17 ms·

Why we should fear a cashless world

292 points by mantesso 11y ago

BIackSwan 11y ago
Genuine question - What about a "cashless" currency based on blockchain? (a la bitcoin). Wouldn't it be and not be under any single entity's control at the same time?
- PythonicAlpha 11y ago
  In theory, yes. But currently, there exist enough structural problems, as much I know, that Bitcoin or similar schemes can not replace cash. Further, even with a total secure system, there will always be the pressure of the governments to control it.
- imglorp 11y ago
  One lesser point, bitcoin is pseudo-anonymous: you can always follow the money even if you can't identify all the people who handle it. It might be argued then that any entity who knows what you're spending and where has plenty of control over you. There are anonymous coins that don't have this property.
- adrianN 11y ago
  Cash and current forms of electronic payment have the nice feature that the seller gets their money almost immediately. As I understand it, bitcoin transactions take a while to confirm. I wouldn't want to stick around in the shop until some miner got around to my transaction.
  - mirimir 11y ago
    Small payments using BitPay require one confirmation, and that typically only takes a minute or so. Their fee (1%, I think) covers reversal risk.
    - stan_rogers 11y ago
      Now imagine being lined up at the equivalent of a cash register with every single person in front of you taking "a minute or so" beyond what a transaction currently requires. Nobody's hiring additional cashiers (or whatever they'd call them) or self-checkout kiosk supervisors (to go along with the extra kiosks) if there isn't any extra money to be had.
      - gonvaled 11y ago
        You fire one cashier and install 100 self checkout machines. Problem solved!
        stan_rogers 11y ago
        And replace those cashiers with people who have other job titles to manage inventory shrinkage. There's no getting around the fact that you need eyes near the doors to make sure that everything gets paid for, and you need enough eyes to monitor the traffic: more parallel traffic, more eyes needed. (Anecdotally, I see more staff at self-serve checkouts than at cash registers in stores that have both, yet the cashier lines move more quickly than the "more convenient" kiosks.) I'm sure there's an ideal world living in some people's minds, but it's not part of the external reality and probably never will be.
        gonvaled 11y ago
        I avoid self checkout - slow and inconvenient. But it's just a matter of improving the technology: we'll get there eventually.
        logfromblammo 11y ago
        I avoid self-checkout because the entire machine is usually set up around the assumption that I will try to walk out of the store without paying for one or more items, or by futzing the bar codes so that I pay $1 for a $30 beef roast. The self-checkout technology will never improve as long as that assumption remains. If you can't trust the customer to not steal a pack of gum, you can't trust the customer to not steal an entire beef tenderloin. The professional cashier does not need to keep every damned item on a giant scale after scanning it, because they are an agent of the store, and presumably trustworthy enough to notice and stop shoplifters and scammers. And they usually don't have to halt the entire checkout process and wait for a manager to come by and restart it whenever anything even mildly out of the ordinary happens, such as using a coupon. You can't improve the technology when the premises are wrong. And the premise is that you can turn a grocery store into a glorified vending machine.
  - zanny 11y ago
    The "takes a while to confirm" is a shortcoming of politics in bitcoin today. Blocks are limited to 1MB, there are more than 1MB of transactions almost all the time now, so some transactions (the ones paying the lowest fees) get delayed multiple blocks and take forever to be confirmed. That will eventually be fixed, and once we are back to normalcy where transactions aren't limited by block size, you can regularly get - even on feeless transactions - multiple confirms in seconds. Your transaction won't be finalized until it enters the block, but once you have a half dozen or more confirms the probability of failure of that transaction entering is extremely low - well below 1% at that point, insofar as I have never seen it happen myself and don't know anybody who has had a multi-confirm transaction miss acceptance.
- mtgx 11y ago
  Not necessarily. What we're seeing with Ethereum, for instance, which seems to be the main blockchain technology that banks want to use right now, is that it was "customized" to fit the banks' needs to the point where the blockchain used by the banks doesn't even need to be public, the way Bitcoin is. It also doesn't need to work based on the "consensus" mechanism. And it could be further modified so that each transaction can also be wiretapped/blocked directly by the NSA, and so on. I don't necessarily blame Ethereum for this, although they did have a hand in following the banks' rules and essentially writing software for them, but this would've probably happened even without Ethereum agreeing to do it. Maybe the banks would've forked Ethereum's technology and then they could've done whatever to it, or they could've written their own tech from scratch.
- unknown_apostle 11y ago
  The biggest danger with blockchain is that if it ever fails, it would fail for technological reasons and its failure would be instant and complete. Like encryption being broken. Instead of government money, where the failure is telegraphed years in advance, e.g. by reckless abuse of the printing press.
  - zanny 11y ago
    The equivalent of breaking encryption on bitcoin is perfectly forging paper money, or breaking the security on any financial institution that enables you to steal all their money. Also, if someone can break sha256, not only is bitcoin screwed, but so is the Internet as we know it and every secure institution period. The overnight "instant and complete" breakage of fundamental assumptions about security would destroy everything. So interestingly, if you could break sha256, you could probably break into almost any financial institution and steal their money as well. The security of a blockchain is in its popularity. As long as the code is open (and I'll admit, I am not a fan of how bitcoin mixes the default interface (BitcoinQt) and the default implementation (BitcoinCore) together so much) and there is investment in the market, there will be strong financial pressure to consistently and diligently analyze and track the source code for weaknesses. Bitcoin at 3B has at least a dozen security firms that have looked into its crypto. If you had another crypto that broke a trillion you would have thousands of companies constantly safeguarding and testing the crypto of the currency in the same way Google offers ludicrously high bounties for anyone who can break Android/Chrome/ium security.
- flatline 11y ago
  The blockchain is mostly a solution in search of a problem. Bitcoin is cool, but I doubt it will ever have large-scale applications beyond DNMs and hacker/hobbyists. - The current biggest problem that bitcoin faces is one of scale - and there's no clear solution in sight. Why on earth would you want every little transaction on the blockchain? If I buy a stick of gum, that doesn't need to be on public record for eternity. It is impractical and unwieldy. - Centralized systems are always more efficient than decentralized ones, and systems naturally tend toward centralization. Bitcoin falls down under centralization, which we are also currently witnessing with the hash power tied up by a few largely unknown Chinese operators. There are proposed solutions like pseudo-centralization with LN where bitcoin just becomes a settlement layer for off-chain contracts - and the details behind LN are still so primitive it is not clear it will actually solve any real problems. What you are talking about in practice for something at scale is a centralized blockchain of some sort, which is really just a distributed, immutable database, with some sort of trusted signing authority. What exact advantage does that give aside from potentially non-reversible transactions, which are a clear non-starter for most consumer purchases? There are already services that offer true non-reversibility for special cases where this is desired. There has so far been no viable application for blockchain technology as a replacement for cash except black/grey market purchases.
joefarish 11y ago
Cash, on the other hand, empowers its users. And convenient electronic payments doesn't in anyway empower users? Also, if people are unbanked and below the poverty line I would expect they would be more concerned with getting by than "Orwellian levels of surveillance."
- eveningcoffee 11y ago
  > And convenient electronic payments > doesn't in anyway empower users? Maybe you did not understand the article? It did not argue about convenience but about peoples control over their wealth. > Also, if people are unbanked and below the poverty > line I would expect they would be more concerned with > getting by than "Orwellian levels of surveillance." In many cases this is a big problem as it allows the Orwellian government to have larger control over people.
- kagamine 11y ago
  If people are below the poverty line then extra fees associated with transaction-handling, cost of technology for access etc are a big deal. Cash is closer to free to use. If you buy something used, a PC, fridge, whatever, because you can't afford new, do you want a transaction fee in addition? It may only be 1% or $1 (not accounting for the price of a smart phone and network costs) but that is still $1 more than you needed with cash.
  - lotsofpulp 11y ago
    Cash is not free, there is a time cost to handling the cash, depositing it, there is a risk cost for vendors from employees stealing it, there is a risk cost from being robbed...there are always trade offs. A lot of these comments mention that cash gives the government less control, however try visiting India or China or Greece and ask people the real reason they use cash. It's to evade taxes and launder money! Same with cash tipping in the US. So in some ways electronic is better to help catch the cheaters, but if it's not transparent it could pose a problem if the wrong people get in charge.
    - 11y ago
eveningcoffee 11y ago
Not only is the surveillance problem, but when all the peoples money is in the banks, banks have more control to charge people for "handling" their money, so not just negative interest rates are the problem. Also when all the money is in the banks, governments have much more freedom to apply higher tax levels or just take the money.
yAnonymous 11y ago
The push for a cashless society and negative interest rates doesn't paint a good picture about the future of our financial system. It's nearing its well deserved end. The bubble is about to burst and they're trying to release pressure to make it last a bit longer.
- narrator 11y ago
  The funny thing about negative interest rates is it is one of the few good reasons to buy physical gold, especially with the elimination of large denomination euro notes.
  - iolothebard 11y ago
