another technological revolution taking us by storm. The digital currencies are created and used online, with some, such as Bitcoin, taking off in recent years. Bitcoin has soared in value since its 2009 introduction, reaching nearly $5,000 in value per Bitcoin this month.
Cryptocurrencies could soon be part of transportation demand management, making it easier than ever to use trains and buses, bringing a swift, clean, multimodal transit system to cities around the world.
Cities could even begin accepting cryptocurrencies on transit as the first step in revolutionizing their entire financial community. With a safe way of moving cryptocurrency established, businesses would be able to make direct transfers almost instantly, which could help local economies to thrive.
Public Transport and Contactless Payment
Contactless payment (making purchases with chip cards) has quickly risen in popularity in a number of sectors. The ease of use and ability for customers to make quick transactions without having to enter their PIN code has helped to transform cash into something of an archaic concept.
However, it’s not just retail facilities that are adopting contactless payment methods. [Editor’s note: See the map for all the places Bitcoin in particular is accepted around the world.] Public-transportation services, such as buses and trains, have been reducing the use of cash for some years now. In London, all public transport relies upon an Oyster contactless debit or credit card, and the story is the same for many other places with transit.
The growth of cryptocurrency provides a new opportunity for contactless payment. At first only accepted by a few websites, Bitcoin now is making an impact on the online gaming industry and mobile casinos. Even some retail stores, such as Subway, are accepting Bitcoin payments.
Technology is highly likely to continue to shape the way we travel in the future. As an early adopter of contactless transactions, public transit is clearly ready to embrace the revolutionary changes that cryptocurrency could bring. In Liverpool, development of a Bitcoin ticketing system for public transport is already underway. Fundamentally, the automatic ticketing system consists of a processor and a Bitcoin hardware wallet to record transactions and support Bitcoin payments.
The Benefits
The benefits of the public-transport sector adopting digital currency technology are extensive; payments would be faster and more secure, as every transaction made using Bitcoin is stored in a large public ledger. This decentralized database, also known as the blockchain, makes fraudulent activity difficult using the cryptocurrency. Although in recent years a number of cryptocurrency scandals and thefts have made the news, if done right, cryptocurrency is safer than any system currently used.
However, while cryptocurrency transactions may be easily integrated into the existing contactless payment systems for buses and trains, it’s less clear how planes and ferries would adopt the system, particularly as international travel requires a higher level of security measures.
The Challenges
Despite the extremely high potential for public-transit methods to adopt virtual currencies without difficulty, a number of concerns are associated with doing so. If cryptocurrencies are widely adopted and the technology behind them is used to manage power supplies and run public transit, improved security and regulations will be needed. The very nature of cryptocurrencies, such as Bitcoin, means that they are not controlled by a central authority or government. This decentralization poses difficulties that must be addressed.
Some experts also fear that cyber-attacks will increase in the future if cryptocurrencies are widely used. In extreme cases, some are concerned that entire cities could be shut down if security is breached.
The Future
Despite these drawbacks, it’s highly likely that we will see cryptocurrency payment options available on more public-transit systems in the near future, at least on a trial basis. In particular, expect to see this payment method appearing on buses and trains as they are already well equipped to deal with contactless payments and are forward thinking in adopting new technologies.
It could take a bit longer to see virtual-currency use on airlines, although the increasing use of e-tickets will facilitate this technology. Before we reach this stage, better security is needed.
Still, we are not far from the day when cryptocurrency is moving us effortlessly around our cities.
Photo of people at a slow turnstile by WNYC New York Public Radio/Flickr. Photo of Bitcoin by Zach Copley/Flickr.