
The Death of Cash - JacobAldridge
http://www.bbc.com/future/story/20150724-the-truth-about-the-death-of-cash
======
DominikR
The push to abolish cash isn't about its supposed archaic or primitive nature,
it is all about power and nothing else.

On the one hand the state would know about every transaction made, on the
other hand the state would hold immense power over its citizens by being able
to flip a switch and shut certain persons out of this system. (by freezing
their accounts)

And then there's another aspect: In a cashless society only the ones that have
jobs or can afford to incorporate a business could earn money. All the others
would have to barter with smuggled cigarettes or vodka and even then they'd be
unable to pay their electricity bill with whatever they've earned this way.

In tough economic times there are many people that cannot get a regular job
nor can afford to incorporate a business, and working illegally on
construction sites or something like that has traditionally been a way for
them and their families to survive and work themselves out of the gutter.

If you take that away from them, they'll have to fully submit to the social
system and I honestly doubt that this is a better way.

Our western societies are slowly turning in a modern version of the Soviet
Union, where the state has even more control over its population and its
thoughts than the Soviet Union ever had.

At least the Soviet Union had the decency to grant the masses that stayed
clear of politics a safe life without a care in the world.

Here in the West they are not even willing to give us that for giving our
governments absolute control. The masses at the bottom have to struggle for
mere survival.

~~~
overpaidgoogler
While I agree with most of your points, I think the informal economy mainly
exists for tax avoidance, and not because very short term jobs involve an
onorous amount of paperwork. If this is correct, then those jobs would still
exist in a cashless society, it's just that they would have to pay tax.

~~~
brandonmenc
> I think the informal economy mainly exists for tax avoidance

Garage sales and lending your buddy five bucks are also part of that
"informal" economy. Without cash, the government would be dipping its beak
into those transactions as well.

~~~
Retric
The governent already ignores small electronic transactions as not worth the
time to collect. I don't see how a cashless economy changes this.

~~~
tsotha
They used to ignore cash transactions for the same reason. The advance of
technology makes everything cheaper, and sometimes that's bad.

------
nostromo
Cash may not always be so anonymous. It seems plausible that banks at some
point may start tracking bank notes by serial, or some other method, which
would be very useful for law enforcement and the IRS.

Example: Alice withdraws $100 from an ATM to buy illegal drugs from Bob, who
then deposits it in his bank to pay rent. Bob is later found guilty of
distributing drugs. Law enforcement could now request from his bank his
deposit history, including bank note serial numbers. Repeated deposits of
banknotes that were last seen from Alice could lead investigators to her door.

It's the kind of big data tracking scheme that 10 years ago would be
impossibly hard to do, but with today's technology wouldn't be so hard.

~~~
pcr0
That's honestly trivial to thwart if you're aware that such tracking exists.

Alice can just withdraw a big note and break it up by buying a coffee, then
use the change from that transaction to buy the drugs instead.

Granted, some extra creativity would be required for drug purchases involving
large amounts of cash

~~~
9872
That thwarting is honestly trivial to counterthwart without even trying. The
register at the coffee shop knows which note Alice paid with and which ones
they gave in change.

~~~
tsotha
If I buy coffee at Starbucks with a $5 bill, and you come in later, pay with a
$20 and get my $5 in change, in order for the government to follow the money
like that Starbucks would have to scan every bill and correlate the scans with
individual transactions. Even if people were okay with that (which I doubt),
it would be a costly imposition on businesses and a huge time waster for
everyone.

~~~
9872
Until it becomes standard in all registers.

~~~
tsotha
Doesn't matter. You'd still have to feed the bills, individually, into some
kind of scanner.

------
Fishman343
I still only use cash everywhere it is possible to do so. Handing over a
physical wad of cash or breaking into a £20 note is a mentally painful barrier
that stops me spending any more than I have to. For me at least, handing over
a piece of plastic and typing in a PIN doesn't carry the same weight yet.

~~~
ck425
I do the same. Having to find an atm is also good at stopping me from getting
money out for small spends like coffee or cake that I really don't need.

------
dcposch
> People value cash differently than they value electronic money, even though
> the two have the exact same value.

Except when they don't. To a Greek, 100k EUR in the bank today is worth _some
percentage_ of 100k EUR. His account is illiquid. There are currency controls.
There may or may not be a "deposit haircut", like in Cyprus, where the numbers
in the databases were simply all reduced.

By the way, I'm very curious what the percentage is. The Greek guy certainly
can't withdraw his 100k EUR retirement savings as cash, nor can he transfer
them outside the country. He can still wire the money to another customer at
the same Greek bank though, right? Say he finds someone on Craigslist who's
willing to give him 90k EUR cash in return for that transfer. That would mean
one Greek-bank-account-EUR is worth roughly 0.90 EUR. What's the actual rate
right now?

