Physical cash is dying–and you don't need to be a conspiracist to worry | Hacker News Reader

Physical cash is dying–and you don't need to be a conspiracist to worry

prospectmagazine.co.uk

237 pointsrwmj484 comments

Not using cash means someone gets a cut of a processing fee. Every time, with almost no exceptions.

I’m not down to have rent seeking companies taking a slice of my hard earned money just so I don’t have to manage a few pieces of paper.

You’re generally paying 3-4 percent of every transaction now, as that’s pretty standard for debit cards on businesses, and it doesn’t matter if it’s charged to the card holder or the business, the consumer ultimately pays for it in higher prices. Heck, people pay transaction fees on payments they make the to government because the government won’t take cash.

Do we really need to make not paying invisible fees in everything illegal? Seems crazy.

There were already costs. There were always costs and risks associated with cash handling: armored trucks doing cash collection, risks of money in tills being lost. If it really were a lot cheaper you wouldn’t see businesses clamouring to go cashless.

That’s not to say I think cash should go the way of the dodo, but I don’t think there’s that much difference paying g4s to collect your money vs Mastercard.

IMO the benefits of cash are on the consumer, not the business.

These are even higher for digital, all the associated software development, audits, etc. That processing fee is on top of this, and is easily variable.

You need exactly the same level of software durability for cash handling; see the Post Office scandal, where the computer system was misrecording cash transactions.

I do not think so. Otherwise the British government would not have needed to outlaw charging customers more for card transactions to encourage the move away from cash.

I strongly suspect that the reason cash is seen to be cheaper for these businesses is that they don’t report all of their cash income to their tax authority, rather than because cash is actually that much cheaper.

Alternatively, they were counting the time they spent cash handling as a business owner as zero cost, which isn’t really true.

Those are reasons some people prefer cash, but it does not explain the need to ban passing on card fees.

Someone willing to take the risk of the severe penalties for dodging taxes would not be deterred from offering discounts for cash payments because they broke another law by doing so. They can also avoid the law by not taking card payments at all. I have found that many people in businesses traditionally took cash payments do not take cards but are happy to be paid by bank transfer (which is usually free on both sides in the UK if the sender is not a business).

The value of the time spent on cash handling may be very low. What is the opportunity cost of the time if it can be done in otherwise dead time? It is worth what value they attach to it.

They can't just stop taking cards as they would lose a lot of customers.

Most small places not declaring cash want to stay off the radar, they use tricks like using old cash resisters that don't have trackable invoice ids.

Food places are rife with it as they can claim excess food was thrown out as spoiled.

I work in a bank and cash handling is a major headache in terms of internal control, logistics, reconciliation and AML. It's a large extra cost.

It is much cheaper for the bank and customers to use cards, but where I live the banks own a payment network that does not involve visa and mastercard so the cost is much lower and there is no rent seeking so card use have no fees.

We also have an app for sending "cash" for free to friends, family and businesses that under the hood are just instant bank payments between the accounts.

The issue is, whilst I’m sure that cards are cheaper overall, they present a serious burden for people who can’t use them: unbanked people for various reasons, older people, children etc.

Children and old people here all use cards or apps.

And derisking is illegal, so you have to provide a bank account and cards to anyone who wants. The high risk customers just need more follow-up on terms of AML.

Where are you based where derisking is illegal? Here in the UK it makes the news fairly frequently when someone notable becomes unbanked because of CIFAS or SARs or similar.

Also, I wasn’t able to get a debit card until I was 12, but perhaps that has changed over the past few decades.

I live in Norway.

My kids got a card at around 5, but they are older now. Not with visa/mastercard of course :)

Sounded like Italy. Same exact situation. The interbank payment consortium even created a cashless payment system called “Satispay” that lots of consumers and small retail businesses use on a daily basis.

Hmm in Finland it seems there is "Basic" card. Which I think is technically just more limited VISA debit card. Preventing such things as overdrafts.

Every EU country is required to have laws providing for some level of basic account.

It rarely makes the news and it happens all the time, but usually because people don't see fraud as criminal until it catches up with them.

I'm in the UK, and while regular banks don't generally provide debit cards at low age, providers like Go Henry specializes in accounts for kids with built in parental controls from age 6. They are effectively prepaid visa cards with app access for parents to top up instantly.

With respect to closing accounts, there are extremely few cases where people can be denied a basic account with the largest banks, but most smaller banks are not required to provide a basic account, and other account types can be denied at will, and most people have other accounts types (there are something like 7 million basic accounts).

If you’re homeless (and esp. if lacking ID), getting a bank account is a pretty tall order.

Cash is not illegal here, in fact shops are required by law to also accept cash.

However the homeless problem is virtually non existent in this country, same with the lack of id.

It's just so much more convenient to use digital payments that almost nobody use cash anymore.

Discussions like this on reddit/HN always get stuck in this loop of people projecting how things are in their part of the world onto the rest of the world and assuming everyone has the same problems/challenges/tradeoffs.

Older people/Children are not a problem. I've seen both using digital payments for a long time.

Unbanked people is more concerning, as unbanked people include political enemies of the state. The centralisation of power that digital payments allow is concerning.

The other thing which isn't mentioned in this comment chain is that a reason credit is cheaper is that your transaction data is harvested.

Some quote! "I work in a bank and cash handling is a major headache". Doubtless but perhaps we should reconsider the larger purposes of the banks in relation to their customers.

The biggest reason for banks to exist is too provide "grease" for the economy, i.e. to connect people with money to people who needs to borrow :)

Most banks here don't handle the actual payments themselves except the biggest ones.

The small "savings banks" like the one I work in doesn't have shareholders either, they are owned by the depositors. Almost every small town and community here has one.

The most valuable service banks provide is not just "matchmaking" lenders with borrowers (an exchange of some sort can do that much more cheaply) or even spreading credit risk across a pool of borrowers (again there are other ways to do that which are cheaper), but maturity transformation: depositors can lend money to the bank which is repayable on demand, but the banks' borrowers are given set repayment schedules.

Yes there are costs to handling cash. And they are vastly higher than the cost of handling bits. A 3% fee to write some bits to a database is insane. A 3% fee to pay all the people who need to handle the currency in a cash transaction is probably not covering costs.

Yeah so you get consumer surplus if you pay 2.5% to a credit card processor instead of paying more than 3% to physical cash logistics. Everybody's happy besides your weird sense of "insane."

Furthermore you get a lot more than just writing a few bits with a credit card transaction. You can bypass the cc companies and cash logistics costs by taking checks. But certainly the revealed preference is to not do that.

That’s such a misrepresentation. The credit card fees exist because customers get benefits like delivery insurance, return insurance, holiday insurance, cashback, free credit, etc. If you just want to transfer bits you can do that for next to no fees (in Europe, where digital payments without consumer protections are common).

> such a misrepresentation

Exactly. All the talk about fees misses the point because accepting and securing paper money is also very costly.

And the provocateur's stunt in the article also misses the point, because electronic payments for groceries aren't a dystopian tyranny no matter how loud he screams about it.

And the crypto skeptics are missing the point when they say you can't buy a coffee with bitcoin, because buying coffee is a solved problem, tap to pay with a bank card works just fine.

And the crypto advocates are missing the point when they say that lightning or solana or something else will solve the coffee-buying conundrum because that's not a problem that needs solving.

The real point about cash payments and crypto is whether people should be able to make large person-to-person payments that are not trivially surveilled or controlled.

In a free society, should people have this capability? Or are the dangers of illegal transactions so great that this freedom must be eliminated?

Europe has mostly free and mostly instant SEPA transfers which are one answer. Large payments are easy and cheap, though they are not secret or untraceable. Perhaps that's a reasonable trade-off.

The US payments system is a mess by comparison, where we have no privacy paired with extreme inconvenience. Try to buy a $20,000 car from a private party on a holiday weekend to see how well that works.

>Try to buy a $20,000 car from a private party on a holiday weekend to see how well that works.

I’m not convinced that spur-of-the-moment, trustless private-party $20,000 transactions are a significant problem.

Every system has edge cases.

Debit cards have the same processing fees, the credit cards are a complete red herring. If anything credit cards are much more evil than just charging the processing fee.

Cash back? Attention is finite and I don't want a payment processor forcing me to pay a fee so I can turn around and try and earn it back. How about lower the fee and let me keep that 1%?? Then I can earn interest on it for the month, not them. And then I don't have to read additional terms and conditions, use it or lose it, book travel through their marked up garbage store, etc. It's insane to me that you'd defend cash back as some kind of advantage to consumers when it's anything but. It's a crappy product that you can choose to avoid but I want the up front transaction fee reduced by the same amount.

They're talking about being able to take cash out at the point of sale, not the shit discount model.

Mine is just literal cash I can apply to the balance on my card. Obviously the fact that cash back exists means that the card companies are making even more money on the fees. However, since most stores charge an identical amount whether you use CC or cash, everyone is collectively paying it and you might as well get the cash/miles/rewards back.

The FCBA coverage, on the other hand, has some real value. That said, even though I have used it a few times, I doubt it has saved me as much as I've spent in CC fees.

3% is insane. As why many sane places in world have set much much lower limits...

I would argue that cash maybe a little better than cashless because fees are tied to physical problem of moving cash around where as cashless fees are just one board meeting from changing ten fold.

If it was cheaper the government wouldn't force you to take part in the scam under pain of death.

And yet, when last did you get a 3-4% discount when paying cash? I remember that from the 90s and 00s.

In fact, I have seen some small places ask a 3-4% surcharge for cash payments, because banks don't process cash for free any more.

A lot of places around here charge a bit less for cash payments.

Cash only restaurants are often 10-20 percent cheaper than comparable restaurants.

That would be because at least some of the cash bypasses the cash register and the tax report.

Edit: alternatively they might not have same profitability requirement as other restaurants, because a cash-only restaurant is perfect front for money laundering.

And they're probably just not comparable restaurants on average.

My barber only takes cash. $18 for a standard haircut.

That's not because of card fees but because of taxes. They can underreport their cash income, but can't do that if the bank and card processor are involved.

Had some fun with the thought of a “Standard Haircut”: https://chat.openai.com/share/cd2948ce-2285-4491-b58f-877abb...

I have never seen a place with extra fees for cash. However I know many small shops that give discounts for cash or only take cash for small purchases.

Every gas station in my area offers a lower cash price.

I'm guessing it could be because when you pay cash you go into the store which causes people to buy stuff and they more than make up the cost.

> I’m not down to have rent seeking companies taking a slice of my hard earned money just so I don’t have to manage a few pieces of paper.

You’re pretending as if there weren’t any costs associated with handling cash. There’s almost always a handling fee if you want to put the cash into an account, which you will need to do if you want to pay people that are somewhere else than you are. If you have larger quantities of cash, you’ll also have to pay for safe transportation of the funds. If you make an honest comparison

> There’s almost always a handling fee

Citation needed. I've been depositing cash for years, with multiple banks, and nobody has ever charged a "handling fee".

> safe transportation of the funds

Yes, a lot of people have this irrational reaction to carrying large amounts of cash, as if your unremarkable Toyota miraculously sports a giant "BRINKS" logo every time you carry cash, attracting the attention of would-be criminals everywhere. I assume you believe that thieves and pickpockets are regularly carrying millimeter-wave scanners to see what's in your pockets, briefcases, backpacks, etc?

>Citation needed. I've been depositing cash for years, with multiple banks, and nobody has ever charged a "handling fee".

It's a fee associated with business accounts.

>https://www.bankofamerica.com/smallbusiness/deposits/resourc...

>Cash Deposit Processing No fee for first $7,500 in cash deposited per statement cycle at an ATM or Financial Center; then $0.30 per $100 deposited thereafter

0.3% vs. 3-4%

>0.3% vs. 3-4%

No, the total costs of handling cash currency & coins for large businesses will still add up to 3% or more which is in the range of the fees of credit-cards processing. Costs of accepting cash also includes:

- paying for armored trucks and security guards to transport bags of cash to the bank

- percentage of cash lost to crime such as

--- employees/cashiers theft/skimming by handling cash,

--- robberies,

--- counterfeit bills

https://www.google.com/search?q=retailer+total+costs+of+hand...

For a business, a true arbitrage of not paying 3% credit-card fees would be convincing customers to pay by check or electronic ACH bank account withdrawal. Those payment methods avoid the costs of managing loose cash and also avoid the fees from the credit-card processors. But they also have the same privacy concerns as CCs if customers care about that aspect.

Time spend managing the tills that you do not either have too much money at one time or have enough money always to give change... Oh and at the end of shift counting the money...

Like today I returned some deposit bottles and they had run out of 20€ bills... Which should be the most common ones. Going on trip so I preferred 10€ bills, but still...

Square will do you 1.75%, no contract, no fees and now you don't even need a physical reader as you can do contactless payment on your phone. You can get it lower with other providers if you negotiate right.

Nobody is paying 4% for any cardholder-present transactions.

>Square will do you 1.75%, no contract, no fees

Where? A quick search on their website shows 2.6%: https://squareup.com/us/en/pricing#rates

Everywhere, apparently, other than the US. You should fix your banking system.

someone has to pay for our big rewards program!!! :)

often as high as 2-2.5%

In Canada, from a 2009 article, https://www.cbc.ca/news/card-costs-who-pays-what-to-whom-1.8...:

====

How we pay

- Credit cards account for 31 per cent of transactions.

- Cash accounts for 29 per cent of transactions.

- Debit cards account for 26 per cent of transactions.

So what does it cost to process a transaction? The Bank of Canada survey looked at the estimated cost of processing a $36.50 transaction, which was the median cash transaction in its survey. Costs broke down like this:

Debit card: 19 cents.

Cash: 25 cents.

Credit card: 82 cents.

The study notes that the overall cost of electronic transactions falls as the volume increases, which the authors suggest, may encourage greater use of electronic payments.

====

I’m not. Visa and Mastercard collected $138 billion in service fees in 2021. They are among the most profitable companies in the world. You’re pretending that cash handling is a binary. You need a blend. For example, after extensive testing we are not going to send wire transfers exclusively in gold bricks. Though the loss weighs heavy on me.

But you should be very careful in eliminating cash.

I assume cash handling fees are made up by banks who want more transaction fees. That’s not a real thing in my experience. I many times have gotten a discount for cash. I have not shopped a few places because they don’t accept cash. But I have yet to be charged a cash fee by any of the banks I use.

And they have insane surveillance data on their customers from doing so. Data that is used for all kinds of unintended purposes.

Cash is also one of the last strongholds left to maintain anonymity and keep purchasing information truly private without handing heaps of data to the corporations that make a buck off your receipts—or worse, to hackers, in the case of a data breach.

To say nothing of the unbanked… which is a massive issue.

If that’s the future you want, we don’t see eye-to-eye. You are giving up a LOT more than you realize.

>Cash handling fees are made up by banks who want more transaction fees. That’s not a real thing. I have yet to be charged a cash fee by any of the banks I use.

That's because you presumably have a consumer account. If you had a business account and were depositing thousands in 20 bills they're probably going to charge you fees.

Remember when banks made their money by taking in as many deposits as possible, and then lending that money out?

The fact that you immediately assume that something doesn't exist because you don't encounter it is insanely presumptuous of you.

The entire reason why small businesses moved away from cash is because its cheaper even taking into account fees. Food trucks, popups, small merchant kiosks. Not needing to take cash means far less overhead.

You're more than welcome to argue the benefits of cash transactions and in most cases I would agree. But you should not miss the truth of the situation.

And danger to employees! My partner used to work as a waitress, and was always very nervous when she had to go home with a days revenue when she was the last to leave.

Electronic payments are much safer, no physical cash someone can steal.

No, it's not the entire reason. If a store doesn't accept customers' preferred payment methods some of them will switch to competing retailers who do.

