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Comment by impossiblefork | Hacker News Reader

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.

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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.

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)

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