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The War on Cash

151 points by Gigamouse 10y ago

lisper 10y ago
I wish I could upvote this ten times. This is the clearest and best written exposition of what cash really is and why it matters that I have ever seen. Well worth taking the time to read the whole thing.
anexprogrammer 10y ago
I was expecting yet another puff piece on the advantages of some app-based alternative. A good exploration of some of the disadvantages of cashless society. Only thing they have missed is the indirection of cashless - the further you are from actual money, the more you're likely to spend, especially impulsively. Works for credit cards, game currencies, and undoubtedly for cashless apps.
- Someone 10y ago
  I agree with you, but in not sure I'm right in that. Chances are that, centuries ago, people used to say "further you are from actual gold, the more you're likely to spend, especially impulsively". So, people could/might become used to currencies that are even less physical. Also, before banks provided credit, people used to run up bar tabs not only at bars but also at their grocer. Maybe, the thing to fear is credit, not money being virtualized?
  - aleksei 10y ago
    It would seem that some studies have shown increased impulse buying to be tied to credit cards, eg. https://www.zawya.com/mena/en/story/GN_27032015_280306/ https://www.zawya.com/mena/en/story/GN_27032015_280306/
  - anexprogrammer 10y ago
    "Chances are that, centuries ago, people used to say "further you are from actual gold..." I've never considered that angle, and you may be right, but centuries ago 9 out of 10 or more spent to survive rather than consumerism. We may become used to them, but I'm not sure how comparable the two eras can ever be. I've also seen enough reports on the topic to see that paying via plastic (both debit and credit) leads to higher overall spending. There's countless gamasutra type articles explaining the income benefits of tiers of virtual currencies. Game monetisation seems to have been researched well enough that most freemium have ended up with a combination of soft and hard currrencies, with deliberately unusual prices, and a remarkably similar set of price points for a bucket of gems. They're not all ending up there as customers spend less.
300bps 10y ago
Currently down. Mirror: http://webcache.googleusercontent.com/search?site=&source=hp&ei=njm4V6TuJorKmwGIsJaoBQ&q=cache%3Ahttp%3A%2F%2Fthelongandshort.org%2Fsociety%2Fwar-on-cash&oq=cache%3Ahttp%3A%2F%2Fthelongandshort.org%2Fsociety%2Fwar-on-cash&gs_l=mobile-gws-hp.3...11998.19363.0.20202.8.8.0.4.4.0.113.755.4j4.8.0....0...1c.1j2.64.mobile-gws-hp..0.7.373.3..0j41j46j0i131k1j0i46k1j0i3k1.As2uiZpw-U8 http://webcache.googleusercontent.com/search?site=&source=hp...
sokoloff 10y ago
I've never heard a credible argument of how a fully cashless society could operate under conditions of natural (or man-made) disaster. The multi-day blackout in the Northeast US, flooding, tornado, earthquake recovery, targeted cyber attack, etc. The idea that because the electronic payment system is readily available on all of the "good days" doesn't mean it will be available at a time of strife. Cash works without electricity, without phones, and without network. That's a killer feature.
- bitlax 10y ago
  How much cash am I supposed to be keeping on hand in case there's a flood or tornado?
  - pjmorris 10y ago
    It depends. A couple hundred was sufficient for us when Hurricane Wilma knocked out power across most of South Florida in 2005, but we happened to be in a pocket that had power, were surrounded by family and friends with food and other resources, and didn't really have to go anywhere or do anything. YMMV, but be careful with the idea that you don't need any. The ATM's and card swipes work until they don't.
  - larsiusprime 10y ago
    1 month of expenses is not a bad idea
- quantumhobbit 10y ago
  I distinctly remember stores having to use the old-fashioned "knuckle-scraper" credit card machines after hurricane Katrina in Baton Rouge because phone lines were down. It basically took an impression of the card from the raised letters of the card. Not many places had one of these and some just had to close because it didn't take long for all their customers to run out of cash without atms. Nowadays my credit card doesn't even have the raised bumps anymore. The knuckle-scrapers were a wide open vector for fraud but did at least work in a natural disaster.
- legulere 10y ago
raverbashing 10y ago
I am 100% more concerned about the negative interest rates motive than the dependence on financial institutions for payment (which is also worrying) Having said that, yes, cash sucks. Small coins suck even more and I rejoiced when countries started rounding prices to 5c on cash payments
- throwaway1974 10y ago
  Here is a tip, anytime you a filling up on petrol check your pockets first if you find some coins as you are bound to have some, then add them up For example last time if filled up I had a 10euro note in wallet and had about €5.60 in coin change so I just filled up petrol for €15.60 since its not hard to fill up down to a cent amount Most small shops love coins as added bonus
  - douche 10y ago
    This works much better in Europe or Canada than in the US... US pocket change is effectively worthless, since the largest denomination coin in wide circulation is the quarter. Unless you are carrying around (physical) pounds of change, using it for anything beyond laundry, vending machines, or parking meters is impractical. 1 & 2 euro coins, on the other hand, are pretty convenient for small purchases.
    - ghaff 10y ago
      Though that's also somewhat of a feature with respect to US change. I can just dump it in a bucket at home to get turned into "real money" with a coin counting machine someday. Quarters are also sometimes still useful for parking.
  - raverbashing 10y ago
    I do that with self-checkout machines. But I have to make an effort in not putting too much and end up getting a broken value as well
johnnyhillbilly 10y ago
Cash is public, banks are private. Half of the problem with cash could be solved by ending the war on drugs. The war on drugs has created a class of people whose main economic function is to transfer wealth from the public to the worst people in society. This is a many-headed monster that robs/burglarizes/steals money from average people, and vacuums it into a global system of money laundering. The cost is mostly absorbed through higher insurance premiums and more costly welfare schemes. The physical needs of this class of people are often carried by family and charity. No cash could kill this, but so could treating drugs like simple agricultural and/or chemical products and regulate the distribution. All costs of the war on drugs are covered by the public. All profit by heavy criminals. Sort this first, and then get back to cash and its utility in evading taxes.
- branchless 10y ago
