The Impact of Solar Flares and Coronal Mass Ejections on Electronic Payment Systems

A major solar flare event, known as a Coronal Mass Ejection (CME), has the potential to disrupt our electricity network. This is a significant risk that is often underestimated. The question then arises: which parts of the financial network rely on the electricity grid?

Leverage on the Electrical Grid

Core infrastructure, such as banking systems and ATMs, likely have uninterruptible power supplies (UPS) at least in the short term. However, many pathways for electronic payment technology are directly connected to the electrical grid. For example, cashiers and servers using laptops are often just plugged into a wall electrical outlet. This dependency creates a vulnerability during a prolonged power outage.

Backup Power Solutions

Some pathways for electronic payment technology do have backup power, particularly in relation to cell phone networks. Many cell phone companies have backup generators in some areas, but not all, and not indefinitely. The extent of backup power varies widely and is a mixed bag across different regions and companies.

The Extended Outage Scenario

It is interesting to consider the scenario of a prolonged and widespread power outage. In such a situation, the availability of electronic payment technology becomes a critical issue. While you can’t eat or drink virtual cash, it is the means by which goods and services are transacted in modern economies. The real challenge may not be a lack of means to pay, but a lack of products to pay for.

Alternative Payment Methods

Some people believe that gold might serve as the accepted medium of payment in emergencies. Indeed, this has been a long-standing backup plan in times of economic uncertainty. However, in an extended outage, the problem may be more about the supply chain than the mode of payment. Without the electricity and infrastructure to support it, the entire system of production, distribution, and consumption comes to a halt.

Conclusion

Understanding the vulnerabilities in our electronic payment systems and planning for alternative methods or backup solutions is crucial. The effects of a Coronal Mass Ejection and prolonged power outages can disrupt not just the financial network but the entire economy. It is essential to prepare for such events to mitigate their effects and ensure continued access to financial services.