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Comment by bluedevil2k | Hacker News Reader

The big question I wanted answered and this article failed to address is the actual cost of destroying and reprinting bills. Is it trivial and something we shouldn't worry about? Does it cost tens of millions of dollars, and would there be a benefit to finding longer lasting currency solutions? I believe Switzerland uses plastic based currency which lasts much much longer.

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Any changes have to survive the public. The sort of anti-counterfeiting measures that many countries use are not common in the US because the public has very strong resistance to changing the look (must be green!) and feel of our currency. One of the most effective changes is to make larger denomination notes physically larger (since matching the paper is the hardest thing for most counterfeiters, they used to take $1 notes, remove the printing and then print a $20 or $50 on top of the paper).

50 cent and $1 coins are not commonly used in the US due to decisions of the companies that made coin acceptors (the part of the vending machine that takes, counts and validates coins) back in the 1950s and 1960s. Basically, they did not want to hand out 45 cents of change from a 50 cent piece (nor 95 cents change from a dollar coin) so they deliberately chose not to support those coins. Consequently, they stopped being used by many in the public as they were "inconvenient." As those coins became less common, the companies that made cash register drawers chose not to make bins for coins that weren't in common use, so there became no easy way for businesses to take those coins.

The low usage of $2 notes is also reflected in cash register drawer designs - there is no place for those notes, so most cashiers toss them under the drawer along with checks and large ($50 & $100 notes), so the circulation of $2 is very low. I personally like to get stacks of them and spend them instead of carrying $20 notes around. Some places, like at the Renaissance Fair, hand them back as change to the next guy (there is no slot in the till for them) so the next guy gets something they've rarely seen and they get thrilled.

The U.S. Treasury has tried a variety of solutions over the years, Kennedy half dollars, Eisenhower dollar coins, two dollar bills (twice), Susan B. Anthony dollar coins, and Sacajawea dollar coins, that I remember. None have been accepted by the American public. All were to reduce the burden of printing more dollar bills.

When they introduced the Sacajawea dollar coins, IIRC people started hoarding them because they were 'different.' For some reason people though that if they held on to them they would be 'worth something some day' which is a useless thing to think when everyone is collecting them. I think that the fact that they were gold colored didn't help either. People (even if only on some subconscious level) didn't view them as money.

How about a no currency solution? I use credit cards for most transactions over $10. There should be a way to pay for small items with no transaction fee. Real cash will last much longer and payment lines will move quicker.

Why should there be no fee? Square has already removed the fixed portion of their fee so it is just 2.75% (not ~$0.30 + ~3%). This helps with small transactions. Eventually their competition will have to do the same.

Because for some products, that's most of the profit margin gone.

3% is most of the profit margin? Really?

http://biz.yahoo.com/p/s_qpmu.html

HN readers aren't your average slice of America. A large chunk uses cash for everything, and can't get even checking accounts, let alone a credit card.

I didn't say the solution had to be a credit card. There are a few options. I bet most people have cell phones. A quick Google says around 17 million people don't have a checking account. You could sell pre-paid cash cards too.

"A large chunk uses cash for everything, and can't get even checking accounts"

If you mean day laborers or migrant workers, I've seen first-hand some employers now pay them with rechargeable AmEx or Visa cash/gift cards like Green Dot. Keeps the shift supervisor from having to carry conspicuous wads of cash around, and it's directly deposited on their card at the end of the shift, so no need for lineups.

> There should be a way to pay for small items with no transaction fee.

Hm... I'm thinking of something universally accepted, something that doesn't need relatively expensive handling equipment, something anyone can get and anyone can exchange for goods and services...

This something sounds like cash to me.

Call me paranoid, but I don't like the idea of all my money transactions being traceable. It's less that I worry about my bank or government but about, for instance, super-market chains linking my buying-behavior to my bank account or card number.

You're not the only one. There's a sizable underground economy in this country that feels the same way about traceability. Organized crime, drug transactions, and black market goods represent an enormous amount of currency exchange. Even non-nefarious businesses like local laundromats or sidewalk vendors deal in cash with the advantage of being able to skimp on their tax reporting.

It would be interesting to see the effects on these "industries" if we were to move to a purely electronic exchange of money.

The 10 swiss francs I have in my pocket don't seem very plastic, although on the other hand, the colors are... intense. I'd heard about the plastic banknotes in Australia, myself.

I've got some Aussie notes from my last trip in my drawer here. They are indeed plastic. They even have a little clear window in them you can see right through. I'd never really thought about it until now. I don't know if they last longer or not because already some of the ink/paint is rubbing off the 2009 vintage $50 where it gets folded.

Edit: Here you go: they are polypropylene polymer. Wild

http://www.travel-australia.org/money.html

I read somewhere recently that replacing the dollar bill with a dollar coin would save about $5 billion over something like 30 years.

The trick is no one actually wants a dollar coin.

My experience has been that nobody wants to spend dollar coins -- they just collect and hoard them (same with $2 bills).

Nobody else spends dollar coins, so young cashiers sometimes don't even recognize it as currency they have to accept. The government would have to stop printing dollar bills for dollar coins to really see use.

An effect of their rarity.

Which seems a bit unusual to us outsiders, seeing as a lot of other major currencies with value roughly comparable to USD do just fine with coins for 1 and 2 denominations (EUR, GBP, AUD, CAD, NZD).

There's a difference between the workability of a currency system using dollar coins and the desirability of dollar coins over paper money by individuals. For the monetary systems you describe there is no alternative to coins. That the systems "do just fine" is irrelevant to the question of whether or not people who use those systems would prefer to use paper "dollars" (or Euros, etc.) if they were available. I'm sure if the US got rid of paper dollars by fiat it would also "do just fine", but whether or not that's a change the public would appreciate is an entirely different matter.

Indeed. However, I have not heard of any widespread dissent or disapproval of the changes either. The closest thing was the introduction of the 10 HKD coin (in parallel with the bill) which was not popular and is no longer made. Anecdotally, very few in Canada seem to mind, and I'm glad I don't need 10 quarters to do a load of laundry.

I don't think you're going to find a lot of Europeans pining for smaller denomination bills to replace the highest denomination coins. Especially if you show them how disgusting a random 1 dollar bill looks like. I say this having lived through one full currency redesign and one instance of a dozen countries switching to another currency entirely. People had complaints, but replacing notes with coins was not one that I heard.

Apparently there's a difference in priorities. Some people prefer an illusion of no inflation with a greenback as strong as ever. Others might prefer making the high velocity currency units durable and easy to handle.

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