    Gold is just another fiat currency, plus at a high value it's even more worthless as a currency since you'd need such minuscule amounts to trade for goods/services.
    - narrator 11y ago
      "Gold is just another fiat currency". Did you come up with that or did you read it somewhere? If you read it somewhere, I'd love to read that article.
      - iolothebard 11y ago
        All you have to do is think about it's actual uses. I have degrees in finance and economics. All gold is IMO is a hedge against inflation by tying your monetary policy to the rate at which you can dig some shit out of the ground. Not remotely sane IMO. It would be like basing the value of the dollar on corn. At least corn would have some real value though (fuel, food, etc.).
    - imtringued 11y ago
      Silver is pretty cheap at about $0.50 per gram and the best part? It looks cooler to have a bag full with silver coins than a few gold coins!
mikegioia 11y ago
I've been "cash only" for 8 months now and I love it. Of course I need a credit card if I buy something on Amazon or a one-off web store, but the point is to move as many transactions offline as possible. There are so many privacy benefits to using cash, but one that really resonates with me is the physical nature of it. When you pay for something with cash, you can feel the transaction of money exchanging hands and it can have a psychological effect to prevent frivolous spending. Or at the very least, further reinforce that YES we are spending money! Also, store clerks, cab drivers, any anyone who accepts tips always love getting cash.
- scholia 11y ago
  On the plus side, using a card gives you a good list so you can see what you've spent. This makes accounting simpler than using a cash book and accumulating receipts. On the minus side, I use contactless ("wave to pay") all the time now, and find I rarely look to see how much I'm spending on small transactions. Even with larger transactions, it doesn't feel like "real money".
  - realusername 11y ago
    I think it's the opposite for me, using cash makes it way easier to get an idea of how much I spend. I use the ATM three times per month with 100 pounds each so 300 pound/month in normal expenses. With card I would need to to an addition of everything per month.
    - Ntrails 11y ago
      My credit card bill this month is £500, That seems easier than "i had n trips to the ATM plus I think I had £30 in my wallet from last month and I got £25 from donna for the booze we bought in France over the summer"? Not only that, I can download a monthly spreadsheet of all my transactions, pivot them into a simple table and so on and so forth. Data out the wazoo. £105 a month on tube fares. £235 a month on lunch. £17 on fuel. Knowing where I spent it is as useful if not more so than how much I spent in total. Then of course there is the free money I get from spending on a card. It all seems like a no brainer. And I never need to go to an ATM. And most the time I just lean my wallet against a card reader and mosey onwards. I'm not sold.
ams6110 11y ago
Is there really a UK food chain called "Tossed"? Isn't that slang for masturbation?
fennecfoxen 11y ago
> We already live in a world that is, as far as the > distribution of wealth is concerned, about as unequal > as it gets. It may even be as unequal as it’s ever been. Sure, if by "a world" you mean "a hyper-prosperous nation like the US or the UK"... and if by "unequal as it's ever been" you mean that third-world countries are taking our jobs and becoming much more prosperous, hitting our middle income brackets - the global 2% - harder than anyone else. If you really mean globally, then inequality is in fact falling. But sure, yes, the "cashless" ideas going around today are just a way for the government to enforce surveillance and steal away citizens' money with negative interest rates.
- nmrm2 11y ago
  > If you really mean globally, then inequality is in fact falling. No. Inequality is decreasing between nations as the developing world catches up with the west. But inequality within nations -- even developing nations -- is increasing. It's possible for inequality to increase as the the developing world catches up to the west; in fact, that's exactly what's happening. So the old geographical distributions are very slowly eroding, but they are being replaced by obscene levels of inequality within individual borders. This trend is exacerbated -- especially in Europe -- by tax evasion and avoidance managed (and practiced) by large fintech companies. So the author's fear that concentrating power in the hands of a few large fintech firms would exacerbate global inequality -- and lessen nation states' ability to combat inequality with policy -- is well-founded in global trends. edit: Instead of downvoting, go read François Bourguignon's "Inequality and Globalization: How the Rich Get Richer as the Poor Catch Up", which states exactly the thesis outlined above and contains pointers to the data sets used to arrive at these conclusions.
  - blowski 11y ago
    Exactly. On a global scale, the very poor are getting richer, but so are the very rich, while the middle-classes are getting (relatively) poorer. If you are middle-income (somewhere between $10K and $1M), then the probability that your children will be relatively better off than you is falling. See https://publications.credit-suisse.com/tasks/render/file/?fileID=BCDB1364-A105-0560-1332EC9100FF5C83 https://publications.credit-suisse.com/tasks/render/file/?fi... - p35 is particularly relevant in this conversation.
staticelf 11y ago
The best tip ever for saving to only spend cash. When you have the physical money leaving your hands it feels like a lot more than inserting a card and pressing a pin code. I am mostly using cash if I have the possibility to, which is kind of annoying sometimes since in Sweden (where I live) there are many "cashless" shops. Even in normal grocery stores checkouts it's like 50/50. I've never visited a country that has as strong opposition to cash as in Sweden. One time I walked into a boutique trying to purchase a cellphone and the salesmen there were happy to help. Unfortunately they told me that they didn't accept cash and then I just said "then there's no deal". The look on their faces was kind of fun, even if it sucked that I had to redo the whole process.
- ersii 11y ago
  Just wanted to tell you that you're not alone in Sweden with using and liking to use cash. There's at least one more - Hi! I haven't encountered a single grocery store that refuses cash and only accepts electronic/card payments yet. Was this a chain supermarket?
  - kungtotte 11y ago
    Many stores run a 50/50 setup these days, if they're large enough. That is, half the registers are card only, the other half accept both. I've seen it in Willys, Coop, and ICA.
  - staticelf 11y ago
    Not the grocery store, but many smaller shops sometimes only accept ccs.
- sosuke 11y ago
  I did the envelope savings plan. Single cash amount for the month, when the envelope was empty that was it!
PythonicAlpha 11y ago
I'd love to have only electronic money. It would have so many advantages. BUT: The risks of it and the potential for misuse are so many, that all advantages of electronic money are not worth to go in this direction. We are in a situation today, where privacy is one of the greatest assets we have and should preserve. When we loose it, we very likely loose our freedom and essential democracy. Instead we might get a "democracy" that is controlled by opinion-formers and big corporations that make money with our privacy.
Olscore 11y ago
A good conversation of "why we should fear a cashless world" should at least mention the Book of Revelation and the Book of Daniel in The Bible. It would be negligent to omit them from discussion like this.
- blowski 11y ago
  I assume that you're referring to Revelation 13:17: > And [the Beast] causes all, the small and the great, and the rich and the poor, and the free men and the slaves, to be given a mark on their right hand or on their forehead, and he provides that no one will be able to buy or to sell, except the one who has the mark, either the name of the beast or the number of his name. Like most of Revelations, I think this needs to be interpreted in the context that it was written. Jews during the time of Nero saw Nero as the "the Beast". From what I understand, these "marks on the hand" were a plan by the Romans to control Jewish citizens in much the same way that modern governments try to control slum populations. I doubt the author foresaw contactless credit cards and Apple pay, though I admit that the authors of both the article and of Revelations were worried about similar consequences.
  - theandrewbailey 11y ago
    > to be given a mark on their right hand or on their forehead, and he provides that no one will be able to buy or to sell, except the one who has the mark How else would you describe 21st century RFID using 1st century vocabulary? Revelation was written 2,000 years ago, and is supposed to be about things in its future, after all.
    - blowski 11y ago
      > How else would you describe 21st century RFID using 1st century vocabulary? Why did it need to use 1st Century vocabulary? I am a practising Christian, and in my heart, I suspect Jesus would say something like "don't worry about how you pay for physical stuff".
      - 11y ago
nibs 11y ago
Proposal: remove cash, add constitutional amendment defending the right to transact.
- kardos 11y ago
  Any proposal on how to ensure that it doesn't end up like the right to a speedy trial [1,2]? [1] http://fusion.net/story/5419/right-to-a-speedy-trial-this-innocent-teenager-waited-3-years-in-jail/ http://fusion.net/story/5419/right-to-a-speedy-trial-this-in... [2] http://www.theatlantic.com/national/archive/2013/04/do-louisianans-have-the-right-to-a-speedy-trial/275385/ http://www.theatlantic.com/national/archive/2013/04/do-louis...
known 11y ago
Cash is the only way Govt can implicitly (https://en.wikipedia.org/wiki/Petrocurrency)/explicitly https://en.wikipedia.org/wiki/Petrocurrency)/explicitly (https://en.wikipedia.org/wiki/Zimbabwean_dollar https://en.wikipedia.org/wiki/Zimbabwean_dollar) control 99% population;
Silhouette 11y ago