Here, in France, small businesses are delighted when I pay in cash

From what they tell me, that's because: - they get 100% of the money (no tax) - it grants them the right to cheat with tax declaration (which is always good) - it can be quicker and easier than credit card (I'm think of those guys who sells stuff for 5€, for instance)

I believe medium/large businesses loves credit cards, because the people doing the payment are low-waged, untrusted people, who cannot do maths etc (or whatever the reasons managements got in their head) But small businesses ? When you give money to the owner of said business ? They have credit cards because the consumers use them, but they hate them

The reality is most business prefer the 3% fee because the cost of Cash processing is higher when you factor in Bank Fees, Security, Accounting, Theft, and other factors.

[1] https://www.businesswire.com/news/home/20180130005244/en/New...

Banks sometimes charge fees to make cash withdrawals from ATMs, even ATMs belonging to the same bank that holds your account (true at least in my personal case, outside the US).

If you are paid via direct deposit, you're financially incentivized to stay cashless. The direct cost of spending via debit/credit card (if one doesn't carry a balance) is zero, compared to the cost of withdrawing cash.

If you want to inventivize salaried professionals to pay with cash, try outlawing fees on ATM withdrawals first.

There are now systems that are far cheaper than credit cards or debit cards. In the US it's called: FedNow. The system enables direct bank transfers in real-time, almost for free.

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

The support is still very limited, but in India a similar system (UPI) managed to become ubiquitous.

With Visa/Mastercard... debit and credit cards you get some purchase protection. With those direct bank transfer systems you don't.

Have you never done a chargeback on a credit card? With Fednow, UPI etc you can't.

Credit card companies are highly profitable, meaning that people spend significantly more money on credit card fees than they save through purchase protection. So it's not worth it. Especially not in cases where it replaces cash, which also has no chargeback.

Exchanging value between two economical entities using pieces of paper seems crazy when you have better ways.

Try to explain buying with cash in 200 years to someone who never seen it.

What if I need to pay just a little, do I tear a bit of the paper?

No, you can't tear. If your piece of paper is worth too much then the seller gives you other pieces of paper worth less.

Can I throw out the rest of paper after I'm done buying?

Not unless you want to lose a piece of your value.

What if I don't have enough pieces of paper on me?

Then you can't buy.

So I should just carry all my worth in pieces of paper on me at all times?

That's a bad idea because when you loose this paper or it gets stolen or destroyed you no longer own their value.

Where do I get the paper from? Your employer can five it to you every month or week and you hold it in your home. Alternatively employer transfers the value to the bank normal way and when you need paper the bank can dispense it to you through various devices or service points.

Are any of those devices handheld?

Unfortunately no.

What if my house get burned down or robbed?

Then you lose all the value associated with all the papers kept there.

And so on.

I don't think OP was arguing to completely get rid of all wired transactions. And for all the points you made you still missed OPs major gripe, paying a third party for every single transaction you make. Wanna give your children pocket money? bank gets a cut...doesn't seem right tbh

But you pay for facilitating the service of value transfer.

If you do it by hand yourself the effort burdens you and the seller.

You might argue that the cost is too much and maybe it should be state run and paid from taxes since it's the state that provides the service of money.

Exchanging value between two economic entities using primitive card numbers seems crazy when you have better ways.

Try to explain buying with a credit card online 200 years ago to someone who has never seen it.

You type in about 23 digits (16-digit card number, 4-digit expiry month, 3-digit verification code) to make a payment.

But these digits only change every few years as you renew your credit card. So many parties will learn of your digits and you won't know who leaked them.

The merchant on the other end can take out any amount of money from your account; it's pull-based, not push-based.

The merchant on the other end can trap you in a recurring subscription without your knowledge or make it very hard to cancel.

People have credit limits in the thousands of dollars, and in any single transaction you are liable to lose that much money. Meanwhile, you can't lose more than the hundreds of dollars of cash in your wallet.

You can call your card issuer to dispute charges, but now you're at the mercy of an intermediary.

The intermediary skims about 2~4% of every transaction, for the luxury of being able to spend your own money.

You can't process certain types of transactions in an offline environment, such as debit cards during a power outage or on an airplane (though Wi-Fi is slowly becoming more common).

And you think cash is crazy?

I have almost never done that. I just touch my personal computing device to a payment terminal and it's done.

I agree that giving anyone your card number is insanity. I only did it few times in hotels and it required tremendous leap of faith from me. To be honest I should have gotten plastic prepaid for this purpose.

Just yesterday, i went with my friend to some place, we park but the spot is metered, the park meters have been replaced by a “more convenient” digital system, there used to be machines where you could pay and print a ticket, of course this was still inconvenient so the machines were removed altogether and now it’s an app-only system, wonderful but there are several apps for different zones so if you go to an unusual place chances are you need to install a new app then enter the location, the time you want to park, the plate number, a picture of the tag, the payment info, the 2FA code and receive the confirmation. All this replaced the inconvenience of popping a quarter in the meter.

Haha, Americans with their 2-4% transaction tax, it’s so funny.

No seriously, when I first moved to the Netherlands I was wondering what kind of backwards country wouldn’t let me use a credit card at the grocery store. And that’s when I learned about how crazy it is that credit cards and even American debit cards have such needlessly high transaction fees.

I use an Visa tied to an American bank every day for groceries in NL. I only have ever had issues using a card at a very small record store, I just make sure to carry 100eur in cash just in case. I do have more issues online when something only takes iDEAL though.

I'm sure you're aware of this - though others may not be: another trick US banks use is gouging you on exchange rates. My bank was charging something like a 0.5% fee visible fee and then an invisible fee several times that in exchange rate gouging. I found trying to use US banks abroad an absolutely painful experience, to the point I swapped my banking abroad which is itself a huge PITA thanks to FATCA and other stuff making Americans borderline persona non grata at most foreign banks.

Banks all over the world make healthy margins on cross-border transactions involving a currency cross. It is not unique to American banks at all.

My EU bank charges less than 1% currency exchange fee. US banks have charged me 5-8%. It's not the same.

No way a US bank charged you that amount unless you made the purchase in an esoteric fashion.

It was not a purchase, it was a money transfer. They converted it to EUR for me at really bad rates. It was not an explicit fee.

Ok well we are talking about something else entirely -- credit card purchases with an FX cross.

You get 95% of it back in the form of rewards, so it's not really a tax at all.

It seems kind of like a scam, though, credit card rewards. I don’t know enough about it, I generally don’t like participating in those sorts of things. Do you have a ref on the 95%?

If you don't know anything about it, why would you call it a tax?

Let’s just take 95% as a true figure … first of all the 5% you don’t get back is a straight up loss. The rewards you get at the end of the month are fine (eg cash back) but you’ve missed out on earning interest on the money you “get back”

Card network fees (the part credit card users don't get back) are about the same for the European payment systems. For card users on net there is essentially no difference.

The interest argument of course is nonsense because the opportunity cost ia outweighed ~50x by the interest benefit you receive from the entire purchase going on credit vs just the 2% interchange.

“Of course”.

Thanks for responding — can you clarify this interest benefit you are talking about?

You are able to buy now, but not pay until 30 days later, paying no interest unless paid in full. Which means YOU earn interest on your money during that period...

Oh duh! Pardon my ignorance; that makes perfect sense, I guess my mind was elsewhere

In exchange for signing away usage of your personal data/legally agreeing to participate in ad targeting.

The EU has indeed banned most of the rent-seeking on payment cards by setting upper bounds on various fees that can be charged.

maybe we should start thinking of payment infrastructure as a core public service if we move away from cash? Just like there is an official entity that can "print" cash, we should start doing the same with digital payments (I believe the EU is doing somethig similar). That way you don't have a duopoly taking a cut of every transaction.

Governments should be running their own digital counterparts to cash, but they need to add the anonymity of this cash into the constitution. Otherwise the security apparatus is going to ruin it for everyone.

... because the security apparatus is definitely held in check by the Constitution?

At least it could theoretically be. Anything outside of that would definitely not be. And at that point the digital cash equivalent will not be considered private. The government has to go above and beyond for people to believe the digital cash would preserve their privacy.

This is called CBDC (Central Bank Digital Currency) and it is being worked on. But there are concerns about state surveillance and misuse.

CBDCs are a pandora box that once opened will not be closed. At best they will use for massive surveillance which is already scary.

I pay a fixed monthly fee for my bank that comes with full access to the interbank payment system. Every business on my country does the same for the other side, and we get unlimited transactions with no marginal cost.

Anyway, as somebody else said, a 3% fee on transactions is just ridiculous. If you get any bit of competition, transaction-value based fees tend to be on the order of 0.5%.

Maybe the government should limit the cut that can be taken to something like 1%. All it would require is some legislation,

It definitely matters who it is charged to. In almost all cases, it's just rolled into the overall price of the item, which means you pay it whether you use cash or not. It would be very interesting to see if prices for card were 3% higher across the board, if people would still use them as much. I honestly have no idea.

Using debased money (does the paper in the note have any value?) is already submitting to paying seignorage to the issuing authority. There's not escaping it unless you sit on the top of that food chain.

Almost like our govs should create a standard for digital currency with 0% fees involved.

But you know, our governments are fucking useless, so that ain't happening anytime soon.

There are two fallacies I frequently feel the need to debunk in this discussion.

- Cash is anonymous

- Cash is an "old" or "low" technology.

When a serious crime is committed you might be surprised how much the police can do to trace cash. Serial numbers in and out of ATMs and shops are tracked, and frequently your face is captured by cameras in stores, ATMs and vending machines.

Modern cash is high technology. Look at a UK or European note already. Holograms, nano-technology, advanced materials science... It's well past the point of being worth forging, and it is likely that future banknotes will use einks, embedded printable passive electronics to do all of the things people hope or fear of purely digital cash, such as time-out, store variable value, and be more traceable.

The function cash really performs is a resilience buffer for person to person transactions that works independently of electrical power and Internet. Smart people at the top are never going to let that slide, because it would be national security suicide and practically inviting civil unrest.

Cash, in evolving forms is here to stay, but it may not have all the properties we think it has and defend it for.

>When a serious crime is committed you might be surprised how much the police can do to trace cash. Serial numbers in and out of ATMs and shops are tracked, and frequently your face is captured by cameras in stores, ATMs and vending machines.

Which is neither here, not there. Cash is effectively anonymous for 99% of uses that don't involve "major crime". Your buying something is not logged anywhere, for example.

> Which is neither here, not there. Cash is effectively anonymous for 99% of uses that don't involve "major crime".

Exactly. Almost all cash transactions remain anonymous because there's no criminal investigation involved.

Most people are honest and just going about their business with friends and family.

That's how it should be.

A cost bar for tracing is a desirable feature for non-authoritarian societies.

Digital currency mediated by bank apps, active cards, smartphones or whatever, makes for "convenience" but also zero cost to spy on people who are not criminals. And that's a problem.

So maybe it is here. Or there. I'm not sure where you're standing :)

>Exactly. Almost all cash transactions remain anonymous because there's no criminal investigation involved.

It's disingenuous to even suggest that the traceability of cash transaction is even remotely close to that of credit cards and e-payments, and that what keeps them anonymous is that "there's no criminal investigation involved".

It's the exact opposite: cash transaction are anonymity friendly by nature, and only when there's a great need, and with quite an effort, like in a criminal investigation, are they attempted to be traced, and even there it's more difficult exacty because of the nature of cash making it more difficult.

That's exactly what I am saying. You are repeating my own argument back to me and labelling it "disingenuous". You've misunderstood something, somewhere. Do please read again with care.

You fell for a simple fallecy. The line isn't that cash is used in a major crime. It's that someone in power wants someone in prison.

1. You might not be involved in a major crime but you might be a suspect. Lots of innocent suspects get convicted.

2. You might be a whistleblower. Lots of whistleblowers get framed.

Etc.

"If I've done nothing wrong I have nothing to hide" didn't work out well for Soviet Russia or Nazi Germany.

A lot of the reason many of us want privacy preserved is to prevent a similar path here. Totalitarian governments don't always pop up overnight on a revolution; they often creep up on you.

The creeping process is also often:

1. We'll track X with major checks on privacy; it will only be used for terrorism and child abuse investigations and held in a secure vault

2. We're just doing a better job of sharing / using data we already collect

Neither off those is objectionable, but together, you end up in a distopia.

> Serial numbers in and out of ATMs and shops are tracked

Is this true? When I buy something from my local gas station is there a system in place tracking every serial number exchanged on the cash?

Not in the US. There are no laws requiring businesses to do so. Why would employers spend the resources required for such a thing?

Because it's basically no resources. If they're not doing it now, they'll be doing it in a few years, and if not banned, selling the data.

It's literally adding a 50 cent camera to a cash register.

where do you set up the camera to track the serial numbers and the person's identity that they're being given to?

Some scenarios I hope you see as obvious:

- you take out cash from an ATM. The machine is loaded with sequential or logged order of SN that can be matched to withdrawals and times.

- you take that cash immediately to a vending machine or supermarket auto-checkout that takes notes. The machine scans all notes it ingests and can match them to timings and purchase details.

- Even a small shop might have a camera at the till, along with a UV light frequency used to check for forgeries.

Obviously as the time between withdrawal and re-appearing in a system grows the strength of the association gets lower, as notes change hands. But in a serious crime investigation that doesn't matter, it's a good-enough capability to warrant chasing.

> - you take that cash immediately to a vending machine or supermarket auto-checkout that takes notes. The machine scans all notes it ingests and can match them to timings and purchase details.

I can tell you they don't do that, at least for the systems I know in Europe. And for manual systems obviously the cashier doesn't record serials and match them to transactions.

I'd love to hear more about what you know about the systems you've examined or designed. PM me at cybershow.uk and we might do an episode and bring in some other engineers too.

Specifically can you prove (or give compelling anecdotes why) the linear CCD array used to determine the legitimacy of the note cannot, on internet connected machines, retain and store that scan? I know that's a tall order, because I'm asking a negative.

I haven't designed such a system and as you say I can't really prove anything, but the embedded software I worked on just didn't record anything like that. Of course one can always imagine a secret government firmware or whatever, it's just highly unlikely IMO.

The most obvious proof I'd say is that there is no law mandating this, so nobody is going to bother doing it just for fun.

How about money counting machines? Medium and bigger shops probably have those and if not they probably at least every few days bring cash to bank to deposit on their account.

Remember supposedly most printers were printing some semi invisible serial codes - for tracking whistleblowers and leaks.

Probably cannot easily prove that ATM or money counter machines manufactures are not doing something similar.

Money counting machines do it by weight. They're certainly not scanning and recording the serial numbers.

I haven't commented on the ATMs, I was only replying to the question, not the statement that preceded it.

I have owned a retail shop. There are plenty of rules and regulations to worry about, and labor is a massive expense. At no point would I have been inclined to purchase equipment or pay for labor to track serial numbers on bills without a specific mandate to do so. No such mandate exists.

You are describing the possible collection of circumstantial evidence, not systemic surveillance inherent to cash. Completely different thing than the transaction logs of electronic money transfers.

There is a reason why governments don't want large cash transactions. It enables illegal sales, tax evasion and money laundering. Dude/ette, if you think the police can track a single 20€ bill that precisely, they wouldn't have a problem seeing through 500k€ cash deals when drug money goes legit through real estate. Basically every restaurant and cafe on earth uses cash to do creative accounting.

However, of course, there are particular crimes where money tracking does matter. If you rob a bank or break into an ATM your cash prize comes with strings attached, as those known bills will get flagged. I think the most important implication would be these bills becoming actual evidence instead of an happenstance mysterious cash finding. If a bank scan finds them in circulation again, they may be able to narrow down your location, do statistics with mobile network data and so on, but it's not like every note is tracked by default at every endpoint.

Crime runs on cash. How often have you read about anyone getting caught on cash serials??

