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Will Cash Disappear? (nytimes.com)
34 points by known 11 months ago | hide | past | web | favorite | 75 comments

Cash has diminished so greatly over my lifetime. When I was a kid, I remember my grandfather would carry over $1000 in cash on business trips, since he could charge basically just the hotel and some restaurants. Even at hotel and restaurants, tips were cash only. He would keep maybe $100 in his billfold and the rest would be 100 dollar bills hidden about his person.

This was the mid 80s.

$100 in tens and twenties would be nearly $300 in twenties and fifties. Ten 100 dollar bills would now need to be thirty (or we would need a 300 dollar note). If my grandfather went on three trips in the same calendar month, inflation adjusted for 2017, he'd get audited by the Bank Secrecy act ($10k in cash transfers in the same month).

For cash to get relegated to a curiosity at this point only requires the government to not change anything (larger denominations, increase the limits for triggering money laundering audits &c.)

This highlights a really fascinating problem that I'd love to know more about, if anyone has info:

Are regulatory thresholds (cash or otherwise) pinned to inflation or some kind of purchasing index? Do they all just tighten around our neck at ~3% year? I'm not cynical enough to assume this is by design, but perhaps am enough to think that once it's in there, the bug becomes a feature in the eyes of regulators.

In the US, most aren't, but some are. When they are tied to inflation it's usually the CPI.

In some cases not tying it to the CPI appears to be lack of foresight, in other cases it's a compromise, just like e.g. tax cuts that expire.

The party that wishes to not raise the threshold is hoping that they will have more political clout down the road, the party that does have power can conserve political capital and get a "win" in the eyes of their constituency.

On an earlier go-round with this topic here on HN, somebody said that cash matters because it means that nobody else can stop your transaction. Credit cards, checks, Paypal... in each case there's a third party that has the power to block the payment, but with cash, nobody (other than the two parties involved) can do anything to block it. That can be a really big deal, in some circumstances.

I forget who said it, or I'd give them credit...

Yes, this is the largest benefit of cash. It's cash. If it's in your possession it's yours. You spend it, and barring an incredibly sophisticated and targeted program against you, it's not trackable. You can decide to give it to whomever you like, and no one can tell you no.

The war against cash will end in tears, in my opinion. I simply don't know why everyone is running pell mell (and on HN - assisting in the building of) towards this cashless future where every single penny you spend is surveilled and gate-kept by multiple parties.

At least Bitcoin gave us a glimpse of hope for "Digital Cash" but of course is very unlikely to turn out that way (plus it's proven pseudonymous is not anonymous enough).

That's why I'm interested in Monero. It's fungible and private, so nodes (master or otherwise) wouldn't know which transactions to block.

If fiat evolves to digital-only, Monero will be the only digital currency you can spend without having banks or payment processors know all of your personal, financial details.

I'm certainly interested in XMR (Monero) as the only other crypto aside from Bitcoin I think is worth paying attention to.

However I don't think it's the final form. Some of the papers on tracking anonymous XMR transactions are a bit troubling, and I think there are some major scaling issues as well. Additionally all transactions must be anonymous or none are I think is a hard design goal.

I can't say I've had enough time to really research it though - I like the goals behind the project, but think the execution may need some work.

When reading those papers, pay attention to which transactions they are referring to. Some of the early transactions I believe are linkable, but the newer ones are not as RingCT and other features went from optional to mandatory.

Check out https://getmonero.org/2017/04/19/an-unofficial-response-to-a...

> I'd give them credit…

I’m guessing they would prefer cash.

I guess they would. But I can't, because I didn't keep a cache...

OK, I'll be going now.

If my understanding is correct, cryptocurrency transactions cannot be blocked either. So this advantage may not be exclusive to cash, assuming you have an internet connection.

This is true in theory, in practice most people will eventually want to convert to a fiat currency, which means going through an exchange, which can be regulated.

It is possible to use something like local bitcoins to exchange coins for cash, but it's extremely inconvenient and more expensive.

Right now the median BTC transaction fee is about $10. I don't think many people would accept that on every transaction they do. Any way around it (pooling transactions for example) would mean losing the 'cannot be blocked' benefit.

The transaction fee for Bitcoin Cash is like ten cents. High transaction fees have nothing to do with crypto currencies fundamentally.