I think this is a symptom of a wider malaise in our societies today. Technology can be an enabler of wonderful new things, but it also affords new opportunities for power and profit to those who control it. The average person is not a financial expert and so there are very lucrative opportunities for those who know the system well to make a lot of money at the expense of those who do not. Payday loan companies and high interest credit cards come to mind as extreme examples, but every time you put money in a savings account at your bank they are making a lot more on it than they are paying you in interest, and every time you use an on-line payment service or swipe your card in a store you're giving a significant cut to the payment services involved, not the person you thought you were paying. This is before we even get into the privacy implications and so on. The average person is also not a technical expert and so there are analogous opportunities to take advantage of them, but we are becoming so dependent on technology that if anything the opportunities here are even more one-sided and certainly much greater in number. Day-to-day functionality and communications increasingly rely on isolated, closed ecosystems, run by commercial operators that have every incentive to lock people in and then exploit them, yet which are typically not subject to regulation as essential public services the way that traditional phone and mail systems typically have been. The "war on general purpose computing" is well underway, again with even basic things like the software you can run on your own devices locked up through a combination of proprietary repositories or app stores, cloud integrations, DRM and similar technologies, and legalised anticompetitive behaviour thanks to ever-increasing distortions of IP laws. Much of this comes down to the same recurring themes with new technologies: as well as providing useful new capabilities, they can also become a threat to privacy, to ownership, and ultimately to the freedom of smaller businesses or private individuals to create and use technologies and data as they wish rather than as the controlling mega-businesses and governments dictate. This does not seem healthy to me at all. However, since most of it is predicated on the average user of these technologies not understanding the full implications and often not having any meaningful choice apart from giving up on a technology altogether anyway, there is only so much the little guy can do. We should fear a cashless world, but we should fear more the kind of world that cashless transactions exemplify.
0xCMP 11y ago
I love being cashless honestly, but I see the benefits of using cash for transactions. My problem is that I usually do things online and plus I'm always feel much more secure knowing my Amex would be fully protected vs cash. Day to day I'm not worried I'll get robbed, but in the off chance I'm somewhere where I might I'm much happier carrying no cash and just my Amex.
- knodi123 11y ago
  > I'm always feel much more secure knowing my Amex would be fully protected vs cash Seems like the opposite should be true. Who cares about losing the amount of cash a normal person carries in their wallet to a mugger? If you get mugged often enough for it to have a real effect on your finances, then maybe you should move. Conversely, if the only thing in your wallet is some plastic that will probably be cancelled within half an hour of the mugger fleeing, then he has two separate motivations to kill you; 1. how dare you not give him easy cash for his quick junkie fix, 2. if you're dead, the card will go uncancelled for longer.
mapleoin 11y ago
I don't understand this argument that people feel safer storing cash than keeping it in a bank. The cash is just as ephemeral as bank credit. With the exception that it's controlled by your central bank instead of the commercial banks. Cash can be made useless centrally just as easily (if not easier because of its central nature) and there have been instances of this in the past in cash-only societies.[1] [1] https://en.wikipedia.org/wiki/Romanian_leu#Second_leu:_1947-1952 https://en.wikipedia.org/wiki/Romanian_leu#Second_leu:_1947-...
- JumpCrisscross 11y ago
  > Cash can be made useless centrally just as easily Most monetary economists would disagree. The zero bound on interest rates exists on cash, not bank deposits. From a central location, one can interrupt electronic funds transfers to and from certain persons or looking like this or that. You can't prohibit Iran from holding dollars in cash, though. To do so means threatening the systemic value of the currency. Cash forces an all-or-nothing constraint on the powers that be.
- flatline 11y ago
  By storing your cash in a bank, you are exposed to both the bank's insolvency and the devaluation of the currency by a central bank. By keeping it under your mattress, you are only exposed to the latter. Of course, by not storing your money in a bank, you are 100% responsible for securing it, which is the primary drawback that most people face. You are also more directly exposed to fluctuations in currency valuation since fiat is generally inflationary and the money is doing no work for you at home - but quite a few people still find it worth all the drawbacks to keep a chunk of cash at hand.
  - lagadu 11y ago
    > By storing your cash in a bank, you are exposed to both the bank's insolvency Only for very large amounts, at least in Europe, the central bank insures your money from its own reserves in case of bank failure up to a certain amount, AFAIK typically in the hundreds of thousands of €/local equivalent.
scrrr 11y ago
The whole cash less payment industry is in trouble, once people realise that they can withdraw more than 50 [USD|EUR|GBP|..] at once.. Just kidding. Well almost, since it was what did it for me. I started withdrawing larger amounts, 500 or 1000 Euros, each time, after ending up with no cash too often. And I didn't feel the need to use another payment method since. YMMV (obviously).
carlob 11y ago
Here in Italy the big issue is that many business will just not declare cash transactions. It's pretty common not to be given a receipt when buying a coffee and often when you visit a doctor they'll say: do you want the invoice or a discount? A couple of friends got married recently and I found out they paid over half of what the owed in cash to get pretty decent discount. So before we talk privacy and company let's remember that this kind of hidden economy has a huge cost for society and it's very widespread in southern Europe.
- agentgt 11y ago
  This is exactly what happened to Greece (my in-laws are Greek). Greeks and Greek Americans are completely cash based. Consequently the government has no idea how wealthy its residents are and tax evasion is extremely rampant. I'm sure that isn't the only reason to Greece's problems but I bet it did have a huge impact.
  - kamaal 11y ago
    >>I'm sure that isn't the only reason to Greece's problems but I bet it did have a huge impact. These sort of problems run quite deep and have unintended consequences. If money is not traceable, you also give way accountability. Opening up a door for corruption to happen easily, unchecked and unaccounted for. Rinse - Repeat for some time and you will see there are new problems due to corruption, which breed other new problems and so on..
- majewsky 11y ago
  So what is it then that makes this kind of fraud common in Southern Europe but practically nonexistent in Germany? (judging from my experience)
  - pjc50 11y ago
    It's that nebulous thing called "cultural factors". There are two stable equilibrium points in a society, one where most people play by the rules most of the time and one where most people ignore the rules most of the time. It's quite difficult to shift from the latter to the former; it seems to be historically associated with Protestantism, which itself could be seen as a movement to ""clean up"" religion from corruption.
Shivetya 11y ago
I think the primary reason is a loss of privacy and freedom. With a digital currency all your purchases can be tracked. You also lose freedom in that government at any level could suddenly make some products or service illegal, throw in that they could retroactively do so. Of course there is monetary policy too. Negative interest rates try to force spending to correct bad government policies which usually are the cause of depressed spending. Then combine this with the idea that printing digital currency is as simply as flicking a switch which would rapidly devalue currency in people's accounts. Simply put, its another attack on privacy and the freedom it entails
throwaway21816 11y ago
It is all about control. If you remove the independence of cash and you end up with government regulation deciding how much, what and where you spend your money. Such regulation can be used to put stress on businesses that the state deems 'unsuitable'[1] as well as punish those with differing opinions than the state[2]. Cashless society would essentially turn the world into one giant PayPal. 1 - https://en.wikipedia.org/wiki/Operation_Choke_Point https://en.wikipedia.org/wiki/Operation_Choke_Point 2 - https://en.wikipedia.org/wiki/IRS_targeting_controversy https://en.wikipedia.org/wiki/IRS_targeting_controversy
scott_s 11y ago
The concern for economic fairness is, I think, a real one. There is a disparity in most economies between the people who are banked, and those who are unbanked. Going "cashless" favors the banked, and that is a problem. I don't know how to address this. But, I disagree with one of the authors' other claims: "Cash has its uses for small transactions – a chocolate bar, a newspaper, a pint of milk – which, in the UK, are still uneconomic to process by other means. It will always be the fastest and most direct form of payment there is." This is not necessarily so. Think about another example: let's say I order something online, and the store gives me free shipping. Free! For sending me a physical item! How can they possibly come out ahead on that? Simple: because we have a sophisticated infrastructure for sending physical goods to many different places, and the marginal cost of one more item on all of those vehicles - and there are likely to be at least three or four, including several processing centers - is actually rather small. What if, instead, I want that item as soon as possible? Very expensive. Because my item is no longer a marginal-add to a sophisticated system. It is now closer to a one-off, and I have to pay for the service. So what does this have to do with cash? Everything. Cash is a physical item that must be stored, transferred from businesses to banks, then counted at banks, stored and redistributed. Doing this is expensive. There are many small businesses in NYC that do not accept cash, and I have assumed the reason is that completely eliminating this cost - handling, storing and transferring cash - is easier and cheaper for them. We have always considered handling cash just a part of running a business, but it is not necessarily so. In the future, handling cash may be more like overnight-express, rather than free-ground-shipping.
- Symbiote 11y ago
  The card companies in the UK try to encourage people to pay by contactless card (debit or credit) for low value items. That's perhaps no surprise. Transport for London, who run the public transport in London, are encouraging people to use contactless debit/credit cards rather than their own stored-value card system or cash. In Denmark I've had the man selling sausages from a wagon on the street ask me to pay by card. I guess he didn't want to bother going to the bank, or carry all the cash around.
mark_l_watson 11y ago
I recommend Douglas Rushkoff's book "life inc, How Corporatism Conquered the World and How We Can Take It Back": Centralized money has been the means for sucking profit out of local economies since about 1300. Rising income inequality has been an 800 year process. I thought I knew how the world worked, but Rushkoff changed my world view.
rspdelhi 11y ago
Transaction by bartering and then cash was a well thought process and is in practice even today. But at the beginning this was too just a naïve idea. Similarly Cashless transaction is being experimented and who knows it will be a standard of future overcoming the drawbacks of the with cash transactions. There is nothing to fear abut it.