  This is mixing up "cash". Cash is produced by your country's mint (a public body), and comprises around 3-5% of available on-demand "money". Private banks produce electronic debt which is fungible with "cash". This is available "on demand" as cash but only if you wish to withdraw less than the 5% which has a physical representation. The rest is available on demand to transfer as electronic banker-debt/credit into another part of the banking system. The vast majority of the private bank debt is issued via lending against land. I don't take issue with the use of cash in the drug trade, I'm unconvinced removing cash would see this fixed, most likely barter would take place instead. I just wished to take issue with the fast and loose "cash is public".
  - johnnyhillbilly 10y ago
    How currency comes into existence is a different topic. I agree wholeheartedly that bartering is the logical continuation of the drug economy in a cash free world. Maybe some pseudo currencies would also arise, creating black market banks. Money is power. We, the public, ought to stop propping up cartels and giving power to drug lords. My suggestion is to try that first, and then see what problems remain with cash.
    - 10y ago
StanislavPetrov 10y ago
Banning cash is such a monumentally bad idea its a miracle of modern propaganda that a single person is willing to even consider it. From negative interest rates to ubiquitous tracking of your every move and purchase (by stores, banks, governments, and whoever else they choose to share the information with), to the total paralysis society would face from any sort of blackout or network disruption, to limitless technical vulnerability by hackers, eliminating cash is truly one of the worst ideas ever conceived. Its bad enough that the government enforces a legal monopoly on currency. Extending that monopoly to digital-only currency is a huge step in the wrong direction for business, commerce, and freedom.
- ffggvv 10y ago
  Isn't tracking a good thing? This way the government can fight tax-evasion and the black market...
  - jcbrand 10y ago
    Depends on who is doing the tracking and for what purpose. I prefer societies that expect people to do the right thing and have measures in place to deal with anti-socials than societies that expect people to do the wrong thing and therefore try to control everybody for it.
    - geggam 10y ago
      I didn't realize people like you actually existed. I always assumed everyone understood how a tyranny of majority was created.
      - rplst8 10y ago
        The tyranny of the majority assumes that issues are always us vs. them, i.e. two choices. Often there are more than that and then no changes by government can be made. The two party system often masks this possibility.
    - ffggvv 10y ago
Symbiote 10y ago
The cashless society is hugely convenient though. Wouldn't it be better to accept that it's inevitable, and solve the privacy issues? For the year 2016, and excluding rent, 3.1% of my expenditure has been cash. I've used an ATM five times. [More-or-less; foreign spending isn't on this statement. In Germany I use more cash, in Norway I didn't use cash at all.]
- bo1024 10y ago
  Solving the privacy issue would be great, of course, but much more challenging than your one line would indicate (while keeping up with other benefits of cash, e.g. it doesn't disappear when I run out of battery, ...). Meanwhile, a private company now knows an incredible amount about you and is potentially willing to sell that information to advertisers, give it to the US government, or get hacked and give it to everyone.
- 190181931 10y ago
  The convenience argument is complete nonsense. Personally I hate dealing with physical things like writing a letter, buy an envelope (well, buy 20 when I need one) and a stamp and mail it, but cash is really the single most easy physical thing to deal with that I know of.
  - nhaehnle 10y ago
    It depends on the cash. I suspect that a lot of the cash-hate is supported by experiences in countries with badly designed cash. Compare e.g. the US$ and the Euro - the latter one is well designed, the former isn't. Other cultural factors come into play, again the US comes to mind as negative example due to the way prices are usually displayed without sales tax, which makes it hard to have the correct change in hand quickly.
    - k__ 10y ago
      What makes the Dollar worse than the Euro?
newscracker 10y ago
> We are fighting a broader battle to maintain alternatives to the growing digital panopticon that is emerging all around us. This is just one of the aspects that support stronger governments and corporates that put the interests of themselves and a tiny section of the population (those who help these get even stronger) above everything else. While some people discuss about this or mass surveillance or tracking, most of the populace isn't even aware how liberties are being lost and how "the power of the people" is becoming more of a carefully constructed mirage. Things seem to be moving in the direction of a dystopian society where appearances mask reality and common people are kept complacent with entertainment and other things to keep them occupied. I don't see a cashless world happening in the next few decades, because it will take a lot of work to get people out of poverty first while some entities focus on removing cash. Even if it were to happen, a cashless society would still have many different pseudo-currencies and barter systems (like those that exist in different contexts and systems today). What's worrying though is that in the future many goods and services may become inaccessible (if one wants to avoid electronic transactions) unless one resorts to the black/gray/underground markets.
- mikro2nd 10y ago
  Am I the only one who found it sadly ironic to read this on a site that pops up the warning, "We use cookies to help us improve this site and your experience. Continue to use the site if you’re happy with this or click to find out more"?
  - meanduck 10y ago
    Except hn cannot imprison or tax you. The problem is not tracking but give more power to something overly-powerful. Same thing applies to corporations.
- cryoshon 10y ago
  here are the alternatives to the new status quo of totalitarian democracy: 1. leave 2. revolt seriously, that's it. we lost the first dozen encounters with totalitarianism, so now options are limited and undesirable. widespread witholding of labor/ consent to be governed is the next step if we are serious about change. politically, we're on the downward slope for at least another 8 years...
Synaesthesia 10y ago
This is why Bitcoin is such an exciting concept: digital cash which can function without any central authority.
- golergka 10y ago
  Unless a couple of huge mining companies can actually control the network consensus.
  - ratacat 10y ago
    Bitcoin can be used anonymously with a little understanding. The ledger is immutable and permanent, however a party is only identified by their public key, and the chain of transactions that carried money to that key. If you can't associate that key with an actual person, we consider that pseudo-anonymity.
- emodendroket 10y ago
  I don't really get the "anonymity" claims of Bitcoin when there is a central, permanent ledger of every transaction ever made in it.
  - Synaesthesia 10y ago
    It's not anonymous. It's pseudonymous, there is a ledger of transactions but you have to still link an address with a person's ID.
tomohawk 10y ago