\--

Bank accounts of every kind share an important property: they have
counterparties. Colloquially, money may be "in an account", but in reality,
your account is on the bank's balance sheet as a liability. When you deposit,
you are actually _lending_ your counterparty money.

Some accounts have a reasonably trustworthy counterparty. Others, like a
Cypriot savings account a few years ago, or an account at MtGox for that
matter, did not.

The idea that $X in a bank account is always worth the same as $X cash is a
reassuring fiction.

Counterparties are unavoidable in a centralized system. Counterparties vary in
trustworthiness, and even a trustworthy counterparty today might not be
tomorrow.

\--

I think this is a fundamental advantage of decentralized stores of value,
including paper cash.

------
yc1010
"There is simply no alternative system of payment that is as convenient,
reliable and anonymous. Bitcoin is anonymous, but currently unstable and
inconvenient"

Being a nerd

I have been using bitcoin since 2011, in last year almost on a daily basis,
yes the rate is volatile but this will not be an issue once more people use it
and the number is growing for sure (especially in the last few weeks alot of
females joining the community due to backpage.com visa/mastercard ban), before
this months rise the rate was remarkably stable for almost half a year

As for "convenience" i find bitcoin a lot more damned convenient (and secure)
than credit cards and delighted everytime i see it as a payment method, all i
have to do is scan a QR code with my mycelium android phone wallet and send
bitcoin with few taps, for storage I have a tiny USB hardware wallet (trezor)
on my desk which keeps the private keys safe even if my computer gets infected

~~~
StavrosK
150% agreed on the convenience. It's just far and away the most convenient
method of electronic payment right now. Bar none.

However, how are you using it daily? I struggle to find places to accept
Bitcoin.

~~~
yc1010
I get paid by a trade partner in Singapore almost daily with bitcoin, saves us
both a large chunk (and time) on wire transfers!

I also rent out some of our servers for bitcoin (via bitpay) since there is no
chargeback risk server (looks sideways at paypal/credit cards) of someone
renting the server for a month and then leaving me with pants down at ankles
and no money.

As for spending bitcoin:

* I have been buying all my hotels for a year now with expedia.com

* All my shopping at amazon.com been via giftcards bought at gyft.com, same for amazon.co.uk and giftoff.com, there are many other places they sell giftcards for but these are the main ones i use every week.

* For testing/deployment VPSs I have been using vultr.com

* I pay regularly my utility bills like electric, phone, water using bitwa.la

I even done a localbitcoins meetup and sold bitcoin for cash in last month, we
had a great time having a coffee(s) and nerd chat during the trade :)

~~~
StavrosK
Interesting, thank you. I was just looking at expedia, but I saw some horror
story articles which made me think that their Bitcoin integration is a second-
class citizen. Unfortunately most of the services are US or UK only (it's hard
living in a place with no Amazon :p).

~~~
yc1010
Oh I am in Ireland, dont get me started on Amazon (its hit and miss at times
when it comes to deliverability)

As for Expedia their integration could be better (need to use a US ip for
coinbase payment option to even show up nowadays) but had no issues spending
thousands with them, if it wasnt for bitcoin I just use any of their dozens of
competitors, so one little change and they got a loyal customer. I heard of
cheapair.com accepting bitcoin for flights but I have not tried it yet

that reminds me: VPN from purevpn.com :D bought with bitcoin as well for
wathching BBC etc and surfing more anonymously

------
thirstywhimbrel
Funny, I was just reading an article about WIRED's startup of the week,
Velocity, an app pushing for transactionless restaurants, kind of the same way
Uber takes the payment step out of cabs. (ie, you still pay, but it's not a
big process.)

BBC focuses on BTC, but maybe apps are the best path to the death of cash.

Of course you never truly get rid of an anonymous fungible medium of exchange.
There were a surge in Tide detergent thefts starting a few years back, to use
it as a currency.

1\. [http://www.wired.co.uk/news/archive/2015-07/24/startup-of-
th...](http://www.wired.co.uk/news/archive/2015-07/24/startup-of-the-week-
velocity)

2\. [http://www.theatlantic.com/business/archive/2012/03/why-
are-...](http://www.theatlantic.com/business/archive/2012/03/why-are-
criminals-stealing-tide-detergent-and-using-it-for-money/254631/)

3\. [http://www.businessinsider.com/the-tide-black-
market-2013-1?...](http://www.businessinsider.com/the-tide-black-
market-2013-1?IR=T&)

4\. [http://nymag.com/news/features/tide-detergent-
drugs-2013-1/](http://nymag.com/news/features/tide-detergent-drugs-2013-1/)

------
jbuzbee
Cash is pretty much dead for me and has been for years. My wife and I use a
credit card for every purchase we can, big or small. And we've never carried a
balance, paying it off in full each month. I'm continually astounded at the
offers that arrive in the mail such as "Spend $3000 in the first three months
and get $500 in gift cards" (to places we go anyway). It's free money to us,
paid for I assume by the high rates and carried-balances that others have.

~~~
iwwr
Now think how an average Greek person feels when their banking system no
longer works, denied access to electronic transactions and when bank accounts
hold mere numbers that may or may not be actually recognized (or downright
confiscated).