pm24601 11y ago
With a cashless society, there are third party entities that decide: 1) if the payment will be honored ( legal pot growers / legal sex workers / donations to wikileaks have this problem 2) the payment will be possible ( is the bank systems functioning ) 3) how much of a cut the third-party will take from the transaction (visa, mastercard, but also app stories 30% cut) 4) who gets to know what was purchased (your bank shares information with the government) 5) who gets to know who made the purchase 6) who can access money: minors can't have bank accounts/etc, does someone have access to a banking system at all - lots of people can only cash checks through pay-day lenders
vtlynch 11y ago
I am not one to argue that technology solves the problems of the poor. But, there are lots of holes in this argument: 1. The unbanked already exist in a world that expects them to be banked. Almost all jobs in America are paid in checks or direct deposit. Checks are useless to people without bank accounts. They then have to spend time and money getting the check turned into cash at a check cashing place, like Amscot. So moving to electronic banking would actually HELP these people. If you really rely on cash, then you are at a disadvantage since most jobs dont pay in cash. Yes, there are real obstacles in the way of these people getting bank accounts. Education, time, documentation, etc. But everyday someone continues to remain unbanked, they are inconveniencing themselves in many ways. 2. Cash is already dead to a lot of people (in 1st world countries), so surveillance is already possible. Governments, banks, and payment processors ALREADY have access to this information for a large number of people. If this is a large concern, the author should be tackling the fact that this is on-going, not that it might happen in the future. But it does seem true that killing cash will open up new demographics to the same surveillance. 3. Bankruptcy is not a tool used by very poor people. Its often used by middle class and upper class people who deal with the finance world. I think this article has a very poor understanding of what "poor" means, even in a 1st world context. 4. This whole article is based off of bad solutions. Keeping cash around so that some people will be saved by withdrawing their money in the next financial crisis is NOT the solution to financial crises. Better regulation, management, and transparency is.
- sametmax 11y ago
  Except laws, regulations and transparancy are changing all the time. If cash remains, it gives you some margin to operate despite bad state, silly leadership, idiotic laws, wrong social decisions, etc. It's also a buffer for transitions, and help initiating things on the side that can grow eventually into something legit and good-for-society that would otherwise have not be possible because doing it right would have kill it. Thing is, since no system is perfect, and no system stays the same, you need to have a small, yet stable % of grey area to let the population compensate and adapt.
  - vtlynch 11y ago
arca_vorago 11y ago
It's nice to see the Guardian writing negatively about the cashless push, and they hit the main points. To me, the main danger of our time is totalitarian governments overreaching in reaction to changes in threat-actor models, and hence most of my primary concerns revolve around the particular issues that touch upon this point. There are two main issues I have with the push to the cashless society. 1. Lack of anonymity. Cash serves as a mostly anonymous medium of exchange, which encourages the free flow thereof. That being said though, one of the primary reasons you might want anonymity is from government overreach. For example, there is evidence that in the increasing surveillance panopticon, the gov wants to know what you are reading and purchasing for reading. If you use a cc to buy a book at a bookstore, that is easily tracked back to you and could in the future be used to put you on $list. While cash isn't perfectly anonymous, it ups the level of effort to find out (pulling cctv recording to correlate purchase to person). The lack of anonymity has been my primary disagreement with Max Keiser regarding bitcoin as well. To me, I can very easily see a currency upset on the horizon which is then used to push cashless on the society as a new currency model. 2. Revocation of access/control of assets. In a similar vein to police forces using confiscation as a budgetary padding tool, I can far too easily see the same being applied to cashless currencies. More than that though, is the ability to access the option at all in the first place. As an example for this, I give you the national bank blacklist database. For some people, suddenly being blacklisted by banks can create all kinds of problems, because much of our society relies on banking functions. I fear the same type of blacklist with little oversight could be applied to a cashless currency, to the point that, lets say you were a dissident, suddenly you lose all your money and can't open a new account. If everything is cashless, how do you buy bread? The article itself touches on the surface of these matters, but I think there needs to be a much deeper and deliberative discussion about the potential dangers, and benefits, of the push towards a cashless society.
dimitar 11y ago
"Cash means total financial inclusion" The author doesn't know what financial inclusion means. In fact financial inclusion has seen a boon thanks to cashless payments like m-pesa in Kenya. Thanks to not having to lug around cash and maintain expensive bank branches and offices, some of the poorest countries have made great strides in furthering financial inclusion. People want to eliminate €500, not €5. But even if they eliminated all cash I doubt there would be a catastrophe of the type the article claims; people will use different implementations of the same technologies to find privacy and convenience. In fact wives married to alcoholics in Africa often prefer to store their money in cashless wallets and saving groups, because it is easier to hide from their husbands who might find the cash under the mattress.
taivare 11y ago
I was living in a rural area where the poor used the underground economy ( flea markets etc. ) to supplement or offset low subsistence , meager wages and I know the poor in urban areas do as well. A cashless society will be a regressive tax on the poor !
galfarragem 11y ago
IMO the real issue on tax evasion is not that people don't like to pay taxes. People don't like is to be obligated to give money that will be spent in ways that they don't agree.
xixi77 11y ago
Many very good points there, and it's definitely nice to see this suggested from the left. Although: - "We already live in a world that is, as far as the distribution of wealth is concerned, about as unequal as it gets. It may even be as unequal as it’s ever been." -- I keep seeing this kind of statement all over. It seems really, really hard to believe, presuming that "ever" includes antique or even more recent feudal societies, but perhaps there is something to it -- perhaps it might be true under some measure of inequality?! - "Today more than 6 billion people have a mobile phone" -- similarly, I really don't see how this could be true, as it seems to imply something close to 100% market penetration worldwide for most age groups. I can see how there might be 6 billion mobile phones (or phone numbers?) active, but 6 billion distinct people?!
- bryondowd 11y ago
  6 billion out of a global population of 7.125 billion is just over 84%, so not that unbelievable, particularly considering how quickly a usable phone becomes worth approximately zero in the first world.
  - xixi77 11y ago
    Yeah, but (e.g. looking at http://www.census.gov/idb/worldpopinfo.html http://www.census.gov/idb/worldpopinfo.html in 2014) 6bn people means that literally everyone over age of 14 has a mobile phone (plus about 100 million of those under 14, too). Even accounting for all the phones first-world children have, it seems like quite a stretch.
    - imtringued 11y ago
      It's not that unreasonable. The iphone costs apple only slightly more than $200 to manufacture per unit and there are obviously even cheaper phones out there.
analog31 11y ago
In my view, long before the government realizes the full potential of abusing a cashless society, private businesses will have bled us dry -- especially the poor -- with transaction fees.
- abawany 11y ago
  This comment strikes hard for me given that I am also reading Sen. Elizabeth Warren's book A Fighting Chance. It is remarkable how much greed pervades these "stodgy old banks".
squozzer 11y ago
The article itself is somewhat misleading - cash, i.e. currency, does depend on the issuing institution's integrity and the willingness of people to accept it. Was a bit surprised to see The Guardian echo certain viewpoints heretofore only heard from preppers.
phlip9 11y ago
In theory, cryptocurrencies like Zcash [1] should solve the issues with transaction privacy. However, enforcing taxation when using a totally private and anonymous currency disconnected from government control would be nontrivial if not impossible. Likely the reason why governments are so against them. [1] Zcash: https://z.cash/ https://z.cash/
dangjc 11y ago
If stores weren't required by law to charge the same price to credit card users vs cash users, you would see most stores slap a 2-5% surcharge on credit card transactions, because that's how much they have to pay to Visa/Mastercard/Amex. Many people only use credit cards to get points, which is an unfair tax on customers who don't use credit cards. I find cash to just be easier to use, and I forego the rewards chasing. Once I pay with cash, I can throw away the receipt and not worry about the transaction ever again. No worry about identity theft. No need to check my statement every month and remember whether the transaction was me or not. Easier to split bills or pay people back. Knowing that more of my money is going to the shop keeper than a large financial corporation.
- mercutio2 11y ago
  It is no longer illegal to charge a surcharge for credit cards [0] in most, but not all US states. As far as I know, it has always been legal to give a cash discount. Until recently the sticker price had to be the credit card price, but all in all it appears merchants don't prefer cash despite the option of discounting it. [0] https://www.nerdwallet.com/blog/credit-cards/credit-card-charged-more-gas-station/ https://www.nerdwallet.com/blog/credit-cards/credit-card-cha...
retrogradeorbit 11y ago
The whole "but criminals use it" is a complete straw man. Yet you can see most people fall for it, over and over again. If we had a totally cashless society, you would see a level of white collar financial and banking crime that would make 2008 seem like a picnic. Anyone who is not convinced that the banking elite are the top criminals needs to watch this very recent documentary: https://www.youtube.com/watch?v=eHgbRYgpGGs https://www.youtube.com/watch?v=eHgbRYgpGGs
- txdv 11y ago
  We should criminalize the usage of water. Criminals use it after all! Even the banking elite!
  - retrogradeorbit 11y ago
    Just enforcing the rule of law would be enough.

