I was thinking about this last night: the number one need in the virtual marketplace at this point is a fail-safe method of identity protection and verification. A company that can provide the user with an electronic ID verification system, failsafe and redundant, will control the marketplace, much as PayPal does, through providing an intuitive and reliable system.

Surprisingly, the federal government seems to agree with me: they have required that banks develop "two-factor" security systems by Q4 2006. The system banks use now is one-factor: to access your account, simply enter your self-created password or PIN. Two-factor requires independent verification through a redundant system. The most reliable ideas are biometrics and constantly refreshing passwords like those provided by a VPN SecureID. Of the two, I think biometrics should eventually become the verification of choice, but obviously we're a ways out from seeing that happen--technology like fingerprint readers or retina scanners would have to become standard equipment on any computer used to access a bank account. Nevertheless I suppose even this method could be hacked.