Why on earth would any commercial store invest in cash tracking? They only got one point of the cash flow, are you implying they are all connected in some grand conspiracy?? Such stores got an abundance of way more accessible and relevant customer data they could (super illegally) collect, like biometrics, RF device IDs, loyalty programs, ... I also never seen a self checkout store which accepted cash at all.

You are telling a fatalist narrative which only helps the abandonment of cash, especially for small, daily transactions, which matter most for privacy.

Crypto won't happen. Lol.

Sorry I missed this reply and hope you still see mine.

> You are telling a fatalist narrative which only helps the abandonment of cash, especially for small, daily transactions, which matter most for privacy.

I hope that's not true and this is the only point I dispute.

Yes cash can be tracked, down to a single note, but it's extremely hard and expensive, as most of us here with a little more knowledge understand. No big conspiracies, just a sobering appraisal of the state of the art. What that knowledge does is debunk the political lie that digital cash is the only way to fight crime and money laundering etc.

Now, we were going to do a Cybershow episode on drug dealers who accept Google and Apple pay, but shelved it because frankly I'm out of my depth journalistically and can't protect sources or navigate the risks of side effects. But it happens, and those companies collude (because it must be bloody obvious from the data).

Meanwhile I think the front line is dispelling the "convenience myth". Convenience is such a dirty and dishonest word that most-times stands in for "something that makes me feel good". In reality I can pay cash for a round of drinks and tip the barmaid before my mates have got their phones out their pockets.

why would the person I'm responding to say such a thing?

> anonymous ... you might be surprised how much the police can do to trace cash

That is not the point. The point is in the contract - e.g., that you are not accepting to untick a "do not track" flag. That circumvention is always possible is not what matters there.

> Smart people at the top...

Who exactly? Where are these people in power defending physical cash or recommending an alternative monetary medium resilient to grid failure?

You know that's the best question anyone has asked me on HN.

I simply said "smart people at the top". I didn't say there were any.

What the police and other authorities 'can do' is a world away from what they 'actually do', in 99% of cases.

You could be unlucky if your crime passes a certain threshold or affects someone with power but, most of the time, it will not be investigated with the resources of the state.

Exactly the feature desirable to everyone in society. Including the police.

I had a funny conversation with some LE types the other day (in the context of something we call "fly-tipping") about how, in theory, everyone who litters could be brought to book because they leave their fingerprints all over stuff.

Nobody in forensics is ever going to do that unless it's a very serious case. Nobody wants to be compelled to investigate some bs crime just because its possible. Make things too convenient and you've got China.

>how much the police can do to trace cash

It doable but not at all trivial.

>It's well past the point of being worth forging

The news seem to indicate plenty of forgers still, e.g.:

https://www.europol.europa.eu/media-press/newsroom/news/poss...

>it is likely that future banknotes will use einks

einks are too expensive right now?

> einks are too expensive right now?

Maybe yes. But track their falling cost and you'll see where the price point intersects with near disposable cost. European transport tickets made of cheap plasticised card only took a couple of years to incorporate RFID - that's already a long way toward low cost "intelligent cash".

For a brief few weeks in the 1980s we had "phone cards" with stored, decrementable value that you could use a few times. Purely passive and using an optical technique to see where pressure had been applied to plastic (which turns milky). In Hungary in the communist era I saw tram tickets using ingenious mathematics (an ephemeral mechanical key set by the driver) and punched paper holes to provide multi-use.

It's amazing what can be done to make cheap or even disposable portable artifacts to transfer value.

>track their falling cost

I do recall that patents/trademarks/tech are owned by E-Ink inc., and one of the biggest reason for the cost is them gouging the market? That mechanism can keep high prices for a long time.

> I do recall that patents/trademarks/tech are owned by E-Ink inc., and one of the biggest reason for the cost is them gouging the market? That mechanism can keep high prices for a long time.

recall? gouging? You mean you have data showing is not just simple volume issues?

>>When a serious crime is committed you might be surprised how much the police can do to trace cash. Serial numbers in and out of ATMs and shops are tracked, and frequently your face is captured by cameras in stores, ATMs and vending machines.

Go to bank, take out 100's, to small mom and pop get change... problem solved.

Further it is highly unlikely that if some bill I got out of ATM finds it way to a crime scene or something that they will be proof of anything a defense lawyer would shoot that down in about 2 secs

>> It's well past the point of being worth forging

Not really.

>>future banknotes will use einks, embedded printable passive electronics to do all of the things people hope or fear of purely digital cash

and those should be opposed as well

You mix things up. Most of the tech you describe is about making sure that bank note is not fake. The tracking part is ad-hoc and shoddy, works only in dense urban settings, closed systems like banking or a big supermarket. Cash usage itself is anonymous.

You're making an argument which is a variant of "if I'm not doing anything wrong, then I have nothing to hide." Privacy is a worthwhile value in and of itself, not least of which because different people have different notions of what "wrong" is and their conception of "wrong" changes over the course of their life.

An example list of completely legal transactions which you might not want someone in your life knowing about:

  a) You don't want your spouse to know that you bought some beers / fast food / pornographic magazines / cigarettes / other vice
  b) You don't want your employer to know that you saw a therapist / oncologist / family planning services
  c) You don't want your parents to know that you bought contraception
  d) You don't want your car insurance provider to know that you purchased a repair from a mechanic (i.e. you don't want your rates increased).

Making payments in cash is making a decision for them not to be entered in some database which may be hacked and sold for profit to someone who values their interests more than your privacy.

With respect, you're reading too much intent into my words. I am vehemently pro-privacy. In fact I seriously consider over-intrusive authoritarianism to be a mental health disorder and have read somewhat into the works of Adorno etc [0,1] (cue a dozen responses bemoaning how everything done at Berkeley in the 1960s is now-debunked leftist rubbish)

Part of that is helping people to have a realistic but not paranoid view of technological society. My work also means I help people who have serious crimes or security issues to solve, and have legitimate investigatory needs.

I think privacy violations are not rooted in economic greed, but in unboundaried, controlling impulses that get encoded into technology.

Hope I am responding respectfully and appropriately, sorry if I got you wrong. BTW, in a safe way (ie not online) take one of those "authoritarian personality tests". It will shock you how much we have hidden in ourselves just ready to be provoked by demagogues or disinformation.

[0] https://en.wikipedia.org/wiki/The_Authoritarian_Personality

[1] https://www.psychologytoday.com/us/blog/rethinking-mental-he...

Cash is very easily tumbled or made anonymous. It’s as simple as going to a casino, buying a large number of chips and then cashing those chips out again.

The only fallacy here is that you expect anonymity to be 100% provided by cash.

What are you responding to?

Cash is anonymous, by and large. That’s a fact, not a fallacy. I’ve never in my life seen any shops track serial numbers of cash transactions, nor associate them with me. I’m skeptical that anyone does it, but I welcome any evidence of this dubious claim that you’d like to provide. Having your face capture by a camera does not track the bills you used, nor the items you purchased. You’re spinning a mostly false tale.

E-money on the other hand tracks everything you buy, what you buy, when you buy, what you paid, where you bought it, and that information is used to construct a valuable profile of your purchasing habits. That profile is used for advertising. But it could also be used to deny insurance claims. Should be illegal, but I knew someone who worked for a credit card company that informed me they were thinking about how to do this legally.

E-money is tracked on everyone for everything by default, and cash does non of this. It’s insanely expensive for the police to try to trace cash, and they can only do it for one criminal at a time. They do not, and cannot, track everyone’s cash.

Spending profiles captured via e-money tracking are captured by private corporations and they are offered for sale. Any criminal cash tracking by police is used solely for capturing criminal and is otherwise not available to anyone else.

> Modern cash is high technology

Again, who’s even arguing? This is a straw man, the context is digital money. There was no debate about how much technology is used for printing bills.

> Cash, in evolving forms is here to stay

So you say? I’m not going to argue or pretend to make predictions, but one thing we know for absolute sure is that there is a downward trend of cash transactions globally.

> Serial numbers in and out of ATMs and shops are tracked

lmfao what. Unless someone is committing large scale crimes involving bands, no one is tracking some small bills between private citizens, some stores, more citizens, et al.

For the vast majority of people, cash is anonymous. No advertising company or government is obtaining tracking data on your purchase of an apple and a cup of coffee with cash.

> [On] 23rd August 1994, the chaotic music duo and performance artists Bill Drummond and Jimmy Cauty burned £1m of notes behind a boathouse on the Scottish island of Jura. They are not alone in attempting to reduce money’s power…

They literally increased the purchasing power of each remaining pound by doing so.

>They literally increased the purchasing power of each remaining pound by doing so.

Did they. Notes aren't a limited resource and they can still be considered in the cashflow

Assuming they (or someone else) owned the notes, yes. By reducing their own holdings, they raised the value of everyone else's.

If the notes were counterfeit or had otherwise managed to come into existence without being owned by anyone, then no.

Would it raise the value of the currency if the central bank didn't know this stash was destroyed? It seems like this pile of cash would still be considered to be "in circulation" until the central bank declared it to not be.

Yes

The central bank's knowledge isn't relevant in any way. The value of the currency goes up because the willingness of people to spend it went down. You can't spend money that doesn't exist, so this effect will occur regardless of anyone's knowledge of anything.

I don't really understand your comment.

Generally it's accepted that the value went up because it became more rare as the number of unit went down. Or similarly because if all the money represents the price of everything in the economy, as there is less money and assuming that everything in the economy didn't change, then everything has now a slightly lower price.

> Generally it's accepted that the value went up because it became more rare as the number of unit went down.

That's true.

> Or similarly because if all the money represents the price of everything in the economy, as there is less money and assuming that everything in the economy didn't change, then everything has now a slightly lower price.

That can't be true in any meaningful way, because all the money doesn't represent the price of everything in the economy. "Everything in the economy" is always worth many multiples of "all the money".

The definition you'll see in economics is MV = PY. It's defined with reference to the concept of GDP, and the variables are:

M is the amount of money (that year).

V is the "velocity of money", the average number of times that a particular dollar gets spent (that year).

P is the price level. The value of money (that year) is 1/P.

Y is the amount of non-monetary stuff that is produced (that year).

(I would be happier if Y was the amount of non-monetary stuff that existed, but that does not appear to be how economists prefer to talk about it. This set of definitions lets you say that MV is equal to NGDP.)

You can characterize the effect of destruction of money as a reduction in M or as a reduction in V. If you take the view that the money still exists, because it's listed on a balance sheet somewhere, then M has not gone down, but under that view V still has; it's impossible to spend that money. Assuming everyone's urge to spend as a function of their ability to spend stays unchanged, you'll see that the party who locked up $1 million (by destroying it) will, as a result, spend less. Everyone else in the relevant universe is unaffected and spends just as much as they would have anyway. Then, by our special analysis, the amount of total money spent has gone down, and the amount of money in existence hasn't, so the velocity of money has gone down.

Y is unaffected by the destruction of money. For PY to go down while Y stays constant, P must go down, which means that 1/P, the value of money, goes up.

------

Note that the implication of this velocity-based analysis is that, if a miser with tons of money in bank accounts that he'll never use happens to one day withdraw some of that money and destroy it, there will be no effect on the value of money. This is correct; that money had already been effectively destroyed when the miser committed to not spending it.

(Over a much longer term, the effect of destruction would be visible when the miser's heirs inherited a smaller amount of money than otherwise and consequently spent less.)

Really interesting discussion guys. I recommend this short essay by F.A.Hayek on how prices are discovered. https://www.econlib.org/library/Essays/hykKnw.html

By your logic the currency goes up when the poor get poorer

Yes, if a million poor people lose $1 each, that has the same effect as one guy losing $1 million.

If million people lose $1, nobody cares. If one guy loses 1 million he might cut costs that will affect others.

If people like Musk lose wealth because of sinking stock prices, his workers don't have suddenly more buying power.

Something seems to have gone badly wrong in your choice of example - that didn't even involve any money.

It's money just not cash.

Most money is book money and the burning of 1 million doesn't change the purchasing of the people because cash isn't linked to a finite resource like gold.

A better question is do I make everyone else’s dollar worth more for the duration that I hold and don’t spend my dollars

Yes. That is precisely why we don't get runaway inflation when people own a ton of property or have tons of money in index funds. That money supply isn't doing anything in particular.

Do you make everyone else's stock worth more for the duration that you hold your shares without selling them?

Rephrasing that question, if you were holding a bunch of shares of stock, and you sell them, will that lower the price of that stock?

It's confusing to think about money as a relative not absolute resource

There’s a documentary called “ watch the K foundation burn a million quid” well worth watching.

Agreed because it's a very human docu. It's more about the human experiences of burning 1mil rather than prompting the act - which remains very controversial.

By what, 0.00001%? I think the quoted sentence is obviously talking about the symbolic power of money – and burning a million pounds certainly has a lot of that.

Good podcast about the KLF: https://thenonsensebazaar.com/listen/119-the-klf/

The Bank of England destroys between 10-30 billion pounds worth of notes per year (no longer fit for circulation). Sterling has other issuing banks too beyond BoE. I don’t think it’s possible to measure 1m notes going absent by any observable metric.

Even if it were possible, the purchasing power wouldn’t change - you coffee shop wouldn’t reduce their prices but they might adjust staffing levels in an extreme case (not remotely likely to happen with £1mm diff in circulation)

As a nitpick, presumably the banknotes destroyed by BoE are then replaced by other banknotes.

But I agree this is likely unmeasurable.

Correct, it's the rarety of all others bank notes that is increased, increasing purchasing power is only one consequence possible but not the only one.

By the way, being hard to measure doesn't mean it doesn't exist. And there are plenty of things easy to measure that are meaningless

Bank notes are not re-issued 1:1 with destroyed notes.

>> being hard to measure doesn't mean it doesn't exist

No in this context it does. Either you can measure the increase purchasing power or you can’t. And if you can’t measure it, it doesn’t exist in this specific case.

Most economics consequences will never be measured ever

I think we’d be getting into something akin to “homeopathic” monetary theory with that line of reasoning…!

Do you only do stuff in life that you think will be able to measure a posteriori ?

"The Bank of England destroys between 10-30 billion pounds worth of notes per year (no longer fit for circulation)."

The difference is that when BoE destroys notes they are accounted for by either the issuing of new notes and or crediting their withdrawal with a bank-entry credit thus the money in circulation does not change.

Burning notes willy nilly effectively reduces the amount of currency in circulation because the central bank thinks the money still in circulation and doesn't replace it. This is why in many countries defacing or destroying the currency is unlawful.

I believe he meant it's such a low number it wouldn't be relevant anyway - same as merging facebook accounts with wifey to not take that space on facebook

Yes, but e.g. even though the gravitational force exerted by my body affects you only in miniscule amounts, it’s still there.

(Miniscule until I manage to stuff my face with enough donuts.)

Right, clearly burning a million or perhaps even quite some millions would have a negligible effect on the currency, similarly millions in counterfeit money would have to be circulated to actually destabilize the currency (that's assuming the dud notes aren't noticed first).

Clearly, in modern times in modern democracies it's very unlikely that in any practical scenario that some entity would be capable of unofficially adding or withdrawing enough money from a currency to actually destabilize it, moreover in such an event the central bank/government would be onto it in seconds.

It's however an altogether different scenario if the citizenry somehow has the perception that the currency isn't exactly what the central bank purports it to be. Just the notion that something may be wrong with the currency could destabilize it, hence hellishly tight laws to ensure this never happens.

And the purchasing power of any pound still to be printed by the government.

This is just rich people flexing under the BS guise of sticking it to the man.

Not so - it was the majority of their music industry earnings, and they are apparently quite haunted by it to this day!

They sound to me like astronomical idiots the likes of which will rarely be approached in the past, present, and future of the human race.