~~~
cameldrv
It's hard to imagine how the Greek banking system is going to recover from
this. Everyone loaned them all of their money, and they weren't even getting
any interest on it. Now they have to stand in line for 60 euros per day when
it could have been in their mattress the whole time.

~~~
cpr
What's more, with the miracle of credit creation by modern banking, only 5% of
their money is actually in the bank--the rest is out making more money for the
bank.

It's all a consensual hallucination which works only as long as everyone still
has confidence in the system.

~~~
iwwr
It's only an illusion when the central bank is unwilling to inject money into
the system in the event of a bank run. The central bank has to maintain
somewhat of an equivalence between money stored in banks and cash. It depends
on if banks become merely "money vaults" or investment/speculative vehicles.

------
jkot
I was in Greece a few weeks ago. ATMs did not worked, shops would not accept
credit cards. Good luck without cash.

~~~
StavrosK
You must have been to a different Greece, because I haven't seen an ATM that
didn't work, or a shop that wouldn't accept credit cards.

Then again, we do everything with cash, and cards are used for a very small
minority of transactions. Your "good luck without cash" is self-defeating,
because you're effectively saying "I was in a cash-only society the other day,
good luck without cash". All this proves is that cash is not only alive and
well, but king, at least in certain parts of the world.

~~~
jkot
I counted dozens ATMs out of cash in Athens. And technically ATMs are still
not working, since there are strict withdrawal limits. And card did not
worked, otherwise Greeks would just raided shops, buy stuff, and empty their
bank accounts.

And I see no problem in my comment. If cards would stop working in society
which does not use cash at all, it would be even worse.

------
pcr0
Here in Hong Kong we have a contactless payment card called the Octopus, one
of the most successful of its kind worldwide, and the basis for London's
Oyster card.

It's been around for almost two decades now. With the exception of taxis and
smaller shops, Octopus is accepted pretty much everywhere. If I randomly
decided to stop using cash for a month, it wouldn't be too hard.

Nonetheless, cash is still everywhere. Some part due to necessity but mostly
human nature.

~~~
dd9990
"On July 20, Octopus acknowledged selling customers' personal details to Cigna
and CPP, and started an internal review of their data practices" [1]

That does not inspire confidence in me. The government is also the largest
stakeholder in the company and I assume they and their security forces must
love all the data it generates.

[1]
[https://en.wikipedia.org/wiki/Octopus_card#Privacy_abuse](https://en.wikipedia.org/wiki/Octopus_card#Privacy_abuse)

------
AdeptusAquinas
This article, and many of the comments here, seem to be a very UK or US
centric view to me.

I'm from NZ and the use of cash is very rare here. People generally use EFTPOS
cards or credit cards to pay for everything, from coffee or taxis to major
purchases. The biggest annoyance when travelling (especially to the states) is
the need to get out and carry cash again which for me (in my thirties) is
something I haven't done here since my early teens.

Maybe we just fear our government less, but I think we also have a more
postmodernist view: We were one of the quickest to adopt EFTPOS. We also don't
have a weird tipping culture, which helps :)

------
mhuffman
Ask people from central Florida how well things went for those with no cash
when the last Hurricane came through and wiped out all electricity for a few
weeks.

------
alkonaut
From the recently posted article about Uber:

> "Using Uber requires having a credit card, the lack of which, for many
> residents of the Bronx, one green-taxi driver once told me, made getting
> fares there very hard."

What does that mean? Does it mean poor/working class people don't have bank
accounts in the Bronx? Or does it mean Uber requires _credit_ (and not merely
a debit) card? I can see why an unemployed/poor person wouldn't have any
credit, and thus no credit card. I don't understand why that person wouldn't
have just a bank account with a debit card?

~~~
ejcx
There is a significant percentage of the population without banking. The
underbanked and unbanked percent in the US is pretty alarming to me. .[0]

[0] -
[https://www.fdic.gov/householdsurvey/](https://www.fdic.gov/householdsurvey/)

~~~
PhantomGremlin
_There is a significant percentage of the population without banking._

Traditional banks have always despised the poor. Historically this is why
immigrants, union members, and other working class people formed credit
unions.

I don't know why the unbanked can't use those. Something has changed. A
traditional credit union wouldn't kick out a member just because he became
unemployed.

------
copsarebastards
I think the bit about cash versus bitcoin in the beginning leaves out an
important detail about bitcoin: it doesn't require proximity, which can
fraught with risk. In the situation of buying drugs, for example, Silk Road
and its ancestors provide safety because people don't have to go to some shady
house to buy their drugs. I agree that bitcoins aren't as convenient as cash,
and as such I agree with the author that cash is here to stay. But bitcoins
fill a niche nothing else can fill right now, and as such, bitcoins are here
to stay too.