Except that they do. Right now each Bitcoin transaction uses the same amount of energy as the average household does in a week (255 kWH according to https://digiconomist.net/bitcoin-energy-consumption which is more than I personally use in a month). Even assuming you're mining with very low-cost electricity ($0.04/kWH) that's $10.20... or about the cost of a BTC transaction according to the grandparent post. This high energy use is the cost of being decentralized, centralized systems like Visa, Mastercard, and ACH use much less energy per transaction than that.

There are multiple existence proofs that you are wrong: Bitcoin Cash, Ethereum, etc.

> cryptocurrency transactions cannot be blocked either

But could you flood the blockchain with bogus transactions, making it hard for everyone to use it?

Not bogus (those are pretty trivially rejected by distributed nodes), but you could certainly flood it with valid microtransactions, and thus jack up the fees people have to pay to get their tx validated in reasonable time. This activity, way more than actual block size limits, underlies the ridiculous fee escalation on BTC that someone else mentioned.

Cash has other advantages - speed and anonymity.

And as people in the business of porn, or cannibis, (or other such endeavors which some people morally object to) have discovered, lots of payment processors/banks/etc. will not deal with them.

It probably will, for the most part, and, along with it, a little corner of privacy. It's a small one, and defeatable, but it takes effort on the adversary's part to gather that info, rather than being real time and retrievable at whim.

> It's a small one

I beg to differ. No cash means:

- kids will have even less opportunities to be kids. We are creating a word where they can't screw around. It's terrible for their growth.

- you have no workaround for any situation that doesn't fit the box perfectly. No way to speeds things up. Removing by passes mean a rigid and unforgivable system.

- you remove any possibility to try alternative systems, since by definition alternatives don't work in the way the current one does. Actually they often offend the current system. But you need those alternative to exists over-wise, you get stuck.

- of course, it also means morality is going to become law. Unable to hide, people leaving differently will be exposed.

- you'll get dependent on electronics. It means you need to have the privilege to have access to equipment and services otherwise you are excluded from society. Also in case of infrastructure failure, society is on hold.

This not a "little corner of privacy", it's "a huge part of what's allow us to function in this imperfect world".

An imperfect system needs workarounds. It's very important. Otherwise you'll get worst than a Gilliam's Brazil dystopia.

> kids will have even less opportunities to be kids. We are creating a word where they can't screw around.

How is the screwing around related to cash? Can you elaborate?

> An imperfect system needs workarounds.

Can you give an example?

> How is the screwing around related to cash? Can you elaborate?

Kids need to do forbidden things hidden from adults to grow. They need experiment. Make mistakes. Create their own set of values and ability to solve problem independently. Without cash, it increases the number of things they can't do without their parents. E.G: buying birth control, consuming illegal products, going out in places the parents disagree with, etc.

No parents are perfect. All of them are wrong on some things, and have some kind of unbalance in the way they interact with the children. It's life. Growing for kids mean learning from their parents, and learning to distance themself from their parents. Two sides of the same coin.

> An imperfect system needs workarounds.

Say you are in an saoudi dictatorship. Without cash, paying for drinks at a secret gay bar becomes very hard. It's the same for us. They are many things our system frown uppon. That doesn't mean it's bad.

Another thing: you are an administrator, and you know you can fix the school door now with cash and create a fake paper trail later. Or pay the right way and wait 6 months.

Obviously our system should be fixed. Cash is not the solution. But changing the system is a hard, long and unreliable process. So meanwhile, cash helps to get along.

> Without cash, it increases the number of things they can't do without their parents.

I always had a debit card and bank account, and in my teens I withdrew cash and spent it. You are probably right that I would have thought twice about some of those spends if I knew my parents could see the transactions (which they would since I wasn't 18).

> Say you are in an saoudi dictatorship. Without cash, paying for drinks at a secret gay bar becomes very hard. It's the same for us.

Can't disagree here: eletronic money with a paper trail requires not just stable and trustworthy government and public institutions, it requires some trust also that future governments and institutions are trustworthy. The tradeoff between convenience and privacy is always a factor, and if lack of privacy is lack of security then the choice is clear.

I think the solution to many of these problems is simply "cash on card". You have a debit card connected to your bank account, but you can transfer a sum to "virtual cash" on the card. That then works like cash, but without the cash. It could be cryptographically based for example, and would mean the receiver of the transaction doeesn't see the source. And on a statement from the account it only shows up as the withdrawal when the e-cash was purchased.