It was their entire remaining royalty earnings. They also deleted their back catalogue so they couldn't earn any more. I remember having to buy Japanese imports when I wanted CD copies of the White Room and Chill Out as a teenager. It was only a couple of years ago when they finally reissued any of their work.

You might argue they distributed the money amongst all existing money-havers, with each getting a microscopic share in proportion to how much money they already have. In that case it's a donation primarily to the rich.

But it's also no different than if they stuck it under a mattress for 10 years, at least until the 10 years is up. So that's also sort of a donation primarily to the rich.

Of course when the 10 years is up and they spend money, more of it will wind up in rich people's accounts than in anyone else's, if not immediately then eventually (otherwise they wouldn't stay rich.)

>In that case it's a donation primarily to the rich.

[laughs, in disappearing bitcoin]

The ability to shutdown any persons the government doesn't like using any growing list of $Excuses is worrying.

Currency is a freedom to perform transaction and arguably a given right, it's existed since humans learnt trade.

Cash allows anyone to transact without a prerequisite or control. Two parties. Centralised digital currency will change it.

That worry doesn't even include the privacy concerns and as systems become centralised either through standards or legislation. It will be easy to track someones habits or location globally.

The government has always been able to shut you down. If they wanted to, they would pull you aside with no recourse and the police would execute civil forfeiture (see also: steal) against anything on your person, car or home. Cash makes this worse.

Nor does it save you from 90% of transactions you do. Banks will know when you deposit/withdraw money. Stores know the moment you walk in. Unless you deal purely in cash (and I mean PURELY) someone somewhere will know when and how you're spending your money.

If you want to deal with privacy concerns then it needs to be codified in law. And that involves dealing with the entire chain, not just point of sale and not just thinking cash will save you.

There are things that are justified to exist whose sole purpose is keeping things in-check. If any of your aforementioned tools gets abused by the authorities we can still fall back to using cash. If you take away the fallback alternative, then abuse is much more difficult to keep in check. This is called Game Theory.

There's a qualitative difference between the government being able to freeze the accounts of every person whose phone was detected at a protest, and the government having to send agents out to physically find each of those people, search them and their property, and seize their cash. The first is cheap and easy for the government to do on a large scale, and difficult for the protesters to block. The second is far more expensive for the government, and the protesters have more options to fight back—run, hide the cash, etc. Not to mention it will probably drum up sympathy for the oppressed.

And in the end, physically seizing cash & goods only takes away what the protesters have at the time—they can still go earn more cash to transact with, unless they are arrested. Someone whose accounts are frozen, and who is prevented from opening new accounts, and who can't use cash, is running out of options.

Let's be real here: You, I, and most of the people in this thread talking about privacy concerns when it comes to cash and what not are playing pretend. I say this because the odds are we have a significant amount of our money invested in some form of digital investment. Whether it's stocks, certificates, money sitting in a bank account. The nature of cash means it scales up poorly; and the nature of holding cash means you are literally losing money year over year thanks to inflation. The system is built to encourage this.

If the government wanted to freeze your accounts and take most of your net worth, they can. And while cash transactions can be secure, in our day to day life where our transactions are done cash is not meaningfully adding anything to our privacy. To actually achieve any sort of privacy with cash involves operating purely with cash: That means no bank accounts, no investments, you are paid directly by your workplace with cash etc.

That's why again, cash will not protect you. It will not protect most of the people here acting like it will.

It sounds like you're still upset about the truckers protest in Ottawa in February 2022.

What kind of dystopian dictatorship are we talking about really?

But well, no, there isn't much of a difference.

just like security it's a spectrum and not a 0 or 1. I could live on cash right now if I wanted to, so it isn't 90%. If the government stops issue it and issues debit cards only or allows banks to do it then that becomes impossible. The government could always come to your house and disappear you or trump up some charges and throw you in prison indefinitely, even in the USA, so that's not really an argument

The current trend is to move from cash to electronic money controlled by the banks. Previously the money deposited to a bank account was the clients money that the bank just kept. Now it's the banks money that can be frozen by any reason and it's the client's responsibility to prove his innocence.

Next step is a blockchain-based crypto, controlled only by a single structure, such as Fed. Total control directly by the government, no banks involved. Full access to the history of all purchases and means to immediately lock out anyone who does anything "wrong".

Personally I'm going to move out of the country as soon as it forbids the cash transactions, as I don't want my kids to be slaves to the government.

> Personally I'm going to move out of the country as soon as it forbids the cash transactions

Which country is it? In many jurisdictions cash transactions are already illegal above certain threshold. It might be that you won't have too many places to go.

Theoretically, they can lock you out by suspending your passport and preventing you from traveling even if you leave the country. Also they can have full access to your bank records given the warrant and you can't make any serious purchases with cash.

Even in an unlikely apocalyptic scenario you have described they won't gain much more power than they already have. I don't see how this makes you a slave by itself. Only if government begins using this as a tool to control you but then, if we hit such a point, they have much more other tools people have to worry about.

What are you talking about? Deposits that came in via paper money are treated in exactly the same manner as those deposited electronically.

Cash transactions over $10k have to be reported to the IRS. You'd have to provide ID and TIN. If that weren't the case, criminals wouldn't have had problems with money laundering.

I once had this discussion with an economics person and pointed out that if my country moves to a card-only society, then I would move to using USD notes instead.

I'm sure I won't be the only one accepting USD notes as payment.

So really either all countries go card only or people just move to other currencies, at least for certain transactions.

The other day, I paid cash at the local Chinese-American place, and the owner said "thank you for using cash, it helps small businesses", which took me by surprise. So I asked how much card processors charge, and she went on a bit of a rant, listing processing fees for everything from regular debit cards* charging 3-4% to rewards credit cards being around 7% to special international or world credit cards charging something like 17%. And most of them have a very narrow window to correct or void the transaction. With such rent-seeking behavior by banks, I very much understand wanting to keep cash around.

* Debit cards charged as debit, by entering a PIN. Some terminals allow you to "bypass PIN" and/or automatically charge debit cards as credit. I don't know, it's shady.

We have some small traders in the UK who insist on a minimum spend for accepting cards because of the fees levied. It doesn't really make any business sense although I appreciate the sentiment behind it.

What part of the world? In the US at least this experience would only apply to a business owner that was getting absolutely fleeced by their processor.

I wish more businesses would (could?) give cash discounts. It's the answer to the convenience and rewards offered by credit cards. If I can save as much or more by paying in cash as I can by paying by card, then I have a great motivation to start carrying cash around!

Several small businesses in my city do charge 3% for using a card. So that is like a cash discount.

Many gas stations (usually ones serving trucks) have cash discounts for fuel, too.

(US, midwest)

This is the first I'm hearing of double digit rates -- what cards are those? I'd definitely like to avoid them.

I don't recall exactly, I believe it was some type of business cards, or cards for travel and international use.

I think the ongoing banking crisis in Lebanon (similarly in Egypt and maybe elsewhere too) where there are restrictions on people's access to their deposits or making international transactions should be on everyone's mind when talking about eliminating cash.

The downside of going cashless aren't hypothetical or as far-fetched as people think. The whole society can be put on hold overnight. We can see this happening in front of us.

Using whatever payment method for convenience in itself is fine. But, eliminating cash as medium, without providing a better alternative, one that can still work in disasters where power or network is down, is wild.

What difference does the elimination of paper money at POS make to ability to access electronic deposits? Unless you are saying people should not bank at all and keep cash under the mattress?

> What difference does the elimination of paper money at POS make to ability to access electronic deposits?

The difference it makes is that now you only have one way to access your savings. Any failures, technical issues, outage, etc. and you're out of luck to say the least.

The principle is that you shouldn't rely on a single system ever. If you're eager to go that way be my guest. I was using a real life scenario of how that turned out bad for people.

I don't care about paper vs electronic. I care about relying on a single point of failure.

How is any of this different with cash withdrawals? You're still withdrawing from a digital account.

The issues with physical currency are almost entirely self-inflicted. Governments should retire the smallest denominations and introduce larger coins/bills. In the US, all of the coins are worth so little that the only practical coin is the rare half-dollar. Retire all of those worthless coins, require transactions be rounded to the nearest half-dollar or dollar, and issues with physical currency for the user will go away.

Now of course, the government won’t do this as they want physical currency to be inconvenient so they can track you and deny you access to your own money when they find it convenient. We’re in an era of growing authoritarianism. Hopefully we survive this one.

This is a really good point. And one of the reasons I hardly ever use cash is having to deal with so much annoying change. If you eliminate most change… cash becomes not a big deal

I would argue the root cause of this phenomenon is inflation and the first step we should take is to make the dollar a stable unit of measure not to consciously allow its value to fall.

Deflation is worse than inflation, and it's hard to hit a single number, so central banks aim for low, stable inflation. 1-2% inflation isn't very perceptible vs 0 but avoids deflation.

Please explain why deflation is worse.

Cash becomes an appreciating asset. It leads people to hoard cash rather than invest in stocks and bonds, and delay purchases stagnating the economy.

Japan mid 1990s to mid 2010s is a real-world example: https://en.m.wikipedia.org/wiki/Lost_Decades

In the worst cases, deflation causes demand to drop causing a recession, which further depresses demand. https://en.m.wikipedia.org/wiki/Deflation

So people would save more?Savings is how the wealth of a nation is built. Capital breeds investment. The more people with capital the better.

The only reason that people invest in the stock market is to maintain wealth.

What would you do if you could count on your dollars buying 2% more next year? Would you shove all your dollars in a mattress and forgo buying food so you could save a few more?

Or would you keep buying everything you do now and worry a little less about investing to maintain value?

Less dollars in the stockmarket enriching others and more dollars in savings building personal wealth is what deflation brings. The only people this is a problem for are stockbrokers.

Economies are built on the movement of money not the sum of money. It's truly positive sum where the act of spending money allows someone else to spend money.

Highly suggest picking up some econ primers, as its almost universally agreed even mild deflation is destructive.

Economy is the movement of money. That is not a measure of wealth. There can be a lot of money moving around with nearly everybody living pay check to paycheck. People are better off if they can build wealth. It is more stable for society to make it easy to build wealth.

It would take a lot of evidence to convince me that deflation is worse in the long run for human flourishing than inflation. I don't care about the economy as conceived by bankers and economists. If ever more people are flourishing the economy is working.

If a few are getting exorbitantly wealthy, at the expense of everybody else, by being close to the flow of new money, the economy is not working.

We have been at inflation so long there is no painless way out.

You know what? That sounds like a great idea. A single dollar doesn't buy much these days. Maybe we should add a zero to all the bills too.

I live an hour or so outside of Austin and people still primarily write checks as that's the only acceptable payment method, along with cash.

My new wife said, "Wait, why not just use Stripe? I'll tell them."

I had to explain to her that one does not simply pull forward a society thirty years into the future. There is an incredible amount of cultural inertia to overcome.

So I carry a lot of cash out here.

You'd be surprised. I visited South America and all I saw was phone payments... They basically skipped the credit card age, as cards were never popular among the poor.

Aren't the phone payments backed by credit cards or do they by preloaded vouchers?

Bank accounts directly I’d assume. Why add another layer of indirection?

It varies by country but a lot of them are just virtual debit and credit cards because the payments run over the card network rails.

It’s not surprising that a lot Murica is decades behind most places in the world. Especially places where foreigners visit.

How is it behind? I've not been at a store in a while that I couldn't use apple pay or a card? I know it's popular to bag on America, but I figure most of HN is better than that.

Until Apple Pay and other smartphone-related payment methods became common, the USA credit card was technologically behind much of Europe, Canada, and other developed countries.

Chip-and-PIN (EMV, https://en.wikipedia.org/wiki/EMV) is the standard in Europe and Canada for relaying credit card info & authentication.

Many USA retailers were stuck using the credit card's magnetic stripe for entering card info. Evidently the USA still hasn't moved to Chip-and-PIN, with Chip and Signature being more common. Updating the point-of-sale terminals has been the chokepoint supposedly, https://lauraclery.com/chip-and-pin-united-states/.

I use very little cash in MA. But checks are still pretty much the default for a lot of people doing various services for me. I can just leave a check for someone like my housekeeper. I could presumably make arrangements to pay in a different form (including cash) but why bother? And, in many cases, it's my bank actually "writing" the check and delivering it.

I'd change if it became an aberration or weird to do but it's just not a problem in general. (And I wouldn't try to pay by check or cash at Walmart for example.)

That's wild. Here in the UK, tradespeople usually have a card reader, or some accept bank transfers.

It's becoming more common but for someone like my housekeeper, I may not even be home and can just leave a check on the counter. As I say, I could doubtless make alternative arrangements but a check is the default and it's easy.

For someone I need to pay regularly like a cleaner I would set up a bank transfer recipient in my banking app (or website) and then payments - either one offs or regularly scheduled - are simple, instant and free.

And so is writing a check and leaving it on the counter--especially for a service that is somewhat predictable but actually isn't on a set schedule. She texts me that she's coming next week, I write a check and leave it on the counter, done.

Well, it's not really done, is it? She has to go to the bank and cash the check, right? It's not the end of the world, sure, but it's an extra trip compared with a bank transfer -- with a bank transfer she has the money ready to be used immediately.

I believe (even in the US!) you can pay in a check by taking a photo in your bank app.

The money isn't instant though. People paying for such services with a cheque would do well living a few weeks in someone else's shoes.

90% of the people I'm paying are businesses. If an individual wants cash they can ask and I'll pay cash. I wouldn't just assume someone prefers everyone to be paying them in cash or screwing around with various electronic payment options that aren't super-common where I live.

OK, good to hear.

My house cost $240 to clean. Handing around fat envelopes like a wise guy is a macho dream but not practical.

The argument was for electronic payment against cheques.

Wow, a whole 4 bills - that envelope must be bursting at the seams.

It typically is these days.

>She has to go to the bank and cash the check, right?

I'm guessing she has a banking app like I do that lets her deposit the check in about a minute?

Between the bank writing/mailing checks for you to pay bills and an app you can use to deposit checks, checks just aren't the friction that they used to be. That's probably a big reason why there just isn't a big outcry in the US to get away from checks. For most of us, it's just way, way down the list of day to day pain points.

piling up 20 checks for the week and going to the bank for 10 minutes isn't a big deal to most people.

most here won't take it. My maid won't. They will take venmo, check, or cash though.

They do here in the US as well. It's not high-tech. Unless you get a sole proprietorship handyman or something, they'll likely take a card. Most will charge you the 3.5% or so extra for card payment though because that's what they have to pay.

The vast vast majority of tradespeople in Texas are what’s called “cash under the table”. They don’t report their income and so never pay taxes. All take cash only or something like a check made out to “cash” instead of a name. It’s how many “poor” families qualify for assistance yet drive $100k pickups and all their kids have the latest iPhones and gaming systems.

The lack of fast free digital money transfer infrastructure in the U.S. is something that seems crazy to anyone in the EU.

Every EU country (and the UK) has had fast free digital bank transfers for decades now. Here in the UK we pay all “casual” services like cleaners, dog walkers etc via a simple, quick bank transfer. It’s great, I don’t need to keep cash, and person providing the services has the money in their account, ready to spend, about 500ms after I tap the “send” button on my phone.

I can see how cheques are convenient for purchasers, but for suppliers they’re a bit of nightmare, as they need physically deliver the cheque to cash it. Then wait for it to clear, and also take on all the risk of it bouncing. All of that just goes away with proper digital money transfer technologies.

FedNow (https://www.federalreserve.gov/paymentsystems/fednow_about.h...) just went live in July, 2023. It will take some time for adoption.

We have free digital money transfer in the United States. Venmo, Zelle, PayPal, Cash App, etc. I don't know why you'd believe otherwise.