~~~
bdcravens
> people don't have to go to some shady house to buy their drugs

Most people don't go to shady houses, even those with very regular habits.

------
vbezhenar
Cash might be outdated, but I don't like to give all my money to 3-rd party. I
like Bitcoin idea: electronic currency, but I have full control over my money.
Banks can play with bitcoin, providing their services and their pseudocurrency
for microtransactions, but I always feel unsafe when I deposit more than $200.

------
mschuster91
The advantage of cash is that it's not too difficult for a thief to drain my
bank account without traces.

When a thief tries to steal a wad of cash from my home safe though, he has the
risk of leaving prints/DNA on the scene, getting caught on camera or being
spotted by a neighbour.

~~~
rhino369
This is essentially the opposite of reality. If someone steals your cash
nobody gives a shit. No csi team goes hunting them down.

Bank fraud on the other hand is the banks problem. If someone steals your
money the bank makes it whole.

~~~
mschuster91
Huh? I don't remember the Cyprese people who got their accounts drained by the
government ever got their money back.

With cash the cops would have to raid my apartment to get the money (also
likely they wouldn't know about the money in the first place, so no cop raid
there!).

~~~
rhino369
If America was going to give a "haircut," they'd dilute the money supply
instead of just taking 10% from banks.

So yes, uncle sam can steal the money in your mattress without having access.

Or the Fed could release a newDollar and only accept a certain amount of
oldDollars. Russia (I think) has done that once or twice.

~~~
guard-of-terra
"the Fed could release a newDollar and only accept a certain amount of
oldDollars"

2/3 of oldDollar cash is stored outside the US by people who mostly can't
enter the USA without visas etc. And those will be pissed royally.

It would be not wise choice to piss off more people than your own population,
however not never done by the USA.

------
bsbechtel
The discussion here is a story of what happens with every new technology
replacing/disrupting an incumbent technology. Early in every new technology's
lifespan, many predictions are often made that X new technology will kill Y
old technology. However, what is really happening is that X new technology is
replacing A, B, C, and D use cases for Y old technology. However, Y technology
had use cases A, B, C, D, and E, so Y technology still has use case E and thus
still exists. An example of this is the automobile. Horses are still around
today and used by humans, despite the prevalence of internal combustion
engines. This is something important to think about when evaluating new
technologies and their value to society.

~~~
qmalxp
For me, the only use case of cash is "The tiny fraction of vendors who don't
accept debit."

Oh, and I guess under-the-table payments.

------
hukep
Just my opinion. Soon or later we will have to return all the currencies to
the gold standard. The current in debt monetary system is unsustainable.

~~~
anon4
Gold is not inherently valuable. It's useless. That's why it was used to mint
coins in the past, plus the fact that it's hard to get means counterfeiting is
hard. Then people started attaching some mystical value quality to gold
itself.

Debt, however, is valuable. It's a direct expression of things owed and I very
much like being owed stuff. Especially when I can choose what that stuff is
later at my convenience.

------
comrade1
I see articles here every other week talking about the end of cash and I don't
know where they're coming from. This article finally takes a more realistic
approach.

The other articles don't match the reality of where I live (Switzerland). I
don't think they match the reality of Germany and Austria either, and much of
Europe.

People here still pay for their cars in cash. I'm going to my bank on Monday
to take out chf 7k to pay for my wife and mine yearly train passes.

Is this just a u.s. And UK phenomena?

~~~
analog31
I live in the US, and rarely use cash. My spouse and I pay for big ticket
items like cars, by writing a check.

I've visited Switzerland a few times, and noticed that the transit system
(trains, buses, etc.) creates natural places where people go almost every day,
that are convenient locations for things like banks and food stores. There's
nothing like that in most of the US. My bank closed its branch office near my
house, and now the closest branch is some distance away. So it's an extra trip
to get cash.

Now, if I use a check or debit card at the food store, then I can get some
extra cash from the transaction. I also get a little bit of cash from playing
music. My main use for cash is to give some to my kids if they need to buy
something.

Oddly enough, I take $1 bills out of my wallet and leave them at home, so I
won't be tempted to buy snacks from vending machines during the day.

------
7Figures2Commas
The death of cash would ruin Magic City.

------
brickmort
Before clicking through, I thought this was going to be about Johnny Cash...

