Marginal Revolution: Digital Cash

July
S	M	T	W	Th	F	St
			1	2	3	4
5	6	7	8	9	10	11
12	13	14	15	16	17	18
19	20	21	22	23	24	25
26	27	28	29	30	31

« Markets in everything | Main | I, I, I »

Digital Cash

A glamorous Whole Foods market just opened in my neighborhood. You can pay for your groceries using just the swipe of your fingerprint. Cool.

Posted by Alex Tabarrok on January 24, 2007 at 07:32 AM | Permalink

Comments

John Mackey, CEO of WholeFoods, "Globalization is the most caring and compassionate strategy we can implement to help the developing world lift itself out of poverty. This is the simple truth. But how many people understand this truth? The Left has convinced the idealistic young that globalization is harming the developing world — that it is a plot by greedy corporations to rule the world. The freedom movement has a responsibility to explain the wisdom of globalization and to hold it up as a noble ideal. " ...from his Action Plan
entitled.........Winning the Battle for Freedom and Prosperity"

http://www.libertyunbound.com/archive/2006_06/mackey-winning.html

Posted by: Dave Meleney at Jan 24, 2007 8:09:56 AM

Does anyone have an idea why this isn't more prevalent already? The technology has been around forever. Fingerprint readers are now dirt cheap (~$40). Additionaly biometric technologies to provide an extra layer of security, such as voice recognition, also exist.

Posted by: Doug at Jan 24, 2007 8:46:10 AM

Cub Foods (owned by Supervalu) in Minneapolis has had this for a while, but I'm hesitant to sign up for the program and have my fingerprints floating around on some database. Is there any reason to believe that, if for some reason I was suspected of a crime, the government wouldn't subpoena Cub Foods for my fingerprint so they could cross-reference the crime scene fingerprints against mine?

Posted by: Christopher Monnier at Jan 24, 2007 9:12:38 AM

Many fingerprint scanners are not that accurate. Mythbusters were able to defeat one model with a photocopied fingerprint.

Posted by: frank at Jan 24, 2007 9:13:14 AM

It was either here or in a television commercial where I saw that UPS can now track packages based on bar codes, so when one is scanned, they will know where it is. Complimenting a customer one night on his awesome looking phone, I mentioned this, and he told me that while the technology wasn't there yet, they would soon be able to do something similar for appliances. So if someone tried to steal a refrigerator, they'd know how to track the person. It's pretty cool, but at the same time, I can't help but think, Big Brother is coming.

Posted by: Brian at Jan 24, 2007 9:31:45 AM

Just a fingerprint? I though Whole Paycheck, er, Whole Foods, charged an arm and a leg :)

Posted by: Peter at Jan 24, 2007 9:34:14 AM

If they can get it all the way down to just a swipe of the finger that would be great. They need to do something about the part where $500 charges for a week's groceries end up on your Visa bill. Am I alone in suspecting organics are primarily a scheme to triple your food bill?

Posted by: mkl at Jan 24, 2007 9:38:17 AM

I don't understand why people complain so much about Whole Foods prices. When author Tim Harford in The Undercover Economist examined prices at WF and Safeway on the exact same goods he didn't find much of a difference. Indeed, I've noticed myself for example that Breyer's ice cream is actually cheaper at WF than Safeway.

I basically go to WF for meat -- fish, chicken, etc. It seems to run a couple dollars per pound more than other grocery stores but I also think I'm getting a better product. I don't eat organic food, which is a rip-off, goes stale easily, and has dubious environmental benefits. For stuff that comes prepackaged I go to Safeway.

My grocery bill doesn't seem that outrageous. But perhaps I have been in DC too long.

Posted by: Colin at Jan 24, 2007 10:08:50 AM

That's correct. Why Whole Foods has the perception of being expensive is that many shoppers buy much fancier items than they would at a run-of-the-mill supermarket.

Posted by: Peter at Jan 24, 2007 11:25:41 AM

Check Mackey here: http://www.newmedia.ufm.edu.gt/indices/mackeycapitalism/mackeycapitalism.html

Posted by: Luis Figueroa at Jan 24, 2007 11:41:52 AM

Fingerprints are unique, but hardly secret. We leave them everywhere. Off the top of my head I presume that WF is using a print scanner to generate a unique fingerprint ID that is in turn used to access my credit information in their database. IOWs, its a password.

The trouble is, its not a secret password. Anyone with a finger print scanner can discover my print ID easily enough. Furthermore, if my account is breached, I'm going to have a difficult time changing this password.

Posted by: Dean at Jan 24, 2007 12:38:32 PM

"Am I alone in suspecting organics are primarily a scheme to triple your food bill?"

One of my favorite teachers in high school told the class that while she buys organic fruit and similar goods, she knows there's nothing special about it. She said that if you wash the fruit you buy at a regular supermarket well, you'll be fine. She also poked holes in the bottled water fad. There was another teacher who dismissed the idea of a free range chicken, saying all they did was let it run around before they killed it.

Last week, my first table of the night was a woman and her husband or boyfriend who informed me about the dangers of soy. I mentioned the comments from teachers about fruit and chicken, to which they responded that they pump the others up with hormones and feed on its own feces.

I must say, this stuff makes me think. So when I was buying chicken to grill this week, I looked closely at the packaging, and Tyson's Grade A said it was hormone free. Now, I am not entirely sure of what the hell to think.

Posted by: Brian at Jan 24, 2007 1:04:28 PM

Security is based on three things: Something you have, something you know, and something you are.