292 points by mantesso 11y ago

Genuine question - What about a "cashless" currency based on blockchain? (a la bitcoin). Wouldn't it be and not be under any single entity's control at the same time?

PythonicAlpha 11y ago
In theory, yes. But currently, there exist enough structural problems, as much I know, that Bitcoin or similar schemes can not replace cash. Further, even with a total secure system, there will always be the pressure of the governments to control it.
imglorp 11y ago
One lesser point, bitcoin is pseudo-anonymous: you can always follow the money even if you can't identify all the people who handle it. It might be argued then that any entity who knows what you're spending and where has plenty of control over you. There are anonymous coins that don't have this property.
adrianN 11y ago
Cash and current forms of electronic payment have the nice feature that the seller gets their money almost immediately. As I understand it, bitcoin transactions take a while to confirm. I wouldn't want to stick around in the shop until some miner got around to my transaction.
- mirimir 11y ago
  Small payments using BitPay require one confirmation, and that typically only takes a minute or so. Their fee (1%, I think) covers reversal risk.
  - stan_rogers 11y ago
    Now imagine being lined up at the equivalent of a cash register with every single person in front of you taking "a minute or so" beyond what a transaction currently requires. Nobody's hiring additional cashiers (or whatever they'd call them) or self-checkout kiosk supervisors (to go along with the extra kiosks) if there isn't any extra money to be had.
    - gonvaled 11y ago
      You fire one cashier and install 100 self checkout machines. Problem solved!
      - stan_rogers 11y ago
        And replace those cashiers with people who have other job titles to manage inventory shrinkage. There's no getting around the fact that you need eyes near the doors to make sure that everything gets paid for, and you need enough eyes to monitor the traffic: more parallel traffic, more eyes needed. (Anecdotally, I see more staff at self-serve checkouts than at cash registers in stores that have both, yet the cashier lines move more quickly than the "more convenient" kiosks.) I'm sure there's an ideal world living in some people's minds, but it's not part of the external reality and probably never will be.
        gonvaled 11y ago
        I avoid self checkout - slow and inconvenient. But it's just a matter of improving the technology: we'll get there eventually.
        logfromblammo 11y ago
        I avoid self-checkout because the entire machine is usually set up around the assumption that I will try to walk out of the store without paying for one or more items, or by futzing the bar codes so that I pay $1 for a $30 beef roast. The self-checkout technology will never improve as long as that assumption remains. If you can't trust the customer to not steal a pack of gum, you can't trust the customer to not steal an entire beef tenderloin. The professional cashier does not need to keep every damned item on a giant scale after scanning it, because they are an agent of the store, and presumably trustworthy enough to notice and stop shoplifters and scammers. And they usually don't have to halt the entire checkout process and wait for a manager to come by and restart it whenever anything even mildly out of the ordinary happens, such as using a coupon. You can't improve the technology when the premises are wrong. And the premise is that you can turn a grocery store into a glorified vending machine.
- zanny 11y ago
  The "takes a while to confirm" is a shortcoming of politics in bitcoin today. Blocks are limited to 1MB, there are more than 1MB of transactions almost all the time now, so some transactions (the ones paying the lowest fees) get delayed multiple blocks and take forever to be confirmed. That will eventually be fixed, and once we are back to normalcy where transactions aren't limited by block size, you can regularly get - even on feeless transactions - multiple confirms in seconds. Your transaction won't be finalized until it enters the block, but once you have a half dozen or more confirms the probability of failure of that transaction entering is extremely low - well below 1% at that point, insofar as I have never seen it happen myself and don't know anybody who has had a multi-confirm transaction miss acceptance.
mtgx 11y ago
Not necessarily. What we're seeing with Ethereum, for instance, which seems to be the main blockchain technology that banks want to use right now, is that it was "customized" to fit the banks' needs to the point where the blockchain used by the banks doesn't even need to be public, the way Bitcoin is. It also doesn't need to work based on the "consensus" mechanism. And it could be further modified so that each transaction can also be wiretapped/blocked directly by the NSA, and so on. I don't necessarily blame Ethereum for this, although they did have a hand in following the banks' rules and essentially writing software for them, but this would've probably happened even without Ethereum agreeing to do it. Maybe the banks would've forked Ethereum's technology and then they could've done whatever to it, or they could've written their own tech from scratch.
unknown_apostle 11y ago
The biggest danger with blockchain is that if it ever fails, it would fail for technological reasons and its failure would be instant and complete. Like encryption being broken. Instead of government money, where the failure is telegraphed years in advance, e.g. by reckless abuse of the printing press.
- zanny 11y ago
  The equivalent of breaking encryption on bitcoin is perfectly forging paper money, or breaking the security on any financial institution that enables you to steal all their money. Also, if someone can break sha256, not only is bitcoin screwed, but so is the Internet as we know it and every secure institution period. The overnight "instant and complete" breakage of fundamental assumptions about security would destroy everything. So interestingly, if you could break sha256, you could probably break into almost any financial institution and steal their money as well. The security of a blockchain is in its popularity. As long as the code is open (and I'll admit, I am not a fan of how bitcoin mixes the default interface (BitcoinQt) and the default implementation (BitcoinCore) together so much) and there is investment in the market, there will be strong financial pressure to consistently and diligently analyze and track the source code for weaknesses. Bitcoin at 3B has at least a dozen security firms that have looked into its crypto. If you had another crypto that broke a trillion you would have thousands of companies constantly safeguarding and testing the crypto of the currency in the same way Google offers ludicrously high bounties for anyone who can break Android/Chrome/ium security.
flatline 11y ago
The blockchain is mostly a solution in search of a problem. Bitcoin is cool, but I doubt it will ever have large-scale applications beyond DNMs and hacker/hobbyists. - The current biggest problem that bitcoin faces is one of scale - and there's no clear solution in sight. Why on earth would you want every little transaction on the blockchain? If I buy a stick of gum, that doesn't need to be on public record for eternity. It is impractical and unwieldy. - Centralized systems are always more efficient than decentralized ones, and systems naturally tend toward centralization. Bitcoin falls down under centralization, which we are also currently witnessing with the hash power tied up by a few largely unknown Chinese operators. There are proposed solutions like pseudo-centralization with LN where bitcoin just becomes a settlement layer for off-chain contracts - and the details behind LN are still so primitive it is not clear it will actually solve any real problems. What you are talking about in practice for something at scale is a centralized blockchain of some sort, which is really just a distributed, immutable database, with some sort of trusted signing authority. What exact advantage does that give aside from potentially non-reversible transactions, which are a clear non-starter for most consumer purchases? There are already services that offer true non-reversibility for special cases where this is desired. There has so far been no viable application for blockchain technology as a replacement for cash except black/grey market purchases.

joefarish 11y ago

Cash, on the other hand, empowers its users. And convenient electronic payments doesn't in anyway empower users? Also, if people are unbanked and below the poverty line I would expect they would be more concerned with getting by than "Orwellian levels of surveillance."

eveningcoffee 11y ago
> And convenient electronic payments > doesn't in anyway empower users? Maybe you did not understand the article? It did not argue about convenience but about peoples control over their wealth. > Also, if people are unbanked and below the poverty > line I would expect they would be more concerned with > getting by than "Orwellian levels of surveillance." In many cases this is a big problem as it allows the Orwellian government to have larger control over people.
kagamine 11y ago
If people are below the poverty line then extra fees associated with transaction-handling, cost of technology for access etc are a big deal. Cash is closer to free to use. If you buy something used, a PC, fridge, whatever, because you can't afford new, do you want a transaction fee in addition? It may only be 1% or $1 (not accounting for the price of a smart phone and network costs) but that is still $1 more than you needed with cash.
- lotsofpulp 11y ago
  Cash is not free, there is a time cost to handling the cash, depositing it, there is a risk cost for vendors from employees stealing it, there is a risk cost from being robbed...there are always trade offs. A lot of these comments mention that cash gives the government less control, however try visiting India or China or Greece and ask people the real reason they use cash. It's to evade taxes and launder money! Same with cash tipping in the US. So in some ways electronic is better to help catch the cheaters, but if it's not transparent it could pose a problem if the wrong people get in charge.
  - 11y ago

eveningcoffee 11y ago

Not only is the surveillance problem, but when all the peoples money is in the banks, banks have more control to charge people for "handling" their money, so not just negative interest rates are the problem. Also when all the money is in the banks, governments have much more freedom to apply higher tax levels or just take the money.

yAnonymous 11y ago

The push for a cashless society and negative interest rates doesn't paint a good picture about the future of our financial system. It's nearing its well deserved end. The bubble is about to burst and they're trying to release pressure to make it last a bit longer.