The are two problems with this: 1. You need to have all 4 to reach a significant fraction of the population. 2. They are fake real-time transfers [the app says the money has been transferred but it won't actually be delivered for a couple days] instead of actual real-time transfers (which Europe has). This means there are much more susceptible to fraud [you think the sender has sent you the money--so you ship him the goods or whatever--and the next morning or so the money is gone from your account.]

In CT I use Venmo and Zelle to pay just about everyone. Cleaner, yard guy, electrician, plumber, handyman, etc

Everyone takes Zelle or Venmo.

Aren't cheques even worse for privacy though? Not only your bank knows exactly who you paid and how much, the seller also now has your actual name since it's just written on the cheque - at least when paying by card they get nothing.

Maybe I'm getting it wrong - cheques are something I've only seen in films, in my country no bank accepts them since 2020 anymore, they've been completely phased out.

I was given a chequebook when I opened my current bank account in 2004, I've written 8, all of them in the first 10 years.

Same, until I moved to a rural area. I did a lot of research about this place but didn't discover the pervasiveness of the cash society until I moved here.

Last I looked, checks had privacy regulations. Most other payment methods don't really. I'm also my bank's customer. For most payment companies, I'm the product.

What sort of "privacy regulations?"

Here - that being outside of Austin in Texas - I think the root causes for this behavior lie with tax cheats and ineptitude.

Checks certainly are not completely phased out in your country, just no longer common for consumers.

And shopkeepers can still take a name off a card.

> I live an hour or so outside of Austin and people still primarily write checks

I can’t think of an area within 65 miles of downtown Austin where checks would be common. Which direction from Austin do you live? East maybe?

I Denmark we are removing the 1000kr bill as of May 2025. from then on the highest bill. is 500kr which is roughly equal to 80 usd.

Denmark Is the most cashless society I have yet experiences (and I have been traveling a fair bit).

This comes with pros and cons. and I think the reason why it works is because of an incredibly high social trust.

Besides high social trust, I assume also a great IT infrastructure with guaranteed high uptime, a tech literate population willing to adopt new technology and not be stubborn to change, plus a small business environment not focused on cash driven tax dodging, like in the German speaking countries.

yep, especially because a lot of people use debit cards that only work when online.

and yes, even on small markets merchants charge with a handheld terminal.

I live in a middle-income country and it's now not unusual to see beggars with card machines at the red light.

In the UK we have anti-money laundering rules for banks commonly known as 'know your customer' where they are obliged to inquire about how one's business works. I can imagine a few interesting conversions as a result.

crypto was probably a godsend.

I moved to Sweden ~2.5 years ago and I can count the number of times I've used cash on one hand.

It's definitely less private, but the convenience is unmatched. Honestly, I don't even know what the modern Swedish notes look like now!

Sweden also has pretty public tax income records.

Lol, I actually experienced something similar in Australia recently trying to sell second hand goods.

Of course I asked for payment in cash, which the buyers duelly provided.

But it occurred to me as I observed the new $50 notes in my hand, which were of a new design that I'd never seen before that it had actually been so long since i'd handled physical currency that I wasn't really sure whether the notes in my hand were legitimate designs or not.

> but the convenience is unmatched

I've actually timed this.

It takes ~8 seconds to fish out the card, insert it, wait for approval, and replace it in the wallet. Roughly similar time frame for unlocking your phone and approving the NFC transaction.

It takes ~15 seconds to fish out a C-note, insert it into the self-checkout bill accepter, retrieve the change, and put the change into my wallet.

Delta of 7 seconds.

Let's say you're a typical tech worker, and your time is worth on the order of $120/hr. 7 seconds is 23 cents to you.

Let's further assume you just paid 23 cents to buy $80 worth of groceries as a non-convenience fee so the data brokers and/or the Feds don't know your precise shopping habits.

You just paid a 0.3% "transaction fee" for your privacy. The Visa network takes on the order of 2+% to DESTROY your privacy. You're getting a really raw deal here, by choosing this "convenience".

> You just paid a 0.3% "transaction fee" for your privacy. The Visa network takes on the order of 2+% to DESTROY your privacy. You're getting a really raw deal here.

I assume it is not the case in Sweden or most of Europe. Here in Belgium, the fees are maximum 5 cent or 0,2% whichever is lowest (apparently, to be lowered to 0,1%).

It's a bit higher in France at 0,2% + up to 1% or so bank fees depending on the shop's bank, but that's still lower than anything I'm reading in this thread.

So at least here in Belgium it's cheaper for me to use a card, according to your calculation. Which doesn't take into account what I must do with the change, as I can't always just use a new note and sometimes I'll have to count and use that change. I also have to go out of my way to find an ATM.

The delta is even greater - due to covid most credit/debit card payments were contactless (from [1] 60% in general, 73%+ at bars/restaurants) - I'll assume it will take awhile for contactless payments to drop back down to pre-COVID levels, if they ever do.

For contactless payments, I can see payment taking less than 5 seconds total. In Canada, probably spend more time dealing with tip/receipt screens than the time required to perform the contactless payment.

[1] https://www.riksbank.se/en-gb/payments--cash/payments-in-swe...

In the US, we have $100 and $50 bills officially in circulation, but many places will refuse to take them as payment, even though they will take smaller denominations. I believe this is usually described as avoiding counterfeit money and/or not keeping more than a certain amount of cash in the register.

In the UK we have £50 notes which are notoriously difficult to use as cash since there are many counterfeits in circulation and it's hard to differentiate between genuine and fake. We also have notes issued by Scottish banks which are legal tender throughout the UK but good luck finding a retailer outside of Scotland willing to accept them.

> We also have notes issued by Scottish banks which are legal tender throughout the UK but good luck finding a retailer outside of Scotland willing to accept them.

Yeah that shit should be illegal.

I have a hard time getting change, because in my country ATMs like to spit out large denominations. But for my daily activities (the bus, really) I need change. In the cases where I would need a large bill I use credit cards.

The highest denomination in my country is worth about US$40, but that is a large amount of money. Yesterday I payed for lunch for 4 with about half that.

So I wish the larger denominations would just go away.

On the rare occasions I use them--mostly when traveling--I've noticed some ATMs offering a choice of denominations. But it was certainly true historically that ATMs tended to spit out bills in denominations that were at least at the high end of what people used for day to day transactions.

The ATMs I use use the least number of bills for the amount you asked. If they have lower denominations, I sometimes make two withdrawals in order to avoid the larger bills.

I don't think I've ever seen an ATM in the US spit out larger than $20s which is basically the largest denomination you can count on a store taking even though there are $50s and $100s in general circulation. (Which has essentially been the case for many decades.)

Casino atms stock 100s, but they are a special case.

> high social trust.

With the rise of ML, and people salivating over the data inherent in currency flow, I suspect that trust may soon go the way of the dodo.

In the US, anything that makes money tends to get helped along. Regulators look the other way (until some knucklehead starts stealing from rich people), and even the lowest-level employees become "stans" of their bosses.

I am a believer in the promise of socialism, but, like communism, it's something that works on paper, but people screw it up.

Capitalism works. It does that, because it is completely in line with human behavior. Human behavior is pretty awful, when we don't have external restraints, so unrestrained capitalism is pretty awful.

Despite that cynical stance, I do have hope for the future. It will almost certainly make me uncomfortable, when it comes (as my own generation did, for my predecessors), but I think we'll prevail.

it is dangerous to assume that the US culture is the default culture.

social trust is not a new thing in Scandinavia. it has been a part of the society for centuries.

Denmark is arguably also more capitalistic than the US. the median wealth is almost double that of the US. hence the Danish system, despite some of the world's highest taxes, easier allow people to build wealth.

I understand. I was raised overseas, and am intimately familiar with non-US cultures.

I love Scandinavian socialism, but I have also watched as US-style capitalism has permeated even the most resistant societies.

The Internet, and the platform it provides for social contagion, are probably responsible for that.

Additionally, it is easy to have socialism, with a relatively heterogeneous population, but nations like the US and, increasingly, many other nations, make it a lot more difficult.

I am curious, what do you mean with US-style capitalism?

Denmark, and EU by extension, is far from perfect. But I do see less oligarchy-leaning tendencies in the EU vs. the US. and I don't see that this is currently changing, quite the opposite.

My immediate understanding of US capitalism would be an oligarchic type of capitalism where regulation favour those with wealth already.

Basically, the "Greed is Good" school of capitalism. It's a fundamental personal attitude, as opposed to corporate position, or governmental ideology.

Very self-centered, self-absorbed, make sure that everyone else knows you're rich. You are only considered "successful," if you can display certain wealth tells.

That tends to breed certain behaviors; regardless of the society.

> I am a believer in the promise of socialism, but, like communism, it's something that works on paper, but people screw it up.

The premise itself is screwy because it doesn't account for human nature.

Good point.

I have visited Denmark and this is definitely last country I want to live. Just simple the worst. I've lived and visited about 40-50 countries in my life, maybe more, it is hard to count.

For me Denmark is best example of modern slavery with brainwashed slaves. I was born in USSR and current Denmark looks very similar. The values of society are too far from what I respect.

I believe if this work in Denmark all other countries should avoid it with all costs.

It’s literally the first time I’ve heard anyone saying this about Denmark. I’ve been to a ton of places, including Denmark, and can’t even understand why would you have such opinion. Care to explain?

That’s a three paragraph rant but provides zero examples about what values it is you object to.

I'm in Sweden, a strong contender for the most cashless country, and I don't know what the banknotes look like. They were changed some 5 or 6 years ago and I haven't paid with or even withdrawn cash since then. For illustration, cash is generally not accepted outside of grocery stores and some chains. For a typical restaurant, coffee shop or takeaway there's very little chance they take cash. Street vendors may take cash but will definitely have a proper cashless payment method.

I really don't like cash and am happy to see it basically dead in the country. I'm also very concerned about privacy, I'm that sort of HN person - never had a Facebook account, run self-hosted email for 20 years, use Signal for messaging as much as I can, etc. But I don't think cash is a good solution to privacy. I'd rather see laws and (better) cryptocurrencies as the privacy toolkit.

One common concern I see from US-centric articles is about your transaction history being sold for ad targeting, etc. That at least is illegal here. A store is not allowed to track your history of purchases or similar unless you opt in, such as via a store loyalty card. Banks are not allowed to disclose anything about your accounts except in some investigatory contexts, but definitely not for commercial purposes. So neither "the store will track my purchases because I pay by card" nor "the bank will sell my history to advertisers", which would be major issues for me, are actual concerns.

>I'm also very concerned about privacy, I'm that sort of HN person - never had a Facebook account, run self-hosted email for 20 years, use Signal for messaging as much as I can, etc. But I don't think cash is a good solution to privacy. I'd rather see laws and (better) cryptocurrencies as the privacy toolkit.

We wont see those. Instead we'll see more enchroachment of privacy - because cash was actually the solution: existing for millenia, trusted, no transaction fees, no monitoring of purchases, non remotely invalidated, not requiring fancy technology to use, works from buying a car to getting some help as a beggar on the streets.

>That at least is illegal here.

Would that ever stopped companies pulling that shit?

The fees of cash are considerable for many businesses. At least where I live returning money to the bank is not free.

> I really don't like cash and am happy to see it basically dead in the country.

What would you do in case of a emergency or natural distaster? Basically a situation where any of the following is not available for any period of time: power, network, financial infrastructure, access to digital devices.

1. On personal level: Maybe your wallet and phone was stolen

2. Region: Power/Network is down

3. National level: the whole infrastructure is down or under attack

Have you been in such situation or thought about it?

This is usually the go-to arguments for cash, though I think it is not the right ones. The right argument is privacy.

These things can be handled easily: In case of an emergency you can just revert to writing credit notes to each other, which is is spirit the same as cash (contracts denoting that someone owes you something).

> On personal level: Maybe your wallet and phone was stolen

This is the same as forgetting to withdraw money and an unfortunate accident. It is also handled quite well already, as modern people have credit cards in their wallet, in their phone and on their watch. So there is already a 3-way backup that needs to break.

> It is also handled quite well already, as modern people have credit cards in their wallet, in their phone and on their watch. So there is already a 3-way backup that needs to break.

Personally, I'd not use the word 'backup' if you can lose all three in a single accident. Also, these are just different forms of access, none of these would work if the infrastructure is down. It seems you dodged my points.

I'm not advocating for cash, more like warning that an online-only system isn't resilient enough in the first place.

In the scenarios I provided, if cash doesn't exist (as per OP wishes), the only solution I see would be going back to trading goods/services. What valuable possession/skills does a person have.

Such robustness is currently a subject of government studies and planning. It's definitely an area of concern.

A personal-level outage is a problem but less so than with cash. I have three separate items on me I can use to pay - my card holder with bank cards, my phone and my watch. That's more redundancy than with cash, which is one item (wallet).

Power or network outages aren't a big issue. I've experienced those and it's smooth. Most payment machines work fine without power (batteries) or without network because they then store the transactions locally and send them later. I've even had lunch when the lunch restaurant was having IT problems and couldn't accept any payments - they noted how many people came on paper and I came back the next day to pay, as I'm sure the vast majority of patrons did.

Bank or card issuer outages are handled by using another card or payment method. If some bank's cards aren't working (uncommon but it happens), mobile payments generally work still, and most people have more than one card.

Major national level outages are a concern. It would be impossible to buy e.g. a train ticket as those require immediate payment, so if somehow Internet was down nationwide, you couldn't get a train ticket online or at the ticket machines. This is one major goal that the e-krona (state-issued digital currency) project is meant to address as e-krona is intended to also work offline.

For you last point regarding national level outages: I am quite sure that trains companies would instantiate emergency systems in that case – maybe just by letting people travel for free. Such an event is also not expected to last for long.

Quite possibly, yes. There's also the consideration that such an outage would likely be part of an even bigger problem.

Over here, like most of Europe, we're pretty safe from natural disasters aside from storms causing local power outages. There are no earthquakes, tsunamis or similarly destructive events. So a hypothetical situation where payments are down nationwide for a significant period of time would almost certainly be part of an even larger disaster where a lot of infrastructure is non-functional due to military attack or something akin to a complete crash of all computers.

Not a natural disaster, but there's something similar happening for about 10 days in Central America.

The largest Telco was hit by ransomware and this has affected most of their systems. They are unable to receive electronic and card payments, or sell digital packages, it seems their billing, CRM and Helpdesk systems are down.

So all prepaid users are able to use the inrernet and call for free.

> I have three separate items on me I can use to pay - my card holder with bank cards, my phone and my watch. That's more redundancy than with cash, which is one item (wallet).

All of which are electronic and depend on centralized services. Bank notes and coins work offline and without electricity.

Not too long ago, a restaurant I went to with a coworker had an Internet outage and no card or mobile payment would go through. I paid for the whole bill since I was the only one carrying cash, then we went to the nearest ATM to reimburse me.

I always carry cash. I don't use it often but it always works, even if everything else fails.

The hardware/software infrastructure for cards and mobile payments is separate. We get card outages or Swish (mobile) outages occasionally, I don't remember any that affected both. Card payments are expected to work offline.

We're so dependent on IT systems that even cash doesn't always work. One of the most significant outages we've ever experienced was when Coop, a grocery store chain, had to close all its stores for a couple days because of an IT outage. It didn't help that the stores accept cash - the payments still couldn't be registered, receipts couldn't be printed, so the stores were completely unable to function.

We clearly need a robust fallback solution. Some kind of payment system that can work despite centralized outages (a bank's systems failing) or local outages at the merchant. But that shouldn't be cash. The practice of exchanging fragile, filthy pieces of paper whose ownership you cannot prove once outside your possession belongs to the past, we can do much better now.

This is a real concern, but even if I keep cash for use in an emergency, stores and banks would also need to be prepared to handle cash in an emergency and I doubt they are today (since no one uses cash).

Telling people they need to use a less convenient payment method only to keep it alive for an emergency also seems doomed to fail.