Once an intermediary feels secure in their position, the temptation to use the position to further other goals becomes pretty irresistable. Consider Square: http://dailysignal.com/2014/09/25/gun-shop-owners-longer-hip-square/ http://dailysignal.com/2014/09/25/gun-shop-owners-longer-hip... They are actively seeking to erode 2nd amendment rights. What other do-gooder impulses will Square pursue? Perhaps they'll next infringe on our 1st amendment rights by prohibiting payments to organizations they disagree with. We see the same thing with speech brokers such as Facebook. Want to exercise your 1st amendment rights? Not on our platform!
- forloop 10y ago
  1) Here's an example from Quora which I just came across (from Michael O. Church): '“Why are you banned on Quora?” Quora has received funding from, and is at this point largely controlled by, Y Combinator. “An investor” (probably from Y Combinator, but this has not been confirmed) threatened Quora’s management that, unless I was banned in a public way, they would be rendered unable to raise future funding. Vendetta-driven, intentional product failures are more common in Silicon Valley than most people would like to believe, and they come as often from a company’s investors as from its management. I was a top contributor to Quora. I had more than 8500 followers (and, now, over 9000) and was a Top Writer in each year. My answers were published to many of Quora’s media partners, including Time, Fortune, the BBC, and the Huffington Post. Because I was a model contributor, my ban caused a substantial loss of faith, among Quora’s community, in its moderation. User engagement, especially among users deemed to be high-value content creators, began to decline. In reaction to this, Quora asked me to rejoin its community in February 2016, and offered a cash settlement. I turned their offer down.'[0] 2) And of course there's the recent banning of the alt-right figure Milo Yiannopoulos on Twitter. We don't have free speech in the UK (people get arrested for trolling on social networks). It's not as ingrained in our culture. I think it's therefore important for the US to keep their free speech to at least set an example for the rest of the world (a benchmark). [0] https://michaelochurch.wordpress.com/2016/04/18/what-i-fought-for/ https://michaelochurch.wordpress.com/2016/04/18/what-i-fough...
  - cma 10y ago
aminok 10y ago
"There's huge interest in cryptocurrencies and what perhaps they can create in the market place. Now we at MasterCard are not completely comfortable with the idea of cryptocurrencies largely because they go against the whole principle that we've established our business on which is really moving to a world beyond cash and ensuring greater transparency.. If you think about it, cash is a problem for a number of countries. Cash really facilitates anonymity, it facilitates illegal activity, it facilitates tax avoidance and a range of other things that aren't going to drive efficiency in an economy" -https://youtu.be/bO4jHXjCXw8?t=2m57s https://youtu.be/bO4jHXjCXw8?t=2m57s "If it's an anonymous transaction, that sounds like a suspicious transaction. Why does somebody need to be anonymous?" -http://youtu.be/bO4jHXjCXw8#t=4m12s http://youtu.be/bO4jHXjCXw8#t=4m12s MasterCard SE Asia President on cryptocurrencies and cash
- tunap 10y ago
  Says the guy who stands to make ~3% of every single transaction that is deanonymized. For more clarification of how cashless would save us, look into BofA & Wells Fargo's not so distant past laundering of illegal guns & drug monies from Mexico, sure they paid fines & promise to be more diligent. Around the same time was the Wikileaks payments freeze across multi platforms(Guv mandated). Sounds fair & equitable for all who can afford justice.
  - aminok 10y ago
    The destruction of privacy also means that the minority has zero protection against the majority. If the majority imposes an oppressive law, like prohibiting financial transactions with people of a certain nationality, or requiring people to hand over 1/3rd of their income for programs that enrich the political establishment and their donors, there is no way to circumvent the law.
    - XorNot 10y ago
      This is not possible today. It is very easy as a government (often something bitcoin people rant about) to bulk transfer wealth from the population to a preferred group, since you have control of the mint. Which is why the mint (reserve bank) is, in all functional countries, a standalone entity with independent decision making power about currency creation. The idea that digitally tampering with bank accounts would not be noticed or reacted to, but softer measures like inflation rate meddling, or stealth measures like doing a currency re-issuance and controlling how hard it is for people to exchange old money, is absurd. Not to mention you've managed to ignore the fact that only a tiny fraction of circulating cash is physical cash anyway. In terms of protecting rights, this is one of the worst, least effective ways to do so.
jcbrand 10y ago
> He (Kenneth Rogoff) argues that, apart from facilitating crime and tax evasion, cash hampers central banks from setting negative interest rates. I think a lot of the "war on cash" boils down to this. Central Banks want to impose negative rates on us to try and get us out of the mess of having too much debt in the system. Cash makes this difficult.
- nhaehnle 10y ago
  Two points: First, the economic logic of negative rates is actually to try to incentivize the private sector to create more debt. This isn't completely absurd. Slow economic growth quite often boils down to a lack of spending. One way to get more spending is by having the private sector take on more debt. I think this is a bad idea, considering how the global financial crisis was caused by too much private debt in the first place. It would be better to increase public debt, at least in countries with monetarily sovereign governments, since there is no risk of default and the financial chaos that goes with it. Second point: I've been hearing voices against cash since before negative rates became a thing. So while they're certainly a factor, they're far from the only one.
- mindslight 10y ago
  > Central Banks want to impose negative rates on us to try and get us out of the mess of having too much debt in the system Of course, lower interest rates encourage more debt. So if they are honestly trying to do this, they're doomed to failure. (I model their activity as self-interestedly creating as much debt as possible to further erode the ability of plebs to save, siphoning all economic surplus to them back as rent)
- dragonwriter 10y ago
  Reduced, including negative, rates are a stimulus measure, designed to (in the short term) increase borrowing (and therefore overall economic activity), not decrease it. Generally, central bank monetary policy is driven by measures of economic activity, unemployment, and inflation.
josscrowcroft 10y ago
This might be a naive question, but has there ever been a successful non-profit bank-like financial institution? As I was reading this article I thought of iPredator.se, which provides a non-tracked VPN service. Their USP is "We don't track anything you do". I wonder whether there could ever be a cashless option that offers a similar service. This of course would only address the concerns of privacy and profit-driven interests, and not the other serious concerns raised in the article. Has there been/could there ever be a bank like that?
