Non-Anonymous Digital Cash Will Usher in the Age of Extreme Price Discrimination

Everyone should be paying attention to China's social credit system, central bank blockchain efforts and digital payment systems. Chinese consumers are at the forefront of adopting these technologies and the government will maximize the political and economic control made possible by the digital panopticon. The technology and temptation to use it won't stop at China's borders though. Silicon Valley is already implementing social control, censorship and economic controls similar to those in China, but many in the West don't believe it is a threat (libertarians) or support the political ends of Progressive SV companies.

Coverage also tends to focus on draconian powers such as kicking dissidents out of the economy, but there are far more mundane uses such as price discrimination. China's social credit system is designed for price discrimination (such as higher or lower mortgage interest rates), but every transaction between private parties is also open to price discrimination if there's no anonymity. Examples already exist in China's video game market, where game companies have a working model of a non-anonymous economy. They know all the user accounts, how often they play, skill level and also the elasticity of demand. They can raise prices for inelastic users and offer discounts to new players in surreptitious ways such as changing the probability of finding an expensive in-game item.
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He believes that the paperlessness of the currency in the Internet era has greatly stimulated the financial industry. On the one hand, the inflow of cash flow has injected more vitality into the Internet giants, so that these Internet companies can also occupy absolute dominance and advantages in the financial market, and related derivative Internet financial services have also developed rapidly. At the same time, however, Internet platforms such as WeChat and Alipay do not want to replace banknotes because of the popularity of mobile payments. At this stage, if electronic money becomes the only currency to replace banknotes, it will bring more risks in terms of security, currency efficiency, and financial support for entities.

An Internet industry person Liu Jun (pseudonym) pointed out to the 21st Century Business Herald that banknotes are part of the base currency and the best anonymous currency. As far as the current social needs are concerned, even if the banknotes disappear, new anonymous currencies must appear. If every transaction can be electronicized and digitized, it may lead to new problems, such as consumption and even social injustice.

Liu Jun specifically pointed out that taking a well-known game operator as an example, many players have similar doubts. Players who do not recharge often have a higher probability of getting a higher discount when clicking on a discount, while a player who often re-ups usually has a lower probability when clicking on a discount. It is almost impossible to buy goods in physical offline stores, but online virtual products are very common in the game industry, and even more direct price discrimination.

“For example, in many games, the 'forging' mode tells the player that you need to buy the 'parts' and get a complete item through a certain number of forgings. The system can control the number of forgings in the background, such as the novice player can forge three times and can be successful, the 'pro' player has to forge 10 times to be successful, so that the final price can be controlled and become targeted price discrimination," he said.

Liu Jun told reporters that the current electronic money is not anonymous. With the development of big data, everyone's spending power and consumer psychology are accurately positioned and analyzed. This is essentially behind the promotion of consumption upgrading. An embodiment of inequality. When the merchants have accumulated enough user data, they can carry out price discrimination. In some online shopping platforms, the status quo has been different for different consumers and different products. If there is no good technology and system to balance and limit, if the banknotes disappear, it may also bring about the retrogression of precious metals to replace the banknotes.

But make sure you pay cash for your gold, otherwise there will be a digital record of the transaction...