Credit cards are "something you have", your signature is "something you know" combined a bit with "something you are", while fingerprints are solely "something you are".

The more high end fingerprint scanners check for 1) warmth and 2) pulse. But even those can be defeated by pressing a finger on top of a thin copy of the fingerprints lifted off a cup with household items.

Fingerprints are perhaps the most convenient form of "something you are". But as I mentioned is easily defeated.

Truly, the cost of beating credit cards (which is quite a simple procedure) is pretty high due to expensive equipment, but all but the most sophisticated of fingerprint scanners can be circumvented relatively cheaply. But the semblance of security is certainly comforting :)

Both biometrics and the credit card systems concentrate on the 2 weaker parts of the 3 pillars of Authentication. "Something you know" is much harder to copy/extract. How about a written passphrase?

A hybrid system might improve over it slightly, by integrated biometrics data, or SecureID-type tokens. But the added security of that will be quite miniscule relative to the cost of implementation.

The handwritten passphrase has the following advantages: Can be quite long, relatively cheap to automatically process, can be easily verified by humans. Might be a bit less convenient than swiping your fingerprint, but it also means you still don't have to carry any cards, etc.

Posted by: Mike at Jan 24, 2007 1:30:46 PM

The more high end fingerprint scanners check for 1) warmth and 2) pulse.

I suppose that would make it impossible to lop off someone's finger and use it to get past the scanner.

Though you'd have to be really desperate for costly organic products to attempt that scheme at Whole Foods :)

Posted by: Peter at Jan 24, 2007 3:15:24 PM

Biometrics is a terrible user authentication system. Whatever the system it will eventually be hacked through some type of emulation, just like Mythbusters showed with fingerprint scanners. It may be a difficult 'password' to guess but it's one you can never change. You only have 10 fingers for print scans, and 2 eyes for iris scans and then your out of luck. Of course there are many more unique biometric characteristics left after that but the equipment needed to handle so many different body parts is not worth the cost when others can develop stronger hashing and encryption algorithms.

Posted by: MaverickRonin at Jan 24, 2007 4:13:03 PM

Said Whole Foods is *very* impressive, methinks.

I really liked their wine sampling room upstairs. For about $10 I got
to try a small pour of a $90 Bordeaux and an equally pricey Aussie shiraz
that I never would have bought/tried otherwise. With about 100 bottles
to sample from ranging from $10 to around $600 and samples priced
accordingly I think they're going to make a *lot* of money with this
new wine sampling system. It's the most innovative thing going in the
whole store, imo.

Posted by: Mjrmjr at Jan 24, 2007 5:25:27 PM

So why hasn't this technology taken off? For a crowd familiar with the "Left Behind Series" (http://www.marginalrevolution.com/marginalrevolution/2005/10/strange_tabarro.html) you should realize that this brings us one step closer to the "mark of the beast" (http://www.marginalrevolution.com/marginalrevolution/2003/12/credit_cards_un.html)
--Insert sarcasm here.

Posted by: Curtis at Jan 24, 2007 5:32:57 PM

It would be ok if organic food wasn't so morally objectional.

Posted by: R. S. Porter at Jan 24, 2007 7:46:47 PM

To Brian,

UPS's tracking technology is overkill, to say the least. Do you really need to
know where your package is every step of the way? Isn't it good enough that it
gets delivered?
When was the last time you read about a thief stealing a fridge--or any other
appliance? Don't thieves concentrate on valuable things such as cash, jewelry,
and art? Does your fridge have a high street value compared to the cost of
fencing it?

Posted by: Bill Stepp at Jan 24, 2007 11:05:57 PM

UPS's tracking technology is overkill, to say the least. Do you really need to
know where your package is every step of the way? Isn't it good enough that it
gets delivered?

But for their own internal purposes, they need to do the tracking anyway, so why not let customers see where their package is? It lets the customer estimate the time of arrival (which is often before the officially scheduled date) and it gives the sense that things are well organized and the package is being well cared for.

Posted by: Slocum at Jan 25, 2007 7:39:05 AM

In response to MaverickRonin, terrific point about it being easy to hack, but I think that the goal with this especially at a grocery store is less to make an unbreakable security device and moreso to come up with something that is decent and impossible to forget. A better credit card, or a long alphanumeric password can be strong but they can misplaced or forgotten.

Posted by: Rob C. at Jan 25, 2007 9:15:02 PM

I think that this purchasing technique is great. The fingerprint scanners would be so convenient for customers. I don't know why the idea of fingerprint purchasing hasen't came about sooner. A fingerprint scanner is old technology, you would think that they would be more common.

Posted by: Mitchell Hatley at Jan 28, 2007 9:19:31 PM

This is a great step in technology and also a great step for the United States economy. If it is as simple as a scan of your finger print there will be more than likely an increase in national spending. Having this available will also help with security reasons. There will be no more issues with stolen cards or even stolen identity. I believe this is a great idea and other businesses should adapt to the same process!

Posted by: La'Tasha at Jan 29, 2007 8:19:38 PM

liqingchao 07年7月26日

google排名
 google排名
 wow gold
wow gold
powerleveling
powerleveling
wow gold
wow gold
wow powerleveling
wow powerleveling
wow power leveling
wow power leveling
powerleveling
powerleveling
wow power level
wow power level
world of warcraft powerleveling
world of warcraft powerleveling
world of warcraft power leveling
world of warcraft power leveling
hong kong hotel
hong kong hotel
beijing tour
beijing tour
rolex replica
rolex replica
超声波探伤仪
 超声波探伤仪
 翻译公司
 翻译公司
 上海翻译公司