- cmrdporcupine 10y ago
  > This might be a naive question, but has there ever been a successful non-profit bank-like financial institution? Credit unions are not-for-profit institutions, member-owned, and are very successful. But they don't satisfy the second part of your post. Tracking and auditing transactions is kind of built into the idea of modern banking.
- halotrope 10y ago
  In Germany we have GLS bank which is for profit but has a strong ethics code about their investments and try to maintain high standards of transparency. https://www.gls.de/privatkunden/english-portrait/ https://www.gls.de/privatkunden/english-portrait/
emodendroket 10y ago
What stops banks from implementing a negative interest rate today? Practically nobody keeps a large amount of savings in cash. Such a policy would be really lousy in a society where retirement planning is largely a private affair, though.
- aianus 10y ago
  They basically already are (at least in Canada). If I keep $1999 in my account the bank charges me $5-$10 a month to hold onto it. I'd wager over a third of the country has less than $2000 in their checking accounts at some point during the month.
  - emodendroket 10y ago
    That's a fair point; the mechanism is different but in practice it's the same result.
- bahjoite 10y ago
  It could be that, faced with a -ve rate, account holders can simply withdraw everything from their account, thus no revenue is generated for the banks and no guarantee that account holders aren't hoarding their cash instead of spending it.
  - emodendroket 10y ago
    Yeah, but how many people with significant savings are going to do that?
323454 10y ago
I hereby resolve to use cash as often as I possibly can, to show in my own small way that "the market" still demands the cash option. The small inconvenience of carrying around a few bits of paper and metal is worth it to protect the rights of those outside the banking system.
- nicky0 10y ago
  Good on you.
- deleted 10y ago
  [deleted]
- mindslight 10y ago
  Inconvenience? I once got into a car accident on a friday afternoon. It was on a highway, so my car was towed by scumbags who insisted on bringing it all the way back to their facility rather than anywhere useful. Obviously they wanted to require me to come back later, store it all weekend, and rake in more ill-gotten gains. I demanded my car be released as soon as possible, to which they tried to dissuade me that it would be a lot of money, they didn't take credit cards, they were technically closed so if I went to an ATM they wouldn't be there when I got back, etc. I stood firm since none of this was a problem, bailed my car out, and successfully avoided being further gouged by their racket. If you don't see the utility in carrying cash you're basically asking to be taken advantage of, in both the immediate and long term.
branchless 10y ago
Tracking isn't the problem to prevent tax avoidance at the point where avoidance becomes immoral. UK last month: Grosvenor dies leaving 9bn GBP in land to his son. We have inheritance tax in the UK, the son should have received a bill of several billion which would fund our health service. They know where all the assets are, but the UK govt has a special loophole for rich people: trusts. The son inherits the full 9bn GBP. It's all tracked but the UK is totally corrupt. Given the above example how will the state act against the rich when all "money" is tracked because it's electronic? They won't touch them.
- nicky0 10y ago
  Who controls the trusts?
  - branchless 10y ago
    The land owners have full effective access to all funds just as if they owned them. The uk is a total sham.
- wtbob 10y ago
  > UK last month: Grosvenor dies leaving 9bn GBP in land to his son. We have inheritance tax in the UK, the son should have received a bill of several billion which would fund our health service. The Grosvenor family have spent the centuries since 1622 — when Sir Richard Grosvenor was created a baronet by King James I — slowly building up their family fortune. In 1761 Sir Richard Grosvenor, Bt, was created Baron Grosvenor; in 1784 he became Earl Grosvenor. In Robert Grosvenor, the second earl, was created Marquess of Westminster; in 1874 Hugh Grosvenor, the third marquess, was created Duke of Westminster. The family has distinguished itself by long and loyal service to the Crown and to the people of England. I fail to see why the new Duke should be forced to see the fortune his ancestors have spent centuries building be diminished so brutally.
branchless 10y ago
This article fails to touch on who issues the money. In particular in the example of the Rai stones it fails to ask what if the ledger keeper could magic up stones all over the island to capture labour by eroding the value of the current stones. Really for me this is one turtle down the stack and he needs to ask who creates credits and what that means. edit: and right on queue in my twitter feed an article on money creation as theft: http://www.bloomberg.com/news/articles/2016-08-17/meet-the-man-who-d-revolutionize-money-from-the-inside-out http://www.bloomberg.com/news/articles/2016-08-17/meet-the-m... edit2: and every single time I submit to a post on money on HN "you're submitting too fast please slow down"! What a surprise...
ape4 10y ago
I like cash too. I'd like to see a smart start up do for cash what Square did for credit card payment. A super simple way for a small store to manage it.
gerbilly 10y ago
I love being able to throw some cash at a taxi driver, or to use cash at a grocery store and just get out of there. As it is lineups at stores are really really slow since every single person has to fiddle with a card and a PIN to pay for their coke and chips.
- nicky0 10y ago
  This is temporary. Contactless payments will change that so that electronic payment becomes faster than cash for small transactions (as is already happening in many places).
  - gerbilly 10y ago
    Even if that is the case, then I don't like the privacy implications. I don't feel great about the Eye of Sauron seeing every single thing I do with my money.
transfire 10y ago
So what are you going to do when they freeze your bank account because you won't submit to a Zika vaccination? We are so fucking doomed.
abpavel 10y ago
"Much fintech 'disruption'..." revolves around eliminating slack and incompetence of the low grade employees. Once you've tried services of an average investment banker, and paid 1% entry fee,1% exit fee, and 1% annual maintenance fee, you'd see fintech needs in a different light.
clarkmoody 10y ago
More symptoms of Terminal-Stage Keynesianism.
upofadown 10y ago
Well if someone comes up with, and popularizes a system that can actually replace cash then we should consider it. I would be thrilled to use something like bitcoin or taler to pay for my groceries. In the mean time we are stuck with physical cash. Credit and debit systems are good for some stuff but are simply not technologically advanced enough to replace cash. In fact, actual electronic cash would to some extent make credit and debit obsolete, as well as causing a great many other changes.

