Don’t show me the money: Why eliminating cash may be the secret to prosperity
washingtonpost.com
washingtonpost.com
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.
Where Bitcoin does improve over the centralised system described is that you cannot arbitrarily lock someone out of Bitcoin.
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.
> 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.
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!
For reference, in the US, http://www.federalreserve.gov/releases/h6/current/default.ht... (That's ~$1028 billion in currency, of ~$9755 billion in M2, to say nothing of other assets.)
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.
Is there no value in a government that knows less than everything about their citizens?
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.
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.
Oh, I didn't mention for whom it is the secret to prosperity, did I?
Details, details.
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.
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.
(I'd rather be robbed of my wallet than forced to make large transactions out of my Networked bank account.)
"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.