The correct solution is probably to force banks and critical stores to always accept cash + encourage people to keep some cash for an emergency. But changing the banknotes (and making the previous ones invalid) every 10 years doesn’t help with encouraging people to save cash at home. That’s another one of those US-isms that blow peoples minds: that dollar bills of any age are legal tender. That and the use of paper checks. I think it was the mid 80’s the last time I saw a check.

> Telling people they need to use a less convenient payment method only to keep it alive for an emergency also seems doomed to fail.

Who said that? Certainly not me

Personally, I'm not advocating for cash. I just think it's stupid to brag about eliminating cash while putting all your savings and trust in a fragile system and infrastructure . There's nothing revolutionary about that.

People should have options and backups.

I meant that (Telling people to use cash more to keep the system afloat) would be one potential solution to the problem, but not one I think would work.

I think people should not have to use cash, and I certainly won’t. But I do think society must have a resilient payment system - even if only as backup.

> I do think society must have a resilient payment system - even if only as backup

On that note we can agree. The goal is having a resilient system where you can access your funds when you need it most.

See my other comment for backstory:

https://news.ycombinator.com/item?id=39239919

> That’s another one of those US-isms that blow peoples minds: that dollar bills of any age are legal tender.

That's not so impressive when the National Bank of Sweden for instance is legally obliged to exchange any banknotes it issued for current ones, regardless of their age. You can theoretically get current money in exchange for a 17th century obligation or certificate issued by the bank, though even early 20th century notes are worth more as collection items than their nominal value.

They do, but it's a hassle and means people are reluctant to keep money in their mattresses (which might be a good thing). It's unfortunate when it comes to resilience however. Realizing after the big two-week-blackout that the 10x SEK500 bills you stuffed away for this emergency are invalid and would need to be posted to the central bank before you can eat, is not a good experience.

I share to a large degree this viewpoint that I'd rather see laws and better technology as a solution to the ever connected and tracked future that we live in. I try to use cash in Sweden since we don't have those laws yet, but replacing paper, metal and cashiers would be good if the drawbacks could be resolved.

The laws we already have do not work. A large part of Swedish intelligence policy is to trade information with partners like the US, and I would consider it extremely unlikely that highly valuable data like bank transactions was not part of that. The US intelligence policy in turn is known to use such information occasionally for commercial purposes, when it has a national impact.

The Swedish courts are also not trained to deal with low-value evidence data. There is an assumption that if data exists, it must do so because there was a reason someone deemed it worth gathering. This assumption breaks apart when data is always collected as a default, which means courts would need to be retrained when this kind of data is presented as evidence (we are slowly getting there but still very far from where I would feel safe). It also makes investigatory contexts dangerous, especially if records are part of fishing operations where single bit errors in storing, retrieving, copying and relaying records can have extreme effects. This include swish which records are very common in court hearings. In some cases it seems that only a single swish record is enough for someone to get charged with a crime, with the accused having to provide evidence to prove that they are innocent.

> I really don't like cash and am happy to see it basically dead in the country.

That's fine for you but some of us need to buy illegal drugs.

This is the same Sweden that issued a bogus arrest warrant for Assange?

If you think they won’t point and click seize your assets and freeze your accounts prior to trial for publishing the wrong thing, you’re crazy.

Cash is the backup, and must be preserved. Electronic payments can be centrally censored.

Traveling from Norway 10-15 years ago Denmark was fairly backwards when it came to electronic payments.

10-15 years is also an insanely large amount of time when it comes to digitalisation.

15 years ago IE6 received its final stable release, but it would still go on to be supported for another 8 years. That’s also the same year Chrome was released, but it would take another 4 years before it overtook IE in market share.

I used cash semi regularly when I moved to Denmark nearly 10 years ago. I haven’t touched Danish currency in the last 3-4 years.

Put it other way 10 years ago we had Python 3.4, Rust and Windows 8.1 :) What I'm saying is Norway at the time was pretty much where Denmark is now. Even 20 years ago you could go by pretty much cashless except one way bus tickets in certain cities. That said I doubt Denmark has any lower level of social trust than Norway so it's unlikely the cause. As the locals then explained credit card transaction fees were held at unsustainable levels and Denmark lacked its own national clearance network.

Not sure what you mean with “national clearance network”.

With regards to CC fees, there have been none for (DanKort) cardholders since 2005. I haven’t had a non-DanKort rejected since 2016 or 2017, and the only times that I pay for card fees is when I use the CCs issued to my companies.

Yet somehow, you still can’t buy tickets on the bus with a CC, only cash or apps.

Yeah I imagine apps have filled the niche that for whatever reason was unserviceable by credit cards.

My eldest has gone off to uni in Scotland this year, and he’s literally spent no cash at all in his time there. The only cash he uses are 1 pound coins for the gym lockers, and they return when you’re done.

He spent 3 months in Germany last year, and used cash for just about everything.

Scot here! Especially since the advent of Apple and Google Pay, more and more people use cashless payments - with our phones always on our person these days, it's very convenient.

There are still some holdouts though - it's only recently I've started to see taxis that routinely accept card payments, and without a ludicrous extra processing fee.

I've travelled a lot, and I'd say Norway, Sweden and Denmark are all way ahead of Scotland in terms of cashless.

Just as there are checks and balances against a prime minister becoming a dictator, there should be checks and balances against a state abusing a digital currency.

Removing cash makes that hard.

how do cashless transactions require social trust? you trust your bank, I trust my bank, and we don't have to trust each other at all. if you can't trust your bank, you are SOL.

You trust that your spending habits are not shared with malicious actors. You trust that the government does use your data maliciously. You trust there is a fair dispute process, etc.

There are plenty of countries where I would not dare to register certain spends on my card or where the risk of using cards would be considered high.

I believe once we go fully cashless, we'll regret it and wish we could go back.

I can barely enjoy a full day without being required to bring my phone / debit card with me because the register does not accept cash.

I can barely enjoy a full day without being required to bring cash because the vendor does not accept card.

(Not actually true since basically everyone accepts card in the UK, but it illustrates that your point makes no sense.)

With cash being the default for thousands of years of history and everything, and card meaning card fees, tracking, tied to a bank, and so on, it totally makes sense.

> Not actually true since basically everyone accepts card in the UK, but it illustrates that your point makes no sense

So you tried to prove me wrong by giving a made up example?

The fact that my example is not really true is a stronger argument against you, not weaker.

I don’t see how?

I will break it down:

1. You argue cashless is annoying because you have to remember your card/phone in addition to cash.

2. I countered that you could equally say that cash is bad because I have to remember cash in addition to my card/phone. Which makes them at worst equal. You just have to remember whichever one is accepted.

3. Except - as I stated and you highlighted - that is not really the case. Almost everywhere accepts card - more than accept cash, so not only is cashless equal to cash, it is better.

(From a "having to remember things" point of view anyway.)

I appreciate the break down.

I'll clear it up, cashless is annoying because instead of being able to walk outside with a couple of bills, I have to bring my whole phone or wallet with me because some vendors just don't accept cash. Sometimes I even prefer paying with cash because it helps the vendor avoid the fees they have to pay for each digital transaction.

It's got nothing to do with remembering.

> instead of being able to walk outside with a couple of bills, I have to bring my whole phone or wallet

That still doesn't make any sense. Firstly, 99% of people carry their phone with them pretty much everywhere so you're already a special snowflake.

Secondly, instead of "a couple of bills" you have to carry... a single card. Wow. So much hassle.

> Sometimes I even prefer paying with cash because it helps the vendor avoid the fees they have to pay for each digital transaction.

Yeah I have more sympathy with this but my feeling is vendors prefer cashless even with the fees - at least debit card fees (~0.5%), maybe not credit card fees - because cash isn't free. You have to spend time taking it to the bank, dealing with employee theft, etc. etc.

I feel like CBDCs could really help here.

> Secondly, instead of "a couple of bills" you have to carry... a single card. Wow. So much hassle.

In case I’d get robbed, I would only loose a couple of bucks vs losing my debit card (which does not require PIN until a limit). I live in a bas neighborhood, so walking outside when it’s dark side is not fun. So having no valuables on me feels good.

> Yeah I have more sympathy with this but my feeling is vendors prefer cashless even with the fees - at least debit card fees (~0.5%), maybe not credit card fees - because cash isn't free.

I have the totally opposite experience, most small shop owners I’ve spoken to have often asked me if I had cash instead of card, some would even give better deals and include free fries If I had cash in me, it’s on that level and one if the reasons why I often prefer cash now. I actually had a discussion regarding this with my local barbershop and he told me how much he hates people who pay with cars because of those fees he has to pay.

I had no idea about CBDC, had to look it up. It’s an interesting concept.

Who knows, maybe this is the good timeline and "money goes the way of the dinosaurs" so we get to enjoy a Star Trek-like future.

Change Star Trek to Soylent Green or Elysium and you're closer.

That's a new one. Genuine question, why do you prefer using cash instead of using a phone or card?

Cash is useful in cases where your phone/card isn't working. E.g. if your phone has run out of battery, you are in a location that has a poor signal, your account has been locked due to a suspicious/unusual transaction (even if legitimate), etc.

You don't need it all the time, just for emergencies.

Systems you want to use in an emergency have a tendency to start failing when you don't exercise them regularly. That's my primary reason for using cash. Privacy is the second. The tactile sense for how much money I spend is the third.

Transactions through credit cards and similar are not anonymous. Having third parties track your daily activities is beyond dystopian.

Not new at all. Many people feel that way. Lots of good arguments too.

Cash is free and easy. Electronic payments add cost and complexity that sometimes results in failure.

Sometimes I don’t want to walk around with my valuables on me, I just bring a small sum enough to satisfy my groceries.

I do this especially when it’s dark outside and I have to go out to shop, this way, I don’t lose anything significant if I get robbed.

Another good reason is that some shops have to pay a fee for being able to accept digital transactions, for some shops, the fee is quite a lot. So paying with cash is preferred and helps them a bit.

Lastly, while it sounds shady, being able to pay in cash keeps me from being traced by the government. I don’t really have anything to hide but having the option to be anonymous If I want feels good.

You don't like to bring your valuables with you, so you bring cash instead of a PIN-protected debit card?

I'd rather loose 10 bucks than letting them take my debit card. PIN is not required until a certain amount.

You buy $10 of groceries at a time?

It’s not exactly 10$ every time, it varies. But it’s a small amount.

If I have to buy larger amount of groceries, then I wait until daylight. No way I’m carrying more money when it’s dark outside.

> I can barely enjoy a full day without being required to bring my phone / debit card with me because the register does not accept cash.

Buy somewhere else (if humanly possible), and tell this to the vendor who doesn't want to accept cash.

This is increasingly difficult, at least in Western Europe, without it being a significant imposition. I've had several instances where, despite absolutely no signage or indication anywhere outside the business, inside the business, or on the menu, I've waited in a queue, ordered something, and only when I'm ready to pay been told that the, eg, coffee shop won't accept cash. I've also been to several restaurants, especially in London, where despite officially accepting cash, attempting to pay in cash will result in the staff returning and asking you not to if at all possible: it appears that the staff at those restaurants are not actually allowed to handle cash payments themselves, and have to have management handle them directly.

While it's not clear that these behaviours are legal, it does not appear that there is any enforcement.

In England at least, those behaviours are legal, without a doubt [0][1]

I'm not aware of a law that requires them to clearly sign post which payment methods they accept. I think there are various laws in other places in Europe though. I'm definitely all for that

They're taking on the risk of spoilage by not putting in any effort to make you aware before ordering - and hoping you'll just pay by card due to the sunk time cost. Shady but not illegal AFAIK.

[0] https://www.which.co.uk/news/article/what-are-the-rules-on-p...

[1] https://fullfact.org/online/legal-tender-cash-in-shops/

I assume part of it is that if you accept any cash, you have most of the downsides without any of the upsides (e.g. not having to deposit cash at the bank).

It's not vendors but governments that are pushing for this.

Vendors also prefer it if they don't have to have cash in the store.

Currently in China which is pretty much fully cashless and I fucking hate it.

Get Alipay. Link your credit card. Put in a pin, but no not that pin because it has two consecutive numbers. Pick a different pin. Forget it by the time you need to pay and reset your pin. Go to the grocery store and have to download a new app to pay, they can’t take Alipay even though it’s the same parent company. Oh the machine didn’t work, so pull your phone out again to scan. And the endless additional services you need to sign up for to avoid price discrimination upwards of 200%.

It’s a nightmare. Japan has it right, keeping with a cash based society.

When I was visiting China in 2019 it was just about still possible to use cash, but it was obvious the way things were going. As a visitor I wasn't able to use any of the available cashless payment methods (no bank account, for a start), so I don't know how visitors and tourists will cope.

Okay, but somehow the rest of the billion people manage it?

I don't understand, how does this negate any of what I posted?

Perhaps it implies you're particularly fussy, and the system works for 1 billion+ people.

It might also imply that 1 billion+ people also have a bad experience, but can’t do anything about it.

It's much easier if you have Chinese ID or at least vefified Weixin (WeChat) account. AliPay with linked credit card is a kludge for tourists. It works, but only as good as you expect from a kludge. Like I was able to pay pretty much everywhere with AliPay in Beijing, but a few vending machines stubbornly refused to accept it.

>I can barely enjoy a full day without being required to bring my phone / debit card with me because the register does not accept cash.

But how do you get a regular re-supply of your cash to pay the places that take cash?

For me, I would have to make a regular trips to the bank ATM machine to withdraw cash. That type of errand is inconvenient which is why I haven't done that in 15 years. It's been so long that I don't even know what my secret PIN code is to withdraw cash. I pay for everything by credit-card.

I can see where bringing a debit card can be inconvenient but the alternative of ATM withdrawals is inconvenient too (and also vulnerable to physical loss/theft).

Don’t most bank reimburse atm fees? I just keep my cash topped off whenever I go to the grocery. It’s a lot more convenient to pull out my wallet than to look people up on vemno/zelle imo.

Be glad there are ATMs. I'm old enough to remember getting cash involved checks and bank tellers--assuming you had an account with a local bank because otherwise it was more complicated.

How horrible, a slight inconvenience!

I mean, sorry for the sass, but when did it become acceptable to base an argument on slight inconveniences? Being alive is slightly inconvenient most of the time.

>, but when did it become acceptable to base an argument on slight inconveniences?

It's not about avoiding any and all inconveniences.

My comment was based on gp's framing of the situation as "being required to do <X>". He wrote that a cashless businesses was not ideal because it means "being required to bring my phone / debit card with me".

Ok, I can accept that inconvenience exists but then the alternative to "hassle of debit card" is just substituted with "hassle of being required to regularly re-supply the inventory of cash on hand".

Substituting <X> with "debit card cashless" with "visit ATMs and carry wad of cash" didn't seem like a slam dunk tradeoff. Another issue I remember with cash is getting a stack of $20 bills from the ATM and then trying to spend it but the business' cash drawer doesn't have the appropriate inventory of small denomination bills to give back the correct change. (Even if the ATM can also spit out smaller $10s or $5s, they can often run out which then leaves only the larger $20 bills left for dispensing.) The credit-card transactions eliminate that issue because you just pay the exact amount.

Sure, if transactions privacy is the #1 concern, then one will happily withdraw cash and deal with its inconveniences. But privacy wasn't in the gp's comment so I just interpreted it at face value.

Take out $10k every few years....

All my in person transactions are done with cash where possible. It is not inconvenient at all.

I withdraw a sum of cash at the beginning of each month at the bank.

I carry maybe ~150 euros whenever I’m out doing stuff.

What’s interesting is I spend less this way - and preserve my privacy.

"I believe once we go fully cashless, we'll regret it and wish we could go back."

The major stores would be a problem, but on an individual basis I would bet many people would switch to silver or gold if cash were truly eliminated.