narrator 11y ago
The funny thing about negative interest rates is it is one of the few good reasons to buy physical gold, especially with the elimination of large denomination euro notes.
- iolothebard 11y ago
  Gold is just another fiat currency, plus at a high value it's even more worthless as a currency since you'd need such minuscule amounts to trade for goods/services.
  - narrator 11y ago
    "Gold is just another fiat currency". Did you come up with that or did you read it somewhere? If you read it somewhere, I'd love to read that article.
    - iolothebard 11y ago
      All you have to do is think about it's actual uses. I have degrees in finance and economics. All gold is IMO is a hedge against inflation by tying your monetary policy to the rate at which you can dig some shit out of the ground. Not remotely sane IMO. It would be like basing the value of the dollar on corn. At least corn would have some real value though (fuel, food, etc.).
  - imtringued 11y ago
    Silver is pretty cheap at about $0.50 per gram and the best part? It looks cooler to have a bag full with silver coins than a few gold coins!

mikegioia 11y ago

I've been "cash only" for 8 months now and I love it. Of course I need a credit card if I buy something on Amazon or a one-off web store, but the point is to move as many transactions offline as possible. There are so many privacy benefits to using cash, but one that really resonates with me is the physical nature of it. When you pay for something with cash, you can feel the transaction of money exchanging hands and it can have a psychological effect to prevent frivolous spending. Or at the very least, further reinforce that YES we are spending money! Also, store clerks, cab drivers, any anyone who accepts tips always love getting cash.

scholia 11y ago
On the plus side, using a card gives you a good list so you can see what you've spent. This makes accounting simpler than using a cash book and accumulating receipts. On the minus side, I use contactless ("wave to pay") all the time now, and find I rarely look to see how much I'm spending on small transactions. Even with larger transactions, it doesn't feel like "real money".
- realusername 11y ago
  I think it's the opposite for me, using cash makes it way easier to get an idea of how much I spend. I use the ATM three times per month with 100 pounds each so 300 pound/month in normal expenses. With card I would need to to an addition of everything per month.
  - Ntrails 11y ago
    My credit card bill this month is £500, That seems easier than "i had n trips to the ATM plus I think I had £30 in my wallet from last month and I got £25 from donna for the booze we bought in France over the summer"? Not only that, I can download a monthly spreadsheet of all my transactions, pivot them into a simple table and so on and so forth. Data out the wazoo. £105 a month on tube fares. £235 a month on lunch. £17 on fuel. Knowing where I spent it is as useful if not more so than how much I spent in total. Then of course there is the free money I get from spending on a card. It all seems like a no brainer. And I never need to go to an ATM. And most the time I just lean my wallet against a card reader and mosey onwards. I'm not sold.

ams6110 11y ago

Is there really a UK food chain called "Tossed"? Isn't that slang for masturbation?

fennecfoxen 11y ago

> We already live in a world that is, as far as the > distribution of wealth is concerned, about as unequal > as it gets. It may even be as unequal as it’s ever been. Sure, if by "a world" you mean "a hyper-prosperous nation like the US or the UK"... and if by "unequal as it's ever been" you mean that third-world countries are taking our jobs and becoming much more prosperous, hitting our middle income brackets - the global 2% - harder than anyone else. If you really mean globally, then inequality is in fact falling. But sure, yes, the "cashless" ideas going around today are just a way for the government to enforce surveillance and steal away citizens' money with negative interest rates.

nmrm2 11y ago
> If you really mean globally, then inequality is in fact falling. No. Inequality is decreasing between nations as the developing world catches up with the west. But inequality within nations -- even developing nations -- is increasing. It's possible for inequality to increase as the the developing world catches up to the west; in fact, that's exactly what's happening. So the old geographical distributions are very slowly eroding, but they are being replaced by obscene levels of inequality within individual borders. This trend is exacerbated -- especially in Europe -- by tax evasion and avoidance managed (and practiced) by large fintech companies. So the author's fear that concentrating power in the hands of a few large fintech firms would exacerbate global inequality -- and lessen nation states' ability to combat inequality with policy -- is well-founded in global trends. edit: Instead of downvoting, go read François Bourguignon's "Inequality and Globalization: How the Rich Get Richer as the Poor Catch Up", which states exactly the thesis outlined above and contains pointers to the data sets used to arrive at these conclusions.
- blowski 11y ago
  Exactly. On a global scale, the very poor are getting richer, but so are the very rich, while the middle-classes are getting (relatively) poorer. If you are middle-income (somewhere between $10K and $1M), then the probability that your children will be relatively better off than you is falling. See https://publications.credit-suisse.com/tasks/render/file/?fileID=BCDB1364-A105-0560-1332EC9100FF5C83 https://publications.credit-suisse.com/tasks/render/file/?fi... - p35 is particularly relevant in this conversation.

staticelf 11y ago

The best tip ever for saving to only spend cash. When you have the physical money leaving your hands it feels like a lot more than inserting a card and pressing a pin code. I am mostly using cash if I have the possibility to, which is kind of annoying sometimes since in Sweden (where I live) there are many "cashless" shops. Even in normal grocery stores checkouts it's like 50/50. I've never visited a country that has as strong opposition to cash as in Sweden. One time I walked into a boutique trying to purchase a cellphone and the salesmen there were happy to help. Unfortunately they told me that they didn't accept cash and then I just said "then there's no deal". The look on their faces was kind of fun, even if it sucked that I had to redo the whole process.

ersii 11y ago
Just wanted to tell you that you're not alone in Sweden with using and liking to use cash. There's at least one more - Hi! I haven't encountered a single grocery store that refuses cash and only accepts electronic/card payments yet. Was this a chain supermarket?
- kungtotte 11y ago
  Many stores run a 50/50 setup these days, if they're large enough. That is, half the registers are card only, the other half accept both. I've seen it in Willys, Coop, and ICA.
- staticelf 11y ago
  Not the grocery store, but many smaller shops sometimes only accept ccs.
sosuke 11y ago
I did the envelope savings plan. Single cash amount for the month, when the envelope was empty that was it!

PythonicAlpha 11y ago

I'd love to have only electronic money. It would have so many advantages. BUT: The risks of it and the potential for misuse are so many, that all advantages of electronic money are not worth to go in this direction. We are in a situation today, where privacy is one of the greatest assets we have and should preserve. When we loose it, we very likely loose our freedom and essential democracy. Instead we might get a "democracy" that is controlled by opinion-formers and big corporations that make money with our privacy.

Olscore 11y ago

A good conversation of "why we should fear a cashless world" should at least mention the Book of Revelation and the Book of Daniel in The Bible. It would be negligent to omit them from discussion like this.

blowski 11y ago
I assume that you're referring to Revelation 13:17: > And [the Beast] causes all, the small and the great, and the rich and the poor, and the free men and the slaves, to be given a mark on their right hand or on their forehead, and he provides that no one will be able to buy or to sell, except the one who has the mark, either the name of the beast or the number of his name. Like most of Revelations, I think this needs to be interpreted in the context that it was written. Jews during the time of Nero saw Nero as the "the Beast". From what I understand, these "marks on the hand" were a plan by the Romans to control Jewish citizens in much the same way that modern governments try to control slum populations. I doubt the author foresaw contactless credit cards and Apple pay, though I admit that the authors of both the article and of Revelations were worried about similar consequences.
- theandrewbailey 11y ago
  > to be given a mark on their right hand or on their forehead, and he provides that no one will be able to buy or to sell, except the one who has the mark How else would you describe 21st century RFID using 1st century vocabulary? Revelation was written 2,000 years ago, and is supposed to be about things in its future, after all.
  - blowski 11y ago
    > How else would you describe 21st century RFID using 1st century vocabulary? Why did it need to use 1st Century vocabulary? I am a practising Christian, and in my heart, I suspect Jesus would say something like "don't worry about how you pay for physical stuff".
    - 11y ago

nibs 11y ago

Proposal: remove cash, add constitutional amendment defending the right to transact.

kardos 11y ago
Any proposal on how to ensure that it doesn't end up like the right to a speedy trial [1,2]? [1] http://fusion.net/story/5419/right-to-a-speedy-trial-this-innocent-teenager-waited-3-years-in-jail/ http://fusion.net/story/5419/right-to-a-speedy-trial-this-in... [2] http://www.theatlantic.com/national/archive/2013/04/do-louisianans-have-the-right-to-a-speedy-trial/275385/ http://www.theatlantic.com/national/archive/2013/04/do-louis...

known 11y ago

Cash is the only way Govt can implicitly (https://en.wikipedia.org/wiki/Petrocurrency)/explicitly https://en.wikipedia.org/wiki/Petrocurrency)/explicitly (https://en.wikipedia.org/wiki/Zimbabwean_dollar https://en.wikipedia.org/wiki/Zimbabwean_dollar) control 99% population;

Silhouette 11y ago

I think this is a symptom of a wider malaise in our societies today. Technology can be an enabler of wonderful new things, but it also affords new opportunities for power and profit to those who control it. The average person is not a financial expert and so there are very lucrative opportunities for those who know the system well to make a lot of money at the expense of those who do not. Payday loan companies and high interest credit cards come to mind as extreme examples, but every time you put money in a savings account at your bank they are making a lot more on it than they are paying you in interest, and every time you use an on-line payment service or swipe your card in a store you're giving a significant cut to the payment services involved, not the person you thought you were paying. This is before we even get into the privacy implications and so on. The average person is also not a technical expert and so there are analogous opportunities to take advantage of them, but we are becoming so dependent on technology that if anything the opportunities here are even more one-sided and certainly much greater in number. Day-to-day functionality and communications increasingly rely on isolated, closed ecosystems, run by commercial operators that have every incentive to lock people in and then exploit them, yet which are typically not subject to regulation as essential public services the way that traditional phone and mail systems typically have been. The "war on general purpose computing" is well underway, again with even basic things like the software you can run on your own devices locked up through a combination of proprietary repositories or app stores, cloud integrations, DRM and similar technologies, and legalised anticompetitive behaviour thanks to ever-increasing distortions of IP laws. Much of this comes down to the same recurring themes with new technologies: as well as providing useful new capabilities, they can also become a threat to privacy, to ownership, and ultimately to the freedom of smaller businesses or private individuals to create and use technologies and data as they wish rather than as the controlling mega-businesses and governments dictate. This does not seem healthy to me at all. However, since most of it is predicated on the average user of these technologies not understanding the full implications and often not having any meaningful choice apart from giving up on a technology altogether anyway, there is only so much the little guy can do. We should fear a cashless world, but we should fear more the kind of world that cashless transactions exemplify.