151 points by Gigamouse 10y ago

I wish I could upvote this ten times. This is the clearest and best written exposition of what cash really is and why it matters that I have ever seen. Well worth taking the time to read the whole thing.

anexprogrammer 10y ago

I was expecting yet another puff piece on the advantages of some app-based alternative. A good exploration of some of the disadvantages of cashless society. Only thing they have missed is the indirection of cashless - the further you are from actual money, the more you're likely to spend, especially impulsively. Works for credit cards, game currencies, and undoubtedly for cashless apps.

Someone 10y ago
I agree with you, but in not sure I'm right in that. Chances are that, centuries ago, people used to say "further you are from actual gold, the more you're likely to spend, especially impulsively". So, people could/might become used to currencies that are even less physical. Also, before banks provided credit, people used to run up bar tabs not only at bars but also at their grocer. Maybe, the thing to fear is credit, not money being virtualized?
- aleksei 10y ago
  It would seem that some studies have shown increased impulse buying to be tied to credit cards, eg. https://www.zawya.com/mena/en/story/GN_27032015_280306/ https://www.zawya.com/mena/en/story/GN_27032015_280306/
- anexprogrammer 10y ago
  "Chances are that, centuries ago, people used to say "further you are from actual gold..." I've never considered that angle, and you may be right, but centuries ago 9 out of 10 or more spent to survive rather than consumerism. We may become used to them, but I'm not sure how comparable the two eras can ever be. I've also seen enough reports on the topic to see that paying via plastic (both debit and credit) leads to higher overall spending. There's countless gamasutra type articles explaining the income benefits of tiers of virtual currencies. Game monetisation seems to have been researched well enough that most freemium have ended up with a combination of soft and hard currrencies, with deliberately unusual prices, and a remarkably similar set of price points for a bucket of gems. They're not all ending up there as customers spend less.

300bps 10y ago

Currently down. Mirror: http://webcache.googleusercontent.com/search?site=&source=hp&ei=njm4V6TuJorKmwGIsJaoBQ&q=cache%3Ahttp%3A%2F%2Fthelongandshort.org%2Fsociety%2Fwar-on-cash&oq=cache%3Ahttp%3A%2F%2Fthelongandshort.org%2Fsociety%2Fwar-on-cash&gs_l=mobile-gws-hp.3...11998.19363.0.20202.8.8.0.4.4.0.113.755.4j4.8.0....0...1c.1j2.64.mobile-gws-hp..0.7.373.3..0j41j46j0i131k1j0i46k1j0i3k1.As2uiZpw-U8 http://webcache.googleusercontent.com/search?site=&source=hp...

sokoloff 10y ago

I've never heard a credible argument of how a fully cashless society could operate under conditions of natural (or man-made) disaster. The multi-day blackout in the Northeast US, flooding, tornado, earthquake recovery, targeted cyber attack, etc. The idea that because the electronic payment system is readily available on all of the "good days" doesn't mean it will be available at a time of strife. Cash works without electricity, without phones, and without network. That's a killer feature.

bitlax 10y ago
How much cash am I supposed to be keeping on hand in case there's a flood or tornado?
- pjmorris 10y ago
  It depends. A couple hundred was sufficient for us when Hurricane Wilma knocked out power across most of South Florida in 2005, but we happened to be in a pocket that had power, were surrounded by family and friends with food and other resources, and didn't really have to go anywhere or do anything. YMMV, but be careful with the idea that you don't need any. The ATM's and card swipes work until they don't.
- larsiusprime 10y ago
  1 month of expenses is not a bad idea
quantumhobbit 10y ago
I distinctly remember stores having to use the old-fashioned "knuckle-scraper" credit card machines after hurricane Katrina in Baton Rouge because phone lines were down. It basically took an impression of the card from the raised letters of the card. Not many places had one of these and some just had to close because it didn't take long for all their customers to run out of cash without atms. Nowadays my credit card doesn't even have the raised bumps anymore. The knuckle-scrapers were a wide open vector for fraud but did at least work in a natural disaster.
legulere 10y ago

raverbashing 10y ago

I am 100% more concerned about the negative interest rates motive than the dependence on financial institutions for payment (which is also worrying) Having said that, yes, cash sucks. Small coins suck even more and I rejoiced when countries started rounding prices to 5c on cash payments

throwaway1974 10y ago
Here is a tip, anytime you a filling up on petrol check your pockets first if you find some coins as you are bound to have some, then add them up For example last time if filled up I had a 10euro note in wallet and had about €5.60 in coin change so I just filled up petrol for €15.60 since its not hard to fill up down to a cent amount Most small shops love coins as added bonus
- douche 10y ago
  This works much better in Europe or Canada than in the US... US pocket change is effectively worthless, since the largest denomination coin in wide circulation is the quarter. Unless you are carrying around (physical) pounds of change, using it for anything beyond laundry, vending machines, or parking meters is impractical. 1 & 2 euro coins, on the other hand, are pretty convenient for small purchases.
  - ghaff 10y ago
    Though that's also somewhat of a feature with respect to US change. I can just dump it in a bucket at home to get turned into "real money" with a coin counting machine someday. Quarters are also sometimes still useful for parking.
- raverbashing 10y ago
  I do that with self-checkout machines. But I have to make an effort in not putting too much and end up getting a broken value as well

johnnyhillbilly 10y ago

Cash is public, banks are private. Half of the problem with cash could be solved by ending the war on drugs. The war on drugs has created a class of people whose main economic function is to transfer wealth from the public to the worst people in society. This is a many-headed monster that robs/burglarizes/steals money from average people, and vacuums it into a global system of money laundering. The cost is mostly absorbed through higher insurance premiums and more costly welfare schemes. The physical needs of this class of people are often carried by family and charity. No cash could kill this, but so could treating drugs like simple agricultural and/or chemical products and regulate the distribution. All costs of the war on drugs are covered by the public. All profit by heavy criminals. Sort this first, and then get back to cash and its utility in evading taxes.

