A cashless society is also a society where there is no longer any anonymity
This is what concerns me the most. I think most of what this article proposes is great, but knowing that absolutely everything I buy can be traced back to me makes me uncomfortable.
> Banhof, says a digital economy also raises privacy issues because of the electronic trail of transactions. He supports the idea of phasing out cash, but says other anonymous payment methods need to be introduced instead.
> "One should be able to send money and donate money to different organizations without being traced every time," he says.
Whatever one may think of systems like ecash or bitcoin, it's disappointing to see a journalist writing as if nothing like that has even been conceived.
I expect that tracking every single transaction would be a great deterrent to corruption, theft, and tax evasion. On the other hand, a lot of corruption, theft and tax evasion already occurs with electronic payments.
No? Money simply has a signature. The major reason why cash is "anonymous" is because there is no attempt to track the serials beyond initial deliveries to financial institutions, etc. Money already is simply pseudonymous; if, for example, we tracked serial numbers during transactions, you'd be trackable unless you exchanged currency outside of a bill reader setup.
But this is true of electronic systems as well. I could just as easily give you an SD card with $1,000 on it and the tracking system would fail rapidly.
"resulting in over $8 billion in transactions that never would have occurred otherwise."
Yeah, sure! Am I the only one who thinks this article feels a little like pro-fiat PR for an era where central banks are "printing" ad-infinitum to indebt future generations to address the current political expediency? Something real to back your wealth? Bah! Promises to repay stored in a computer system is the only way.
Someone should post this on zerohedge and see what kind of responses you get!
Consider the scale of the money supply as managed by a central bank using fiat money. Consider the fraction that's not already electronic, paper currency. Do you really think that turning that to electrons will make a difference?
And when you get down to it, all that makes assets like "gold" (and other commodities) valuable as currency is the promise of being able to exchange it for something in the future. (Unless you were planning to do something useful with the commodity itself, which seems mostly unlikely.) Whether this promise is actually more credible than your favorite fiat currency is a discussable matter, but not perfectly clear.
What about reliability and security? How do you buy food when the computer system has crashed. (Or the banks have collapsed?) Even paper fiat allows you some robustness to this. Precious metals even more so.
People could just use other currencies (like USD) for their cash transactions then. I imagine this could be made illegal too, which only gets more alarming.
Is there no value in a government that knows less than everything about their citizens?
A technological solution to a social / economic problem? I don't think so.
It's like the people talking about how micronations like Sealand will solve social problems. Nup, you can go to a country with fewer laws now (Somalia?) if you want to live in an anarchy. Guess what - there's still people, and all the problems people tend to make for themselves.
You can buy foreign currency from many banks. You can even create your own pseudo-currency (though it may be illegal). Good luck using it.
Micro-payment proponents haven't yet found a cure for stinginess.
Crime is a factor. A lot of criminals will just find other payment methods, like the online payment rings that already exist (how else do spammers get paid?). It will cut the theft of cash, and probably cause more theft of mobiles / identity theft. If your mobile phone is your wallet, that won't stop a pickpocket from taking it.
As for all the "fiat capital" arguments .. no-one is seriously going to think it changes everything. All major currencies these days are fiat, and online ones will be no different. They can be effectively backed by gold and / or oil (just like current ones are / are not depending on whose cool-aid you're drinking), but I wouldn't bet on them being any different.
It will be nice to be able to order a coffee using a mobile phone at somewhere other than Starbucks. It won't be a revolution.
Cashless or cash is not a distinction about technology, but a property of money.
If something is cashless, that mean it is under the custody of third parties. When something is cash, it means that the control belongs to you.
This marks the distinction between bitcoin in your wallet versus bitcoin on a wallet controlled by a bank. Or having paper bills versus having money in paypal.
No, no. We all know that printing money is the secret to prosperity. OTOH, going completely cashless will make it a lot easier to do just that, so maybe it will help.
Oh, I didn't mention for whom it is the secret to prosperity, did I?
Don't forget that human beings treat abstractions of money differently the more levels of abstractions there are layered on top.
More likely to steal it, spend it and a bunch of other things. If you want more fraud, more waste, and people more likely to spend it on a whim then this is the direction to go I suppose.
On the other hand tech could be used to make things more visible. Imagine your phone warning you that your cutting it a little close on your eating out budget this month.
Yeah, there are definitely some upsides. Especially with reminders and graphs and planning and all the stuff applications are good for.
The downside is, if the neuroscience research is correct, more of a disconnect between actual value and the money system. Where more people will steal or embezzle and risk assessment abilities get even worse than they already are.
Combine that with the surveillance opportunities, which is the more obvious concern, and it just seems like something to be careful of. One reason I'm glad the bitcoin experiment is going on now. An alternative to giving all my financial information to google and cell phone companies (because everyone loves how ethical their business practices are) deserves more people working on the problem.
Why is this being downvoted? Besides the "reliable" typo geezer makes a good point. Cash doesn't require electricity, or run out of batteries, or require an Internet connection, nor can it be cracked/hacked/etc. From a pure usability standpoint, cash would seem to be the more convenient option.
(I'd rather be robbed of my wallet than forced to make large transactions out of my Networked bank account.)
I don't know how the US-designed versions of NFC work, but the NFC (mobile suica train pass/7-11 nanaco/yodobashi point card) on my Japanese phone works even if the battery is removed completely.
Agree with the concerns about privacy, but I also wonder what happens if I visit such a country as a tourist. Do I have to buy a pre-loaded device on arrival, or do I use my existing phone and pay whatever fees my operator sets?
Here's a counter-point. A cashless society enables dominant private parties and government to introduce friction when and where they chose.
"Your payment cannot be processed."
We saw this recently with the Wikileaks contributions embargo. We've seen it codified in legislation such as (but not solely) SOPA.
So... it may be very convenient to swipe, bump, (grind?), whatever... until it isn't.
I'm certainly not the only person to think of this, In any number of otherwise insightful science fiction stories, cash lives on -- sometimes as a black-market economy, but not only for nefarious activities.
This is what concerns me the most. I think most of what this article proposes is great, but knowing that absolutely everything I buy can be traced back to me makes me uncomfortable.