0xCMP 11y ago

I love being cashless honestly, but I see the benefits of using cash for transactions. My problem is that I usually do things online and plus I'm always feel much more secure knowing my Amex would be fully protected vs cash. Day to day I'm not worried I'll get robbed, but in the off chance I'm somewhere where I might I'm much happier carrying no cash and just my Amex.

knodi123 11y ago
> I'm always feel much more secure knowing my Amex would be fully protected vs cash Seems like the opposite should be true. Who cares about losing the amount of cash a normal person carries in their wallet to a mugger? If you get mugged often enough for it to have a real effect on your finances, then maybe you should move. Conversely, if the only thing in your wallet is some plastic that will probably be cancelled within half an hour of the mugger fleeing, then he has two separate motivations to kill you; 1. how dare you not give him easy cash for his quick junkie fix, 2. if you're dead, the card will go uncancelled for longer.

mapleoin 11y ago

I don't understand this argument that people feel safer storing cash than keeping it in a bank. The cash is just as ephemeral as bank credit. With the exception that it's controlled by your central bank instead of the commercial banks. Cash can be made useless centrally just as easily (if not easier because of its central nature) and there have been instances of this in the past in cash-only societies.[1] [1] https://en.wikipedia.org/wiki/Romanian_leu#Second_leu:_1947-1952 https://en.wikipedia.org/wiki/Romanian_leu#Second_leu:_1947-...

JumpCrisscross 11y ago
> Cash can be made useless centrally just as easily Most monetary economists would disagree. The zero bound on interest rates exists on cash, not bank deposits. From a central location, one can interrupt electronic funds transfers to and from certain persons or looking like this or that. You can't prohibit Iran from holding dollars in cash, though. To do so means threatening the systemic value of the currency. Cash forces an all-or-nothing constraint on the powers that be.
flatline 11y ago
By storing your cash in a bank, you are exposed to both the bank's insolvency and the devaluation of the currency by a central bank. By keeping it under your mattress, you are only exposed to the latter. Of course, by not storing your money in a bank, you are 100% responsible for securing it, which is the primary drawback that most people face. You are also more directly exposed to fluctuations in currency valuation since fiat is generally inflationary and the money is doing no work for you at home - but quite a few people still find it worth all the drawbacks to keep a chunk of cash at hand.
- lagadu 11y ago
  > By storing your cash in a bank, you are exposed to both the bank's insolvency Only for very large amounts, at least in Europe, the central bank insures your money from its own reserves in case of bank failure up to a certain amount, AFAIK typically in the hundreds of thousands of €/local equivalent.

scrrr 11y ago

The whole cash less payment industry is in trouble, once people realise that they can withdraw more than 50 [USD|EUR|GBP|..] at once.. Just kidding. Well almost, since it was what did it for me. I started withdrawing larger amounts, 500 or 1000 Euros, each time, after ending up with no cash too often. And I didn't feel the need to use another payment method since. YMMV (obviously).

carlob 11y ago

Here in Italy the big issue is that many business will just not declare cash transactions. It's pretty common not to be given a receipt when buying a coffee and often when you visit a doctor they'll say: do you want the invoice or a discount? A couple of friends got married recently and I found out they paid over half of what the owed in cash to get pretty decent discount. So before we talk privacy and company let's remember that this kind of hidden economy has a huge cost for society and it's very widespread in southern Europe.

agentgt 11y ago
This is exactly what happened to Greece (my in-laws are Greek). Greeks and Greek Americans are completely cash based. Consequently the government has no idea how wealthy its residents are and tax evasion is extremely rampant. I'm sure that isn't the only reason to Greece's problems but I bet it did have a huge impact.
- kamaal 11y ago
  >>I'm sure that isn't the only reason to Greece's problems but I bet it did have a huge impact. These sort of problems run quite deep and have unintended consequences. If money is not traceable, you also give way accountability. Opening up a door for corruption to happen easily, unchecked and unaccounted for. Rinse - Repeat for some time and you will see there are new problems due to corruption, which breed other new problems and so on..
majewsky 11y ago
So what is it then that makes this kind of fraud common in Southern Europe but practically nonexistent in Germany? (judging from my experience)
- pjc50 11y ago
  It's that nebulous thing called "cultural factors". There are two stable equilibrium points in a society, one where most people play by the rules most of the time and one where most people ignore the rules most of the time. It's quite difficult to shift from the latter to the former; it seems to be historically associated with Protestantism, which itself could be seen as a movement to ""clean up"" religion from corruption.

Shivetya 11y ago

I think the primary reason is a loss of privacy and freedom. With a digital currency all your purchases can be tracked. You also lose freedom in that government at any level could suddenly make some products or service illegal, throw in that they could retroactively do so. Of course there is monetary policy too. Negative interest rates try to force spending to correct bad government policies which usually are the cause of depressed spending. Then combine this with the idea that printing digital currency is as simply as flicking a switch which would rapidly devalue currency in people's accounts. Simply put, its another attack on privacy and the freedom it entails

throwaway21816 11y ago

It is all about control. If you remove the independence of cash and you end up with government regulation deciding how much, what and where you spend your money. Such regulation can be used to put stress on businesses that the state deems 'unsuitable'[1] as well as punish those with differing opinions than the state[2]. Cashless society would essentially turn the world into one giant PayPal. 1 - https://en.wikipedia.org/wiki/Operation_Choke_Point https://en.wikipedia.org/wiki/Operation_Choke_Point 2 - https://en.wikipedia.org/wiki/IRS_targeting_controversy https://en.wikipedia.org/wiki/IRS_targeting_controversy

scott_s 11y ago

The concern for economic fairness is, I think, a real one. There is a disparity in most economies between the people who are banked, and those who are unbanked. Going "cashless" favors the banked, and that is a problem. I don't know how to address this. But, I disagree with one of the authors' other claims: "Cash has its uses for small transactions – a chocolate bar, a newspaper, a pint of milk – which, in the UK, are still uneconomic to process by other means. It will always be the fastest and most direct form of payment there is." This is not necessarily so. Think about another example: let's say I order something online, and the store gives me free shipping. Free! For sending me a physical item! How can they possibly come out ahead on that? Simple: because we have a sophisticated infrastructure for sending physical goods to many different places, and the marginal cost of one more item on all of those vehicles - and there are likely to be at least three or four, including several processing centers - is actually rather small. What if, instead, I want that item as soon as possible? Very expensive. Because my item is no longer a marginal-add to a sophisticated system. It is now closer to a one-off, and I have to pay for the service. So what does this have to do with cash? Everything. Cash is a physical item that must be stored, transferred from businesses to banks, then counted at banks, stored and redistributed. Doing this is expensive. There are many small businesses in NYC that do not accept cash, and I have assumed the reason is that completely eliminating this cost - handling, storing and transferring cash - is easier and cheaper for them. We have always considered handling cash just a part of running a business, but it is not necessarily so. In the future, handling cash may be more like overnight-express, rather than free-ground-shipping.