branchless 10y ago
This is mixing up "cash". Cash is produced by your country's mint (a public body), and comprises around 3-5% of available on-demand "money". Private banks produce electronic debt which is fungible with "cash". This is available "on demand" as cash but only if you wish to withdraw less than the 5% which has a physical representation. The rest is available on demand to transfer as electronic banker-debt/credit into another part of the banking system. The vast majority of the private bank debt is issued via lending against land. I don't take issue with the use of cash in the drug trade, I'm unconvinced removing cash would see this fixed, most likely barter would take place instead. I just wished to take issue with the fast and loose "cash is public".
- johnnyhillbilly 10y ago
  How currency comes into existence is a different topic. I agree wholeheartedly that bartering is the logical continuation of the drug economy in a cash free world. Maybe some pseudo currencies would also arise, creating black market banks. Money is power. We, the public, ought to stop propping up cartels and giving power to drug lords. My suggestion is to try that first, and then see what problems remain with cash.
  - 10y ago

StanislavPetrov 10y ago

Banning cash is such a monumentally bad idea its a miracle of modern propaganda that a single person is willing to even consider it. From negative interest rates to ubiquitous tracking of your every move and purchase (by stores, banks, governments, and whoever else they choose to share the information with), to the total paralysis society would face from any sort of blackout or network disruption, to limitless technical vulnerability by hackers, eliminating cash is truly one of the worst ideas ever conceived. Its bad enough that the government enforces a legal monopoly on currency. Extending that monopoly to digital-only currency is a huge step in the wrong direction for business, commerce, and freedom.

ffggvv 10y ago
Isn't tracking a good thing? This way the government can fight tax-evasion and the black market...
- jcbrand 10y ago
  Depends on who is doing the tracking and for what purpose. I prefer societies that expect people to do the right thing and have measures in place to deal with anti-socials than societies that expect people to do the wrong thing and therefore try to control everybody for it.
  - geggam 10y ago
    I didn't realize people like you actually existed. I always assumed everyone understood how a tyranny of majority was created.
    - rplst8 10y ago
      The tyranny of the majority assumes that issues are always us vs. them, i.e. two choices. Often there are more than that and then no changes by government can be made. The two party system often masks this possibility.
  - ffggvv 10y ago

Symbiote 10y ago

The cashless society is hugely convenient though. Wouldn't it be better to accept that it's inevitable, and solve the privacy issues? For the year 2016, and excluding rent, 3.1% of my expenditure has been cash. I've used an ATM five times. [More-or-less; foreign spending isn't on this statement. In Germany I use more cash, in Norway I didn't use cash at all.]

bo1024 10y ago
Solving the privacy issue would be great, of course, but much more challenging than your one line would indicate (while keeping up with other benefits of cash, e.g. it doesn't disappear when I run out of battery, ...). Meanwhile, a private company now knows an incredible amount about you and is potentially willing to sell that information to advertisers, give it to the US government, or get hacked and give it to everyone.
190181931 10y ago
The convenience argument is complete nonsense. Personally I hate dealing with physical things like writing a letter, buy an envelope (well, buy 20 when I need one) and a stamp and mail it, but cash is really the single most easy physical thing to deal with that I know of.
- nhaehnle 10y ago
  It depends on the cash. I suspect that a lot of the cash-hate is supported by experiences in countries with badly designed cash. Compare e.g. the US$ and the Euro - the latter one is well designed, the former isn't. Other cultural factors come into play, again the US comes to mind as negative example due to the way prices are usually displayed without sales tax, which makes it hard to have the correct change in hand quickly.
  - k__ 10y ago
    What makes the Dollar worse than the Euro?

newscracker 10y ago

> We are fighting a broader battle to maintain alternatives to the growing digital panopticon that is emerging all around us. This is just one of the aspects that support stronger governments and corporates that put the interests of themselves and a tiny section of the population (those who help these get even stronger) above everything else. While some people discuss about this or mass surveillance or tracking, most of the populace isn't even aware how liberties are being lost and how "the power of the people" is becoming more of a carefully constructed mirage. Things seem to be moving in the direction of a dystopian society where appearances mask reality and common people are kept complacent with entertainment and other things to keep them occupied. I don't see a cashless world happening in the next few decades, because it will take a lot of work to get people out of poverty first while some entities focus on removing cash. Even if it were to happen, a cashless society would still have many different pseudo-currencies and barter systems (like those that exist in different contexts and systems today). What's worrying though is that in the future many goods and services may become inaccessible (if one wants to avoid electronic transactions) unless one resorts to the black/gray/underground markets.

mikro2nd 10y ago
Am I the only one who found it sadly ironic to read this on a site that pops up the warning, "We use cookies to help us improve this site and your experience. Continue to use the site if you’re happy with this or click to find out more"?
- meanduck 10y ago
  Except hn cannot imprison or tax you. The problem is not tracking but give more power to something overly-powerful. Same thing applies to corporations.
cryoshon 10y ago
here are the alternatives to the new status quo of totalitarian democracy: 1. leave 2. revolt seriously, that's it. we lost the first dozen encounters with totalitarianism, so now options are limited and undesirable. widespread witholding of labor/ consent to be governed is the next step if we are serious about change. politically, we're on the downward slope for at least another 8 years...

