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Comment by ThePhysicist | Hacker News Reader

In the age of corporate and government surveillance, cash has many advantages:

* It can be accepted without the help of technology

* It can be stowed away in a secure place (in contrast to money on bank accounts, which can "evaporate" in case of a bank failure)

* It is very hard to trace and provides a good level of anonymity

* It can be sent through the mail or transported physically form one place to another

And on the less serious side:

* It can be piled up into a giant mountain and burned

* It can be rolled into nice wads and used as props in ganster movies (ever seen a gangster wave around his black Amex in a film?)

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You're missing the most significant advantage to most merchants (in the US, at least): It can be exchanged without incurring any transaction fees. While large businesses see cash management as a not-insignificant expense, small businesses—especially sole proprietors—often don't see the additional effort and risk of handling cash as worse than the 3% they'd lose to transaction fees.

Very good point, how could I have missed that!

Yeah I used to never carry cash, until I started eating at a couple local restaurants that only accept cash

It can be rolled into nice wads and used as props in ganster movie

Apparently Escobar kept most of his money in cash. He had warehouses of cash (!!!!) and was spending a few thousand dollars on rubber bands a week to wrap the cash. Plus he was writing off 10% a year because "rats ate them".

Criminals lead very interesting lives :p

https://en.wikipedia.org/wiki/Pablo_Escobar#Criminal_career

I agree with your other points, but:

> It can be stowed away in a secure place (in contrast to money on bank accounts, which can "evaporate" in case of a bank failure)

Only the amount above €100000 (EU) or $250000 (USA) per bank. Personally, I'd rather trust the combined resources of a bank, their insurers, an insolvency practitioner, and the government with that kind of money, than any safe I could install in my house, or even any safety deposit box provider. I'd also rather not pay the premiums on home contents insurance that would cover a loss of that scale.

That's because you trust the institutions in your country (or USA and the EU).

In both Argentina and my home country Uruguay, money HAS evaporated from ALL banks due to a systemic failure, see:

https://en.wikipedia.org/wiki/Corralito

So far I've had more money stolen from banks (with aid of the government), than from myself or my house (and I've been robbed several times), but I've never had much money to start with.

If you have more than 250.000 in liquid assets, I hope you have many orders of magnitude more invested, I wouldn't store it in cash or in a bank, I'd try to have other assets - I do understand that any kind of assets have risks, in my country housing is very popular because government can't will it away, even if the housing bubble crashes you don't lose everything.

And ask the residents of Cyprus how they feel about that or the UK pensioners who lost money in the Icelandic bank crash.

IIRC, The UK FSCS covered individuals in the case of the Icelandic bank crash. Only people who didn't claim it would have lost money (up to the guarantee, which was lower back then). Not only that, but back then, interest rates on current accounts being at least 3% (and savings accounts being around 4-6%). Nowadays, the difference in interest between stuffing cash in your mattress and putting it in a bank account is negligible.

I don't know what happened to individuals' money in Cyprus. I know there have been problems accessing money held in bank accounts, and the economy is broken after the collapse, but are you sure that money has actually evaporated?

FSCS only covers UK Banks the Uk and Dutch Government steped in to cover the shortfall when Iceland defaulted on their own protection scheme.

So the pensioners didn't lose money in the Icelandic bank collapse, because the combined provisions I mentioned above protected them.

http://www.fscs.org.uk/industry/determinations/icesave/

Looks like FSCS paid out. In fact, they may even have paid out without being asked (8.1)

And here in Brazil, the money people had in the most popular kind of investment (carteira de poupança) was frozen for some time (https://en.wikipedia.org/wiki/Plano_Collor). If you were counting on it to pay some debt (for instance, montly payments for your house or car), you now had a problem in your hands.

It is also hard to verify cash sales at tax time.

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