- The network connection is down or there's no cell reception for the credit card reader

- Your credit card/electronic payment got declined for some random reason

- You leave a Christmas tip in a box

- You have reasons for the transaction to be off the books

You can argue about any of these but certainly today, I've encountered at least these four situations within the past year.

One data point: As a Canadian, I rarely have cash in my pocket. I can go months at a time without handling cash. Mainly I encounter it these days when I buy & sell stuff privately (via Used.ca or Facebook or whatever). Otherwise I basically use Visa/Apple Pay for everything.

America really needs to get its retail infrastructure upgraded, but it's not clear who is going to pay for it. A lot of companies have old computers that use magstripe readers for their point-of-sale systems. A lot of businesses have new card readers, but the NFC and/or Chip is turned off (covered with tape saying to not use it) because the attached cash register isn't certified or something.

In Canada, there is an oligopoly of banks, so they just agreed to force everyone to upgrade to Chip and PIN and/or Contactless.

This is hardly my experience at all. Maybe in the first ~6 months after they rolled out the chips nationwide, but not anymore.

How are our experiences so different? I just got back from a trip to New York, and at least half of the retailers I visited didn't have (or use) a chip card reader.

Beggars are gonna have a very hard time.

I've seen a panhandler (in the US) flying a sign sporting a GoFundMe campaign URL.

I could see phone-to-phone contactless payment becoming commonplace in the same scenario.

Here in Las Vegas, beggars already ask if you can VENMO them a dollar.

They usually have VENMO, PAYPAL, and the CASH app.

I even met a beggar once who had a stripe terminal and could swipe your card.

Edit: Ok, actually the last one is a joke. But not the first 3.

Sweden is effectively the most cash free place on the map, and there is no shortage of beggars. Not really sure how this works.

Interesting thought experiment. If beggars accepted NFC payments I bet they'd make a lot more money.

I don't want to go cashless and would like the return of the $500 dollar bill.


I’d settle for $100 bills for travel not being a hassle to obtain. Go into a teller and they often don’t have any or at most one or two in many banks.

Also, many stores in Sweden does not accept cash.

All stores I have visited the last year accepted card or Swish but around 15 % of them did not accept cash. The argument is that cash is expensive to handle and it increases the risk of robbery.

I have only heard about some old people (bank trust issue) and people with economic problems (no credit card) that feel like this is a problem.

This is a good article, with a particular focus on Sweden: https://www.newyorker.com/magazine/2016/10/10/imagining-a-ca...

It's beginning to happen in the US, too. One of my favorite restaurants, Sweetgreen, no longer accepts cash, and I'm boycotting them. I'd like the option to make an anonymous transaction, and I worry that we're entering an economy where those without access to banking services are excluded.

>One of my favorite restaurants, Sweetgreen, no longer accepts cash

Is that a prepay restaurant? If the restaurant lets you pay after you finish eating, then by law (31 U.S. Code § 5103), cash is legal tender for settling your debt. However, the restaurant is not obligated to provide change if you do not present the exact amount due.

It's pre-pay.

You could use a prepaid visa gift card or similar for (mostly) anonymous transactions.

Those are also helpful for people who can't get bank accounts.

We do SaaS and we block prepaid cards -- too much fraud.

$5 fee for a $50 card? No thanks.

Ironic restaurant name

I was in Sweden last week and this caught me by surprise. A significant number of the restaurants and shops I visited had signs indicating cash only.

I'm used to the US pattern where businesses prefer cash, to the point of refusing to accept any cards at all, because processing fees cut into their margins.

It's also comparatively easy to accept cash off the books, which makes it tax-free.

I'm 99% sure that's why my favorite bar refuses to take cards.

OTOH they had a break-in and someone walked off with their safe that had like a week's worth of cash revenue in it. Almost put them under. You'd think they'd consider taking cards after that to reduce their risk, but nope.

The legitimate reason not to accept credit cards is to avoid the substantial processing fees.

I'm not sure it's legal to refuse cash in the U.S., but I still can't remember the last time I used it anywhere but a pop-up food stand.

It's quite legal to refuse cash as payment in the US. You can demand payment in ducks if you so choose, and no one can force you otherwise.

Where folks get confused is that it is a legal requirement for you to accept cash if I'm settling a debt with you. If you were to run up a $50 bill at the gas pump, then go in to pay with your $50 bill they'd be forced to accept it or let you walk. Trying to convince a cop of that may not be the easiest thing in the world though...