Synaesthesia 10y ago

This is why Bitcoin is such an exciting concept: digital cash which can function without any central authority.

golergka 10y ago
Unless a couple of huge mining companies can actually control the network consensus.
- ratacat 10y ago
  Bitcoin can be used anonymously with a little understanding. The ledger is immutable and permanent, however a party is only identified by their public key, and the chain of transactions that carried money to that key. If you can't associate that key with an actual person, we consider that pseudo-anonymity.
emodendroket 10y ago
I don't really get the "anonymity" claims of Bitcoin when there is a central, permanent ledger of every transaction ever made in it.
- Synaesthesia 10y ago
  It's not anonymous. It's pseudonymous, there is a ledger of transactions but you have to still link an address with a person's ID.

tomohawk 10y ago

Once an intermediary feels secure in their position, the temptation to use the position to further other goals becomes pretty irresistable. Consider Square: http://dailysignal.com/2014/09/25/gun-shop-owners-longer-hip-square/ http://dailysignal.com/2014/09/25/gun-shop-owners-longer-hip... They are actively seeking to erode 2nd amendment rights. What other do-gooder impulses will Square pursue? Perhaps they'll next infringe on our 1st amendment rights by prohibiting payments to organizations they disagree with. We see the same thing with speech brokers such as Facebook. Want to exercise your 1st amendment rights? Not on our platform!

forloop 10y ago
1) Here's an example from Quora which I just came across (from Michael O. Church): '“Why are you banned on Quora?” Quora has received funding from, and is at this point largely controlled by, Y Combinator. “An investor” (probably from Y Combinator, but this has not been confirmed) threatened Quora’s management that, unless I was banned in a public way, they would be rendered unable to raise future funding. Vendetta-driven, intentional product failures are more common in Silicon Valley than most people would like to believe, and they come as often from a company’s investors as from its management. I was a top contributor to Quora. I had more than 8500 followers (and, now, over 9000) and was a Top Writer in each year. My answers were published to many of Quora’s media partners, including Time, Fortune, the BBC, and the Huffington Post. Because I was a model contributor, my ban caused a substantial loss of faith, among Quora’s community, in its moderation. User engagement, especially among users deemed to be high-value content creators, began to decline. In reaction to this, Quora asked me to rejoin its community in February 2016, and offered a cash settlement. I turned their offer down.'[0] 2) And of course there's the recent banning of the alt-right figure Milo Yiannopoulos on Twitter. We don't have free speech in the UK (people get arrested for trolling on social networks). It's not as ingrained in our culture. I think it's therefore important for the US to keep their free speech to at least set an example for the rest of the world (a benchmark). [0] https://michaelochurch.wordpress.com/2016/04/18/what-i-fought-for/ https://michaelochurch.wordpress.com/2016/04/18/what-i-fough...
- cma 10y ago

aminok 10y ago

"There's huge interest in cryptocurrencies and what perhaps they can create in the market place. Now we at MasterCard are not completely comfortable with the idea of cryptocurrencies largely because they go against the whole principle that we've established our business on which is really moving to a world beyond cash and ensuring greater transparency.. If you think about it, cash is a problem for a number of countries. Cash really facilitates anonymity, it facilitates illegal activity, it facilitates tax avoidance and a range of other things that aren't going to drive efficiency in an economy" -https://youtu.be/bO4jHXjCXw8?t=2m57s https://youtu.be/bO4jHXjCXw8?t=2m57s "If it's an anonymous transaction, that sounds like a suspicious transaction. Why does somebody need to be anonymous?" -http://youtu.be/bO4jHXjCXw8#t=4m12s http://youtu.be/bO4jHXjCXw8#t=4m12s MasterCard SE Asia President on cryptocurrencies and cash

tunap 10y ago
Says the guy who stands to make ~3% of every single transaction that is deanonymized. For more clarification of how cashless would save us, look into BofA & Wells Fargo's not so distant past laundering of illegal guns & drug monies from Mexico, sure they paid fines & promise to be more diligent. Around the same time was the Wikileaks payments freeze across multi platforms(Guv mandated). Sounds fair & equitable for all who can afford justice.
- aminok 10y ago
  The destruction of privacy also means that the minority has zero protection against the majority. If the majority imposes an oppressive law, like prohibiting financial transactions with people of a certain nationality, or requiring people to hand over 1/3rd of their income for programs that enrich the political establishment and their donors, there is no way to circumvent the law.
  - XorNot 10y ago
    This is not possible today. It is very easy as a government (often something bitcoin people rant about) to bulk transfer wealth from the population to a preferred group, since you have control of the mint. Which is why the mint (reserve bank) is, in all functional countries, a standalone entity with independent decision making power about currency creation. The idea that digitally tampering with bank accounts would not be noticed or reacted to, but softer measures like inflation rate meddling, or stealth measures like doing a currency re-issuance and controlling how hard it is for people to exchange old money, is absurd. Not to mention you've managed to ignore the fact that only a tiny fraction of circulating cash is physical cash anyway. In terms of protecting rights, this is one of the worst, least effective ways to do so.

jcbrand 10y ago

> He (Kenneth Rogoff) argues that, apart from facilitating crime and tax evasion, cash hampers central banks from setting negative interest rates. I think a lot of the "war on cash" boils down to this. Central Banks want to impose negative rates on us to try and get us out of the mess of having too much debt in the system. Cash makes this difficult.

nhaehnle 10y ago
Two points: First, the economic logic of negative rates is actually to try to incentivize the private sector to create more debt. This isn't completely absurd. Slow economic growth quite often boils down to a lack of spending. One way to get more spending is by having the private sector take on more debt. I think this is a bad idea, considering how the global financial crisis was caused by too much private debt in the first place. It would be better to increase public debt, at least in countries with monetarily sovereign governments, since there is no risk of default and the financial chaos that goes with it. Second point: I've been hearing voices against cash since before negative rates became a thing. So while they're certainly a factor, they're far from the only one.
mindslight 10y ago
> Central Banks want to impose negative rates on us to try and get us out of the mess of having too much debt in the system Of course, lower interest rates encourage more debt. So if they are honestly trying to do this, they're doomed to failure. (I model their activity as self-interestedly creating as much debt as possible to further erode the ability of plebs to save, siphoning all economic surplus to them back as rent)
dragonwriter 10y ago
Reduced, including negative, rates are a stimulus measure, designed to (in the short term) increase borrowing (and therefore overall economic activity), not decrease it. Generally, central bank monetary policy is driven by measures of economic activity, unemployment, and inflation.