Symbiote 11y ago
The card companies in the UK try to encourage people to pay by contactless card (debit or credit) for low value items. That's perhaps no surprise. Transport for London, who run the public transport in London, are encouraging people to use contactless debit/credit cards rather than their own stored-value card system or cash. In Denmark I've had the man selling sausages from a wagon on the street ask me to pay by card. I guess he didn't want to bother going to the bank, or carry all the cash around.

mark_l_watson 11y ago

I recommend Douglas Rushkoff's book "life inc, How Corporatism Conquered the World and How We Can Take It Back": Centralized money has been the means for sucking profit out of local economies since about 1300. Rising income inequality has been an 800 year process. I thought I knew how the world worked, but Rushkoff changed my world view.

rspdelhi 11y ago

Transaction by bartering and then cash was a well thought process and is in practice even today. But at the beginning this was too just a naïve idea. Similarly Cashless transaction is being experimented and who knows it will be a standard of future overcoming the drawbacks of the with cash transactions. There is nothing to fear abut it.

pm24601 11y ago

With a cashless society, there are third party entities that decide: 1) if the payment will be honored ( legal pot growers / legal sex workers / donations to wikileaks have this problem 2) the payment will be possible ( is the bank systems functioning ) 3) how much of a cut the third-party will take from the transaction (visa, mastercard, but also app stories 30% cut) 4) who gets to know what was purchased (your bank shares information with the government) 5) who gets to know who made the purchase 6) who can access money: minors can't have bank accounts/etc, does someone have access to a banking system at all - lots of people can only cash checks through pay-day lenders

vtlynch 11y ago

I am not one to argue that technology solves the problems of the poor. But, there are lots of holes in this argument: 1. The unbanked already exist in a world that expects them to be banked. Almost all jobs in America are paid in checks or direct deposit. Checks are useless to people without bank accounts. They then have to spend time and money getting the check turned into cash at a check cashing place, like Amscot. So moving to electronic banking would actually HELP these people. If you really rely on cash, then you are at a disadvantage since most jobs dont pay in cash. Yes, there are real obstacles in the way of these people getting bank accounts. Education, time, documentation, etc. But everyday someone continues to remain unbanked, they are inconveniencing themselves in many ways. 2. Cash is already dead to a lot of people (in 1st world countries), so surveillance is already possible. Governments, banks, and payment processors ALREADY have access to this information for a large number of people. If this is a large concern, the author should be tackling the fact that this is on-going, not that it might happen in the future. But it does seem true that killing cash will open up new demographics to the same surveillance. 3. Bankruptcy is not a tool used by very poor people. Its often used by middle class and upper class people who deal with the finance world. I think this article has a very poor understanding of what "poor" means, even in a 1st world context. 4. This whole article is based off of bad solutions. Keeping cash around so that some people will be saved by withdrawing their money in the next financial crisis is NOT the solution to financial crises. Better regulation, management, and transparency is.

sametmax 11y ago
Except laws, regulations and transparancy are changing all the time. If cash remains, it gives you some margin to operate despite bad state, silly leadership, idiotic laws, wrong social decisions, etc. It's also a buffer for transitions, and help initiating things on the side that can grow eventually into something legit and good-for-society that would otherwise have not be possible because doing it right would have kill it. Thing is, since no system is perfect, and no system stays the same, you need to have a small, yet stable % of grey area to let the population compensate and adapt.
- vtlynch 11y ago

arca_vorago 11y ago

It's nice to see the Guardian writing negatively about the cashless push, and they hit the main points. To me, the main danger of our time is totalitarian governments overreaching in reaction to changes in threat-actor models, and hence most of my primary concerns revolve around the particular issues that touch upon this point. There are two main issues I have with the push to the cashless society. 1. Lack of anonymity. Cash serves as a mostly anonymous medium of exchange, which encourages the free flow thereof. That being said though, one of the primary reasons you might want anonymity is from government overreach. For example, there is evidence that in the increasing surveillance panopticon, the gov wants to know what you are reading and purchasing for reading. If you use a cc to buy a book at a bookstore, that is easily tracked back to you and could in the future be used to put you on $list. While cash isn't perfectly anonymous, it ups the level of effort to find out (pulling cctv recording to correlate purchase to person). The lack of anonymity has been my primary disagreement with Max Keiser regarding bitcoin as well. To me, I can very easily see a currency upset on the horizon which is then used to push cashless on the society as a new currency model. 2. Revocation of access/control of assets. In a similar vein to police forces using confiscation as a budgetary padding tool, I can far too easily see the same being applied to cashless currencies. More than that though, is the ability to access the option at all in the first place. As an example for this, I give you the national bank blacklist database. For some people, suddenly being blacklisted by banks can create all kinds of problems, because much of our society relies on banking functions. I fear the same type of blacklist with little oversight could be applied to a cashless currency, to the point that, lets say you were a dissident, suddenly you lose all your money and can't open a new account. If everything is cashless, how do you buy bread? The article itself touches on the surface of these matters, but I think there needs to be a much deeper and deliberative discussion about the potential dangers, and benefits, of the push towards a cashless society.

dimitar 11y ago

"Cash means total financial inclusion" The author doesn't know what financial inclusion means. In fact financial inclusion has seen a boon thanks to cashless payments like m-pesa in Kenya. Thanks to not having to lug around cash and maintain expensive bank branches and offices, some of the poorest countries have made great strides in furthering financial inclusion. People want to eliminate €500, not €5. But even if they eliminated all cash I doubt there would be a catastrophe of the type the article claims; people will use different implementations of the same technologies to find privacy and convenience. In fact wives married to alcoholics in Africa often prefer to store their money in cashless wallets and saving groups, because it is easier to hide from their husbands who might find the cash under the mattress.

taivare 11y ago

I was living in a rural area where the poor used the underground economy ( flea markets etc. ) to supplement or offset low subsistence , meager wages and I know the poor in urban areas do as well. A cashless society will be a regressive tax on the poor !

galfarragem 11y ago

IMO the real issue on tax evasion is not that people don't like to pay taxes. People don't like is to be obligated to give money that will be spent in ways that they don't agree.

xixi77 11y ago

Many very good points there, and it's definitely nice to see this suggested from the left. Although: - "We already live in a world that is, as far as the distribution of wealth is concerned, about as unequal as it gets. It may even be as unequal as it’s ever been." -- I keep seeing this kind of statement all over. It seems really, really hard to believe, presuming that "ever" includes antique or even more recent feudal societies, but perhaps there is something to it -- perhaps it might be true under some measure of inequality?! - "Today more than 6 billion people have a mobile phone" -- similarly, I really don't see how this could be true, as it seems to imply something close to 100% market penetration worldwide for most age groups. I can see how there might be 6 billion mobile phones (or phone numbers?) active, but 6 billion distinct people?!

bryondowd 11y ago
6 billion out of a global population of 7.125 billion is just over 84%, so not that unbelievable, particularly considering how quickly a usable phone becomes worth approximately zero in the first world.
- xixi77 11y ago
  Yeah, but (e.g. looking at http://www.census.gov/idb/worldpopinfo.html http://www.census.gov/idb/worldpopinfo.html in 2014) 6bn people means that literally everyone over age of 14 has a mobile phone (plus about 100 million of those under 14, too). Even accounting for all the phones first-world children have, it seems like quite a stretch.
  - imtringued 11y ago
    It's not that unreasonable. The iphone costs apple only slightly more than $200 to manufacture per unit and there are obviously even cheaper phones out there.

analog31 11y ago

In my view, long before the government realizes the full potential of abusing a cashless society, private businesses will have bled us dry -- especially the poor -- with transaction fees.

abawany 11y ago
This comment strikes hard for me given that I am also reading Sen. Elizabeth Warren's book A Fighting Chance. It is remarkable how much greed pervades these "stodgy old banks".

squozzer 11y ago

The article itself is somewhat misleading - cash, i.e. currency, does depend on the issuing institution's integrity and the willingness of people to accept it. Was a bit surprised to see The Guardian echo certain viewpoints heretofore only heard from preppers.

phlip9 11y ago

In theory, cryptocurrencies like Zcash [1] should solve the issues with transaction privacy. However, enforcing taxation when using a totally private and anonymous currency disconnected from government control would be nontrivial if not impossible. Likely the reason why governments are so against them. [1] Zcash: https://z.cash/ https://z.cash/

dangjc 11y ago

If stores weren't required by law to charge the same price to credit card users vs cash users, you would see most stores slap a 2-5% surcharge on credit card transactions, because that's how much they have to pay to Visa/Mastercard/Amex. Many people only use credit cards to get points, which is an unfair tax on customers who don't use credit cards. I find cash to just be easier to use, and I forego the rewards chasing. Once I pay with cash, I can throw away the receipt and not worry about the transaction ever again. No worry about identity theft. No need to check my statement every month and remember whether the transaction was me or not. Easier to split bills or pay people back. Knowing that more of my money is going to the shop keeper than a large financial corporation.

mercutio2 11y ago
It is no longer illegal to charge a surcharge for credit cards [0] in most, but not all US states. As far as I know, it has always been legal to give a cash discount. Until recently the sticker price had to be the credit card price, but all in all it appears merchants don't prefer cash despite the option of discounting it. [0] https://www.nerdwallet.com/blog/credit-cards/credit-card-charged-more-gas-station/ https://www.nerdwallet.com/blog/credit-cards/credit-card-cha...

retrogradeorbit 11y ago

The whole "but criminals use it" is a complete straw man. Yet you can see most people fall for it, over and over again. If we had a totally cashless society, you would see a level of white collar financial and banking crime that would make 2008 seem like a picnic. Anyone who is not convinced that the banking elite are the top criminals needs to watch this very recent documentary: https://www.youtube.com/watch?v=eHgbRYgpGGs https://www.youtube.com/watch?v=eHgbRYgpGGs

txdv 11y ago
We should criminalize the usage of water. Criminals use it after all! Even the banking elite!
- retrogradeorbit 11y ago
  Just enforcing the rule of law would be enough.