Benjamin Franklin — 'Those who would give up essential liberty to purchase a little temporary safety, deserve neither liberty nor safety.'

Same for convenience

What liberty? The ability to make transactions without a centralized and/or permissioned finance system

On the other hand, if you're living in a street with lots of criminal activity and money laundry operations, maybe you think differently about it.

This has happened to me while living and travelling in the Northern Triangle of Central America in the 2010s which at that time were the unsafest not-at-war countries of the world.

Depending on the time of the day and location I just ran errands with only the smallest amount of cash needed and an old phone. And sometimes I kept an emergency $1 bill to pay the bus in my socks . If I was robbed, the most they could get from me was the small cash I had on hand.

As money became electronic, organized crime changed tactics, and instead of only taking money from victims, they'd take the victims to ATMs to withdraw all their funds. Banks then reacted by limiting withdrawals at about $300 in ATMs depending on the risk of the area.

Yes this is one way it shows. Another is that there can be shops in your street that have no apparent viable business, but they exist only for the laundering. They are run by poor people. Every once in a while the real criminal (boss) shows up. It can cause all sorts of problems in good neighborhoods. Without cash, these problems would not exist.

I doubt it. The Nordics have been cashless for a long time and the personal inconvenience in the transition was essentially none. It went by pretty much unnoticed and I don't think many people miss cash or wants to go back.

Now I am against a cashless society for other reasons, mainly ideological, but claiming it's less convenient feels odd.

The nordics will not always be a democracy (same for every country/people), then they will regret it. That may be 10 years from now or 200 years from now.

> It went by pretty much unnoticed and I don't think many people miss cash or want to go back.

I can’t count how many times I’ve heard elderly people complain about vendors not accepting cash anymore.

WHAAAAATTTTT!!!!!

“…thousands were queuing in Nairobi to have their eyeballs scanned as part of the “Worldcoin” project, founded by OpenAI chief Sam Altman. In exchange for handing over their biometric data, some 350,000 Kenyans each received 25 free crypto tokens, worth approximately $50. Those tokens were transferred directly via Kenya’s main mobile payments app, M-Pesa.”

Actually that doesn’t sound so forward thinking when you consider that the UN has been doing since 2016:

“In 2016, the UN World Food Programme trialled a system that issued relief payments through the use of biometrics. Refugees were able to buy items from the supermarket using their biometric data as a credential: all they needed to do was scan their iris to pay for an item. The idea was to improve convenience and prevent fraud. Since that trial, the World Food Programme’s Building Blocks initiative has become the world’s largest humanitarian use of blockchain technology.”

Haha a UUID tied to my biometrics. What could go wrong.

Yeah it sucks. I can't quite put my finger on it, but is seems like giving up every transaction to the government and corps. That seems like a terrible terrible thing just for a little bit more convenience. I have some bit of hope though, it seems like Gen Z is seeing that "tech fixes everything" is bullshit and see to be enjoying less materialistic and "gotta get the latest/greatest". Millennials were likewise less materialistic than Gen X. Hopefully people come around to using tech where it makes sense and use it less in those areas that are detrimental to quality of life and where simple solutions work just fine.

Pakistan is still a cash based economy, many outlet either deny card payments or apply a processing fee to encourage cash transactions.

"State Bank of Pakistan (SBP) data indicates that the Cash in Circulation (CinC) has increased to Rs9. 2 trillion ($32 billion) at the end of June 2023, which is equivalent to 30 per cent of the total money supply (M2), or around 11pc of the national GDP." [0]

0: https://www.dawn.com/news/1779399

If you take white economy and black economy its maybe 50:50 in Pakistan hence the we are still using mostly cash. Most of the rich and the ruling class are rich because of illegal/untaxed wealth so its not in their interests to get a digital payment system. Where as the taxes are so high that the rest prefer not to use digital systems either. I don't know if its still the case but 15-20 years ago post dated cheques used to go from company to company without being deposited into the bank as it was an easier way to transport large amounts without it getting officially documented. Even the most used digital systems in Pakistan have so far been of moving cash from 1 place to another. Like you deposit money in 1 shop and it is paid cash to your family in another shop. Either the shop pay 17% sales tax by getting payment through credit card or takes a cash payment and hide the sale

I really really really like cashless payments

I really really really dislike that my money can be whisked away at the whim of a cray government or a glitch in the system

A government can reduce the purchasing power of cash too.

https://en.wikipedia.org/wiki/2016_Indian_banknote_demonetis...

Or just issuing new money at a rate that exceeds demand for the money (meaning the relative desirability of the money, which relates to the trustworthiness of the community using the money and the economic productivity of the community using the money).

Like when the population pyramid starts turning upside down and the benefits promised to older people need to come into fruition from a smaller and smaller labor supply.

Edit to respond to 4bpp:

> With cash, they can only do it to everybody at once or not at all.

I think government can use the new money to inflate the price of certain things quicker than others, effectively advantaging certain portions of the population, which is what I allude to in my 3rd paragraph.

For example, inflating asset prices lets those who own more assets (or certain assets) lose purchasing power more slowly than those who do not (see most labor sellers).

This is a somewhat related example of how a policy change for all can be designed to affect certain populations differently:

https://www.brookings.edu/articles/the-hutchins-center-expla...

Use lower CPI to update tax brackets, and higher CPI to calculate Social Security benefits, i.e. increasing wealth redistribution from young to old without explicitly saying it.

But with cash it cannot "disable" selectively

That is a good point!

But not for you specifically.

With cash, they can only do it to everybody at once or not at all. With a number in a bank's database, they can selectively expropriate people based on any criterion with as little effort as between zero (in the case of tacit understanding) and a dozen (if they have to remind the banks that a tax audit is technically overdue or something) phone calls.

> Edit to respond to 4bpp:

Just respond to the actual comment next time.

I really really really would think that Bitcoin fills this exact need.

There's a lot wrong with the cryptocurrency world and with Bitcoin specifically. So much wrong, that I'm afraid we closed the one way out of government and corporate-controlled "digital money" and all the risks that comes with. But maybe it never was a good "way out" in the first place: maybe there never was a way out at all.

I keep hoping the grifters and scammers and marketeers move on to the next hypetrain (metaverse, ai) allowing the bitcoin or other cryptocurrencies to be salvaged and become the way out again. But that hope is diminishing.

This is preposterous. Bitcoin is more traceable, more transparent and more censorship prone than every form of currency conveyance we know of including cash, diamonds, physical gold, etc… The fact that’s 2024 and some people still believe Bitcoin enables privacy just goes to show how crypto enthusiasts are candy brained fanatics.

To add to this, I also anecdotally know many more people who lost Bitcoin due to bad key management or keeping their Bitcoin in a platform that failed instead of cold storage. I don't personally know a single person whose money disappeared from their bank account for no reason.

Crypto is mostly useful in the absence of good financial infrastructure in your country. Otherwise the risk premium makes no sense.

I too know far more people who lost Bitcoin due to mistakes, or negligence or such.

But I also know quite a lot of people who lost a lot of money in the 2018 banking crisis. So I highly doubt your really don't personally know a single person who lost money this way.

How did people lose money in the 2018 banking crisis? My understanding is that bank deposits were fully insured in that crisis--whether or not they exceeded FDIC insurance limits.

> FDIC insurance limits

Not everyone lives in the US. The US is not the world, but the 2018 crisis was worldwide.

Here's two (edit: three) of several use-cases in which friends and people I know, in a western European country, lost money.

A couple who signed the contracts of a house suddenly couldn't access their savings on (DSB, some local bank), a bank that went bankrupt. Eventhough they eventually got their money, after nearly a year, they lost the contract, had to pay big fines (some of which they got back after long legal battles).

A friend with a lot of money, way over €100k, in a savings many from the sale of a company meant for his early pension, lost everything above that guaranteed €100k when his bank (IceSave) failed. He still has a royal pension (I'd call him rich). But he no longer had access to his dream of a yacht and villa in the meditereanean. While you may think "I don't care of some rich guy lost money", and while I can understand that thought, he did lose money. He lost more than I'll probably end up with in my pension.

A couple in my parent's street had to sell their house because of their bad mortgage. It probably was bad to begin with, but suddenly that mattered. They had to sell that house for far less than they would've gotten without the enforcement - I know the guy who scooped it up in the auction and know how much higher he sold it a year later without any significant improvements made. What's more, the couple then had to move (costly) and rent (under pressure, so not much room to say "no" to too expensive or bad places) for way too much.

My dad lost nearly his entire "investment mortgage", which was for his pension too. He is doing fine and it was a mortgage on only a small part of the house, but the portfolio went almost worthless within months.

And so on. There are quite some stories of people who lost a lot.

Sure, that's different from "I lost my bank-card, now my whole account is gone", or "I forgot my PIN and cannot ever access my pension ever again".

But to say that no-one ever lost any money in the "traditional banking system" due to neglect or poor management is simply not true. It's simply on a different scale - but the outcome is on a very personal scale nontheless.

> But I also know quite a lot of people who lost a lot of money in the 2018 banking crisis. So I highly doubt your really don't personally know a single person who lost money this way.

That’s like saying I know people who lost money due to Bitcoin volatility due to massive crashes. Losing money in the 2018 banking crisis was a result of your property value falling and thus your mortgage was underwater, not because money in the bank itself disappeared in some way.

You basically brought up something totally unrelated to the common failure modes of Bitcoin being discussed about a totally unrelated industry (2018 banking crisis was not about personal banking issues but about a massive credit crunch in bank investment arms due to speculative losses that rippled out into other markets)

> not because money in the bank itself disappeared in some way.

It did in many European banks.

I can’t find any story that customers lost their deposits. Europe like the US has insurance similar to FDIC so that shouldn’t happen. Any news stories to corroborate your claim?

Lightning has pretty good sender privacy.

The Canada trucker protests are proof that the government can easily stop transfers even if they can't size the actual asset (which I would like to point out, they technically cannot legally do that with bank account either).

The whole thing is just postulating about a hypothetical then getting mad when it's completely wrong.

The "You cant stop our unstoppable money" to "it's disgusting that you have the power to stop our unstoppable money" pipeline

Why is this "preposterous"? I never mentioned privacy, and certainly never claimed bitcoin provides it.

Also, bitcoin never claimed to enable privacy (contrary to monero and zcash). All it ever claimed was to be pseudonymous. It has been crystal clear to anyone in the field that "if people can link your addresses to your person, they know all your transactions". In fact, this has often been presented as a feature (though I personally don't really think it is a good one) in which e.g. all payments to and by a politician or NGO can be transparantly tracked by the public.

Nonsense. Satoshi’s Bitcoin white paper has a section on Privacy.

Almost a third of that chapter is explaining the shortcomings and caveats of the system.

> Some linking is still unavoidable with multi-input transactions, which necessarily reveal that their inputs were owned by the same owner. The risk is that if the owner of a key is revealed, linking could reveal other transactions that belonged to the same owner.

Bitcoin maybe not crypto in general. Monero for example is entirely private.

Bitcoin is getting better all the time. There are more people focusing purely on payments in the bitcoin space than you think. The lightning network is halfway usable now, and federated mint type systems (like cashu[1]) are very promising.

[1]: https://docs.cashu.space

Bitcoin is still "improving", as tech. I know.

But the community at large, is still crap. Rugpulls, pyramid schemes, bad management, misleading marketing and so on, are more common than not. It's easier to get scammed or grifted than to find a good, solid provider of a service. That's even more true for the cryptocurrency world at large, but even for the "niche" of bitcoin(maximalists) this goes.

The "crypto" world is 99% scams and 1% misguided nonsense, I agree. Wrt bitcoin, there are a lot of extremely talented, honest and trustworthy people working on both the technical side and providing services. Look at the projects and people sponsored by Opensats [1] for some good examples.

I know many people will reflexively disagree with the notion that the bitcoin world isn't entirely made up of bros and scammers.

[1]: https://opensats.org/projects

But if the cray government(s) wanted to, they could prevent you from turning that BTC into fiat and vice versa.

That's only an issue as long as you need fiat.

The same way they prevent people from turning cash into drugs? How’s that working?

The problem is that (2) goes away by just putting your head in the sand, while (1) is what you're confronted with no matter how much you try to not think about it.

It's technologically feasible to create centralized digital cash that is much more anonymous than physical cash. You can do it by using zero knowledge proofs where you have vouchers & nullifiers. It's virtually the same idea that powers Tornado Cash.

It's tractable but challenging, every single transfer of a digital-cash note would necessitate an entry into a public Merkle-tree. You could mitigate this by introducing a multitude of denominations (a separate Merkle-tree for each one) trading some anonymity-set size for the mitigation. Another possibility is to introduce special cash pools that have expiry dates, incentivise their use with lower transaction costs. The transaction costs would have to also be ZKP vouchers but much more flexibility on those, such as rapid expiry.

If a government was crazy enough to do this, they would give up all control over how the money is spent. The only control they would have is whether or not to shut the whole thing down. Discrimination would not be feasible, reversing transactions impossible. They could still print money of course.

Governments did everything they could to stop Tornado Cash.

Uncensorable, anonymous digital payments is the very last thing the state wants for its citizens. That allows private people to raise (and pay for) an army.

Preventing rival armies within their territory is the primary and most important function of a state.

I think what's required is electronic cash, something like a CBDC with an electronically transferable, partially anonymous system that still allows offline payments if case the central computers get knocked out.

GNU Taler satisfies one half of these constraints (cashlikeness + taxability). The Swedish e-krona pilot also has a token based component to allow offline payments.

We already have this. It's called bitcoin. For offline payments, there's physical devices like opendime and potentially Chaumian mints like cashu.

I think the advantage here is that it's ordinary money, which if people fail to obtain it, will lead to them defaulting on their debt and losing real things.

When you have enormous amounts of debts denominated in a currency, so many time the price of those things that would be lost, its value is almost entirely determined on what interest rate the central bank sets. If you hoard it to get people to default so as to obtain the value of the collateral, the central bank will printing to stop you.

Meanwhile, there's no point in trying to do that kind of thing with bitcoin. The value of the collateral is probably less than the value of the physical cash. What you do then is to invent your own bitcoin and hope that somebody will accept units of it.

For this reason I believe that the fair value of Bitcoin is zero, but I can't know when it ends up at zero, so I'm not shorting it, just as I am not shorting the US real estate market, even though it's clear that from a discounted-cash-flow PoV it must be incredibly overvalued, provided that it wasn't incredibly undervalued back when interest rates were at 1%.

Lets be honest, bitcoin is not usable for every day transactions.

OK, honest question, have you tried it recently? Have you used a modern lightning wallet?

No. Too complicated to understand the risks. I would use it only if it becomes mainstream and user friendly.

opendime is a one time use bearer bond that costs ~$10 per device. It cannot be used like cash - you have to transfer the full amount - and it can break much more easily than cash.

cashu is still online and its anonymity claims should be taken as suspect given that no cryptocurrency has managed to achieve it in practice.

So to summarize: Bitcoin only really works online, offline equivalents are more fragile and can’t be used for the same use cases as cash, and anonymity continues to lag physical cash.

Maybe this is pedantry, but opendime isn't really one-time use. It's designed to be passed between people many times and spent on-chain once. There's also satscard (from the same company) which has 10 unique "slots" so can be spent on-chain multiple times.

>offline equivalents are more fragile and can’t be used for the same use cases as cash, and anonymity continues to lag physical cash

OK, no argument there.

From what I read about open dime you do a one way physical action which changes the circuitry to reveal the private key when you plug it in. I’m not sure if you can validate the amount on the key before hand but once that seal is broken you are saying you’re the one to spend it on-chain as at that point someone else could have the private key and already spent it. Additionally you really have to know how this device works to accept it as payment cause otherwise someone could trick you by giving you the unsealed portion without you realizing the implication and you have to know how to safely verify it. With cash you only need to know how to detect counterfeit notes.