Yeap, it's legal: "There is, however, no Federal statute mandating that a private business, a person or an organization must accept currency or coins as for payment for goods and/or services. Private businesses are free to develop their own policies on whether or not to accept cash unless there is a State law which says otherwise."


However, some states apparently block it. For example, there's a law in Massachusetts that apparently prohibits accepting credit only.

It is legal as long as they tell you upfront. They cannot take your order, prepare it, give it to you, and then force you to use some unexpected method of payment.

Anecdotally: There is a chain chicken sandwich spot in my building in downtown SF that is strictly debit/credit only.

It is OK when you pay upfront.

In my lifetime I doubt that cash will go away, even in the highly developed countries that I've lived in. In the US and Europe it's used in smaller transactions, like a concert or dance event, where paying with card is significantly slower than cash, and beyond that you can definitely find cash only places, especially outside of a major city. If you travel outside of the US or Europe, many places deal only with cash, like Thailand or central Asia. I know that it's posited as better against corruption, but there are still some people that don't want a bank account and would prefer checks/cash for their pay and I don't see that going away anytime soon unless it becomes illegal (which won't happen).

People that buy and pay for things online don't (and mostly can't) use cash. So without separating out the online and offline purchases this could be misleading.

I do so few transactions offline that I just use cash for those few, low value, transactions. Since there are many places in the physical world that just take cash I might as well just use the one thing. I have a working debit card (the bank pretty much insists) but the added convenience isn't worth the low risk of getting it skimmed and the small loss of privacy.

Eventually we will have to start making a distinction between electronic cash and the physical kind. Cash is still a distinct sort of thing, no matter what physical form it takes.

One thing that comes to mind after reading all the comments, is the seemingly very healthy and lucrative ATM business. Also, in the US, cashier's checks, money orders, and sending money via services like Western Union accept cash only. Most? state lottery sales are cash only as well. With these industries and use cases, i lean toward the notion that "cash is king" and will exist as paper notes and metal coinage for another 2 or 3? decades.

On a funny note I showed this slide in a talk about why mobile payments will never replace cash and cards: https://i.imgur.com/l8OyoeD.png

Man, I drove through Chicago recently and all their toll booths are cash only. I hope this change goes nation wide fast

Na, the whole north east United States uses an active RFID transponder system that is compatible from Illinois all the way to the east coast and from Maine all the way down to North Carolina. You just stop in at any store in IL that sells the, many grocery stores do, and buy the transponder for $10 and link it to your credit card. In IL it is called "i-Pass" in other states it is called EZ-Pass but it is all the same thing and inter-operates.


I'm sure there are still cash booths yes, but they all take I-PASS now.


They had electronic tollbooths (fasToll or EZPass or whatever) when I last drove through there around 2003. Definitely not cash only.

Interestingly enough you cannot pay cash or credit on some toll roads in southern California now. If you don't have one of those transponders, then you pay online, and they enforce with license plate scanners.

That water's way past the bridge. The strong trend is hugely toward eliminating all cash at toll booths. It's also largely academic from a privacy perspective because they're taking pictures of your license plate anyway.

Yes, exactly.

The toll roads in Illinois aren't actually cash-only. They just don't accept credit cards at the toll booth because of the long transaction times.

If you want to pay by credit card, just go through the toll booth. You get 7 days to pay via credit card or personal check with no penalty!

[1] https://www.illinoistollway.com/tolling-information/unpaid-t...

That would be so awesome, but even in the tech-centric bay I still come across lots of cash only places.

Not awesome for those value privacy. There are companies out their building profiles about you based on what you buy.

Target may know when someone is pregnant even before that person tells her own family.

I live in provincial NZ and I never use cash. I don't know if being a tech-hub has much to do with it.

Cash is pretty popular in Puerto Rico right now. I doubt it will disappear.

Disaster is both a good time to have cash, and a bad time. Cash could be destroyed or lost. And most of us don't have "cash" we have bank accounts and ATMs. By the time we realize the disaster struck and the infrastructure is gone, the ATMs are already empty.

It might actually be faster to get cell phone networks back up than it is to get the infrastructure behind ATM's back (roads, people distributing money and so on). So until then, only the preppers with enough cash for a long period of time have cash. That said, if I lived in an area where there was any risk at all of flood, earthquake or tropical weather, I'd have a large wad of cash somewhere.


So, that's a yes?

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