The same issues with opendime apply to satscard - cash can be transferred thousands or tens of thousands of times and doesn’t carry any extra cost and can be trivially broken up into smaller transactions. This thing requires gas fees to transfer onto and off the card + the cost of the card itself + limited number of transfers if you want to change the amount.

These devices are clearly meant more for long term cold storage using physical security to avoid losing the key and not as a way to replace cash transactions. Totally different applications even though cash also can be intrinsically used as long term cold storage (just more complicated physically)

I can't imagine any major government would willing give its citizens anonymity when they have such a perfect excuse for ratcheting up surveillance with a database of our entire financial lives.

We're actually (i.e. here in Sweden) having big pre-proposal investigation to determine what can be done to keep cash available, for reasons of anonymity and security against, let's Russian interference with banks or fibre cables.

But I prefer an electronic solution and do not want physical cash. This is of course a slightly risky view, but I believe that it can save us huge amounts of money and strengthen our economy.

I personally started using digital payments once phone touchpay systems came out previously you had to take out cash or card from your wallet to pay so I would still use cash. But once phone payment became common just tapping your phone to pay had a lot less friction than taking out wallet and paying cash or by card.

they will get you by convenience

Clever boy

Of course they will. Why shouldn’t they?

Oddly, I’ve never been inconvenienced by my wallet.

Yeah, I carry a small wallet and pretty much never use phone pay. I'm taking something out of my pocket in either case and there's never a question whether my credit card will work or not.

If a card supports tapping and you have 1 card in a thin wallet, could you tap your wallet in the same way you could tap your phone?

I started using digital payments once I got an Apple Watch. Double-click a button on the side, tap the watch on the reader, I'm done. Very little friction and good security; it is really a no-brainer. Provided the reader accepts Apple Pay, that is....

Fees on digital payments by merchants should be banned, if we are going into a digital era without cash and an expectation that everyone pays digitaly then they should come along with us and be more accommodating or atleast more realistic if they want our business, even if it is just a small cup of coffee the convenience of tap and scan is far superior to dragging your feet to a machine in the middle of the night looking over your shoulder always expecting the worst.

The new soccer stadium in St. Louis is completely cashless. Upon arrival, you attach a form of payment to a scan of your face, then the system tracks you and your purchases throughout the stadium.

No thanks.

You can use a banknote for an unlimited number of transactions, with no intermediary, and no tax per transaction.

States and banks benefit by printing this tool for you, because in return they control the movement of money when it comes back to them, and its value.

But with digital currency, they've hit the jackpot, realizing that they can have their cake and eat it too: they can control the movement of money, its value and even tax it on a per-transaction basis. And without any advantage other than saving space in your pocket.

Crazy idea: instead of fighting the consequences of surveillance society, how about we fight the surveillance ITSELF? Everybody here agrees surveillance is bad, yet I bet right now there a few HN readers working on surveillance tech, and not at least most of us are voters, some even involved a bit deeper in politics. How about we actually do something against that what we know it's wrong?

Not used a coin or paper bill for several years now. It’s now at the point where I don’t know what the most common bills and coins look like since they were changed a few years back and I have never owned most of them.

I should keep cash as a backup just like I keep some canned food, but I wonder how society would work in that scenario when many stores don’t have cash registers, many bank offices don’t allow cash deposits and so on. The US would be far more resilient in that situation.

I was in a large supermarket (Tesco) today where they were experiencing "technical difficulties". A repeated announcement over the tannoy stated they could not accept contact-less payments, not by card, not by phone.

They were still accepting cash and physical card insertion (Chip & PIN, or Chip & Signature).

Despite that lots of people were getting flustered at the checkouts (manned and self service) when they were unable to pay. Always carry some cash!

My bank freezed my access to my debit card and online bank recently, without a reason. They just sent me a message that I should visit the branch in person. Not going to happen. Fortunately I could open a new bank account online and had some spare cash too.

For the first time I realized that I'm a slave to my bank. They can just freeze my money just like that.

In a fully cashless system you'd be a complete slave to the system.

Yes. Complete a complete slave. LeVar Burton will have to come out of retirement to make a Roots sequel so that the world can understand your harsh mistreatment.

You are a slave to many systems - labor markets, product markets, food markets - all of which are not controlled by you. You can be cut off "just like that" if the powers that be choose to do so. In the modern world you simply cannot survive without depending on other parts of society. Given the alternative, I don't find this to be such a bad compromise.

A few months ago, Australia’s second biggest ISP died for a few hours. Retailers tied to their network were unable to process non-cash transactions.

Months ago, in Singapore, similarly a single relatively small server farm had issues, blocking for a long time a very large number of transactions.

(Some details at: https://www.channelnewsasia.com/commentary/dbs-digibank-payl... )

The news outlets in Singapore then commented: please, as these things can always happen, do not forget to bring some cash with you...

Visa Europe had an outage for a few hours in 2018. see https://www.theverge.com/2018/6/1/17418684/visa-cards-europe...

Canada's payment network had an outage for over an hour last year, 2023 Sep 23. see https://www.cbc.ca/news/canada/moneris-network-outage-1.6976...

I don't see why I should give a corporation information about all my payments. I already carry a phone with me, that's enough to spy on where I am, they don't need to know what I do or who I do it with. Privacy is a right, not a privilege, I don't see why I should just throw it away for a little convenience.

(Since when is privacy a right? Just curious. I always saw it as a privilege. Having my room with my bed to sleep in.)

Since SCOTUS hallucinated it into being to make their pro-abortion ruling in Roe v Wade. It's the only time I've seen the right to privacy taken to the extreme.

If it’s written in the law then it is. Depends where you live.

It's fairly common:

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

> Over 150 national constitutions mention the right to privacy.

Not the US, but:

> In the US, privacy and associated rights have been determined via court cases and the protections have been established through laws.

Privacy is not a privilege, it is a right.

There exist natural rights. It is not frequent to find, say, a "right to breathe" or a "right to walk" as an explicit topic, because the absence of its object has critical implications.

Same for the "right" to privacy. It is something that would be strongly defended because its absence would not be accepted.

Does anyone check their credit card bills or bank statements to be sure that all of the charges are valid and for the correct amount? It seems like if you use electronic payment for everything there would be a lot of items to verify. Or do you just assume there's never any errors?

Yes, we do. But nobody we know does. We are fanatic at tracking our spending too, though, and that seems to be a dying art.

I think it is common to check that all the charges are valid--since there is a lot of credit card number theft around. But I think it is uncommon to check that they are the correct amount--instead you eyeball the numbers and don't do further checking unless a charge seems unreasonable.

Regarding Mr Corbyn's strawberries, if he takes them (or eats them, spoils them etc), is he not then in debt with Aldi? In which case his cash serves as payment of his debt?

I guess you'd be in hot water for the prior act of stealing though

Taking something does not legally incur a debt, it's just a crime. The merchant did not agree to lend you anything, so there's no loan, so you can't pay it off with "legal tender".

I've been reading this for going on 30 years and I still have some in my wallet which is accepted everywhere. Seems to me this is just a recurring trope trotted out for want of an article topic.

I like to stop by the ATM on the way to the store and get a few bills out, then use it at regular stores. It freaks them out every time but I find it is a better money to use.

No it's not. In my neighborhood, businesses are starting to offer cash discounts. The credit card companies are getting too greedy with their fees.

What’s interesting is that cash 10% more valuable than digital money. I wonder if that gap will keep increasing.

Be worried when laws get passed against barter systems that would circumvent these systems

I don't think barter is a realistic way to circumvent the disappearance of cash. Sure, it'll work once in a while, when you happen to have something of equal value that the other guy wants—but most of the time it'll be such a drag on every transaction that transactions just won't happen often. Want to get some groceries? Are you just going to hand the cashier a pair of shoes in return? There are good reasons physical currencies have existed for thousands of years, in many forms across many societies. I think rather than barter, we'd have to fall back on something like gold, seashells... Something that's hard to fake, hard to make, easy to appraise, and easy to carry. Like cash.

I will always recall the chaos of being in a northern Minnesota tourist town (Ely) when the single fiber-optic line serving the region was cut. I sure was glad our group brought cash. All the people with only third party companies willing to pay for them some time in the future had their trips and plans ruined. But that's sort of a trivial example. It could be much worse.

And then there's the rent seeking inherent in any commercially provider payment service combined with enshittification. No single company payment system will remain "good" for long. Not that credit cards are good to start given the puritanism and censorship they impose. And that's not even mentioning the US state dept. control of those networks preventing donations to political groups like wikileaks.

Cash matters. Having some corporation promise to pay for your stuff 3 days in the future means giving up control. You might not care now, but you might care in the future when $localpolitics get dicey. Imagine not being able to pay for an abortion with $companypay because it's illegal in $company's legal place of operation.

Plus cash is just so much more convient and faster.

> Plus cash is just so much more convient and faster.

There are many reasons I'm not anti-cash, but I am really struggling to think of a single example of this specific statement being true. Just acquiring cash at all means I have to take time out of my day, repeatedly, to make withdrawals. Then I have to carry it securely (as well as the cards I need to get hold of more), which is annoying at the best of times and pretty much impossible when I'm out running, say. Handing cash to a merchant means they need to figure out change, and eventually I end up carrying a bunch of coins and they are even slower to spend than notes. Boarding buses was so much slower when each person paid in cash. Paying for a beer or meal needed the staff to take the money back to the till and return with change. When going abroad I need to use notes and coins I'm unfamiliar with. Honestly, when is cash faster?

Yeah, I usually carry some cash in local currency. But I often end up with coins I can't be bothered to figure out or with a ziplock bag of currency I ultimately never end up using in a drawer at home. And, if I were really stuck in a place that unexpectedly required me to use cash for everything I almost certainly wouldn't have enough with me.

> Honestly, when is cash faster?

Try to give a random person $100. Can they accept credit cards? Unlikely. Do they have the random cash app installed you use? Maybe. Do they have a bank account? Depends on where you live, and it could take days, and you have to bring long numbers with you and input them into your banking app.

Or simply turn off the internet.

Give them $103, where they don’t have change and you don’t have singles. Give them $337, most people don’t carry around that much. I ran into this problem recently paying contractor. I could have gotten enough cash from safe but neither of us could likely have made the exact amount.

If you choose common app like Venmo or PayPal, they likely have that installed. It is annoying to do the dance about which app to use. But the transfer is done before can get more cash. With contractor I was glad they took Venmo instead of having to write check.

I have to agree with this. Stating that cash is more convenient is just false. It might be more familiar to some, or more culturally accepted, but saying it's more convenient than just touching the machine with your card or phone - outright false.

That's all completely separate from the fact that cashless payments shift immensely shifts the power balance and takes away all of your payment privacy - irreversibly.

Cash is faster in situations where you tip. You don't need exact change, just cost of service + tip and you can walk away.

I still love using cash in restaurants because the credit card dance adds 10 minutes waiting at an empty table. The server always drops off the check and runs, as if I'll need to think about the 43 dollar bill, getting them back is a whole thing, then waiting for them to return with my card and 3 receipts I don't want is another.

Since I'm in the states, i'm already tipping. I put down a few bills and go about my way. Same for things like pizza delivery, why pay part on credit then tip at the door(because basically no company gives the e-tips to the driver, you're just donating money to the company at that point).

Tipping in cash requires having enough small bills to make the tip. I remember having to ask for change in small bills or break another $20 to have the right amount for tipping.

Also, the switch to chip chard should mean faster credit card payments. The server brings the terminal, you enter the tip, and then tap or dip your card. That is how it works in Europe and Canada. I hope we can avoid the printing and signing to receipt that happened when I visited London.

I tip at restaurants, pubs, hairdressers, taxis (and likely more that aren’t front of mind) where I live in the UK. It’s as quick as saying “make it <x>” to round it up, and done.

Cash in restaurants pisses me off because it limits my consumption to what I can afford with the cash I’m carrying. What if I fancy the most expensive main, or a really nice whisky at the end of the meal?

>Plus cash is just so much more convient and faster.

You mentioned "puritanism and censorship" as your main issue with cards (and I assume with other digital payment systems), but to the best of my knowledge that's only an issue with online payments, for which cash isn't really possible at all. Unless you feel that sending bills in an envelope to some postal address you see on a website to be fast and convenient.

When I pay with cash the transaction is settled in literally 15 seconds. When I pay with a card it takes days, involves dozens of people and many capital and mantainance heavy systems which are extremely fragile. Additionally the digital payment services provider will take their relatively large cut so the process of the transaction can drag out over even longer times and greater costs. With cash you pay only the cost and tax and you need not ever think of it again.

The experience of using cash is very simple, fast, and reliable. In the future digital payment systems may become those things but unless you're in an urban area they currently are not. Your experience of using digital payment systems in person in, say, a coastal megalopolis differs significantly from using it to buy a shovel at a hardware store in a small town. At best (with credit or debit cards) it's almost as convient as cash, most of the time.

If I want to exchange value with another human person cash makes it easy and simple. It is far from easy with digital systems involving arbitrary third party corporate persons.

As for online stuff I mostly use bitcoin.

Crypto is an electronic replacement for cash that is ideally not dependent on centralized entities incentivized by processing fees (still in progress of course, but we're rapidly getting there!).

I think privacy crypto will be big if cash goes away.

Obligatory Neuromancer (1984) reference:

His total assets were quickly converted to New Yen, a fat sheaf of the old paper currency that circulated endlessly through the closed circuit of the world's black markets like the seashells of the Trobriand islanders. It was difficult to transact legitimate business with cash in the Sprawl; in Japan, it was already illegal.

I am fairly convinced that using cash will slowly be labeled as a "criminal" activity and gradually shamed into non-use by regular people.

> I am fairly convinced that using cash will slowly be labeled as a "criminal" activity and gradually shamed into non-use by regular people.

Of course. The only people who need cash are criminals and terrorists. Now move along citizen.

That would not work at all in many countries. There are some with a strong attachment to cash.

Sorry, my comment was too vaguely written, but I meant to imply that it won't be the government that does this, but regular people enforcing social norms.

"We aren't the kind of people that use cash," and so forth.

> The only people who

There have been political groups spreading and promoting exactly that concept.

"Thieves and junkies", they say. Forgetting completely "people with dignity" - also because that image is fading from aggregate memory.

Well to be fair, in my country (Denmark), that is mostly the case. For normal purchases, using cash is very much not the norm.

But paying a carpenter, cleaner or similar, who will give a lower rate (and not pay income tax and VAT), that is very much the norm (though socially frowned upon). Also drugs I guess.

demand for bitcoin will keep climbing.

Luckily we still have crypto

It's strange that governments are not minting more digital currency if the demand for physical currency is falling.

Because it doesn't solve any problem that anyone has? Bank transfers and card payments are easy, fast and already widespread, at least everywhere except for the US.

Is printing tons of physical money solving problems people actually have either or is it just increasing costs from having to manufacture, transport, secure, etc physical money.

We all just read an article about society going cashless without any Blockchain stuff. No need to print physical money just hand out cheap loans digitally.

Tell me you're a bitcoin guy that's never taken a single Macro class without telling me...

Government prerogative is to create currency ex-nihilo; there's no need waste a bunch of energy in that process.

A money printer doesn't just magically create money out of thin air. Printing it as a cryptocurrency would use less energy than printing it physically. Alternatively the government could just edit a bank account it already has and just increase its balance.

When you deposit money at a commercial bank, and they send the excess cash to the central bank, they do get central bank reserves.

However, that doesn't mean it happens routinely. Most banks probably just send the cash between one another, decided via a clearing house with no central bank middle man. I am only describing the cash handling process here by the way. 99% of the business still operates based on electronic reserves.

The government doesn’t care about cash. They make a little money printing it. But are much more concerned about the state of the economy and don’t care how people are paying for things.

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