josscrowcroft 10y ago

This might be a naive question, but has there ever been a successful non-profit bank-like financial institution? As I was reading this article I thought of iPredator.se, which provides a non-tracked VPN service. Their USP is "We don't track anything you do". I wonder whether there could ever be a cashless option that offers a similar service. This of course would only address the concerns of privacy and profit-driven interests, and not the other serious concerns raised in the article. Has there been/could there ever be a bank like that?

cmrdporcupine 10y ago
> This might be a naive question, but has there ever been a successful non-profit bank-like financial institution? Credit unions are not-for-profit institutions, member-owned, and are very successful. But they don't satisfy the second part of your post. Tracking and auditing transactions is kind of built into the idea of modern banking.
halotrope 10y ago
In Germany we have GLS bank which is for profit but has a strong ethics code about their investments and try to maintain high standards of transparency. https://www.gls.de/privatkunden/english-portrait/ https://www.gls.de/privatkunden/english-portrait/

emodendroket 10y ago

What stops banks from implementing a negative interest rate today? Practically nobody keeps a large amount of savings in cash. Such a policy would be really lousy in a society where retirement planning is largely a private affair, though.

aianus 10y ago
They basically already are (at least in Canada). If I keep $1999 in my account the bank charges me $5-$10 a month to hold onto it. I'd wager over a third of the country has less than $2000 in their checking accounts at some point during the month.
- emodendroket 10y ago
  That's a fair point; the mechanism is different but in practice it's the same result.
bahjoite 10y ago
It could be that, faced with a -ve rate, account holders can simply withdraw everything from their account, thus no revenue is generated for the banks and no guarantee that account holders aren't hoarding their cash instead of spending it.
- emodendroket 10y ago
  Yeah, but how many people with significant savings are going to do that?

323454 10y ago

I hereby resolve to use cash as often as I possibly can, to show in my own small way that "the market" still demands the cash option. The small inconvenience of carrying around a few bits of paper and metal is worth it to protect the rights of those outside the banking system.

nicky0 10y ago
Good on you.
deleted 10y ago
[deleted]
mindslight 10y ago
Inconvenience? I once got into a car accident on a friday afternoon. It was on a highway, so my car was towed by scumbags who insisted on bringing it all the way back to their facility rather than anywhere useful. Obviously they wanted to require me to come back later, store it all weekend, and rake in more ill-gotten gains. I demanded my car be released as soon as possible, to which they tried to dissuade me that it would be a lot of money, they didn't take credit cards, they were technically closed so if I went to an ATM they wouldn't be there when I got back, etc. I stood firm since none of this was a problem, bailed my car out, and successfully avoided being further gouged by their racket. If you don't see the utility in carrying cash you're basically asking to be taken advantage of, in both the immediate and long term.

branchless 10y ago

Tracking isn't the problem to prevent tax avoidance at the point where avoidance becomes immoral. UK last month: Grosvenor dies leaving 9bn GBP in land to his son. We have inheritance tax in the UK, the son should have received a bill of several billion which would fund our health service. They know where all the assets are, but the UK govt has a special loophole for rich people: trusts. The son inherits the full 9bn GBP. It's all tracked but the UK is totally corrupt. Given the above example how will the state act against the rich when all "money" is tracked because it's electronic? They won't touch them.

nicky0 10y ago
Who controls the trusts?
- branchless 10y ago
  The land owners have full effective access to all funds just as if they owned them. The uk is a total sham.
wtbob 10y ago
> UK last month: Grosvenor dies leaving 9bn GBP in land to his son. We have inheritance tax in the UK, the son should have received a bill of several billion which would fund our health service. The Grosvenor family have spent the centuries since 1622 — when Sir Richard Grosvenor was created a baronet by King James I — slowly building up their family fortune. In 1761 Sir Richard Grosvenor, Bt, was created Baron Grosvenor; in 1784 he became Earl Grosvenor. In Robert Grosvenor, the second earl, was created Marquess of Westminster; in 1874 Hugh Grosvenor, the third marquess, was created Duke of Westminster. The family has distinguished itself by long and loyal service to the Crown and to the people of England. I fail to see why the new Duke should be forced to see the fortune his ancestors have spent centuries building be diminished so brutally.

branchless 10y ago

This article fails to touch on who issues the money. In particular in the example of the Rai stones it fails to ask what if the ledger keeper could magic up stones all over the island to capture labour by eroding the value of the current stones. Really for me this is one turtle down the stack and he needs to ask who creates credits and what that means. edit: and right on queue in my twitter feed an article on money creation as theft: http://www.bloomberg.com/news/articles/2016-08-17/meet-the-man-who-d-revolutionize-money-from-the-inside-out http://www.bloomberg.com/news/articles/2016-08-17/meet-the-m... edit2: and every single time I submit to a post on money on HN "you're submitting too fast please slow down"! What a surprise...

ape4 10y ago

I like cash too. I'd like to see a smart start up do for cash what Square did for credit card payment. A super simple way for a small store to manage it.

gerbilly 10y ago

I love being able to throw some cash at a taxi driver, or to use cash at a grocery store and just get out of there. As it is lineups at stores are really really slow since every single person has to fiddle with a card and a PIN to pay for their coke and chips.

nicky0 10y ago
This is temporary. Contactless payments will change that so that electronic payment becomes faster than cash for small transactions (as is already happening in many places).
- gerbilly 10y ago
  Even if that is the case, then I don't like the privacy implications. I don't feel great about the Eye of Sauron seeing every single thing I do with my money.

transfire 10y ago

So what are you going to do when they freeze your bank account because you won't submit to a Zika vaccination? We are so fucking doomed.

abpavel 10y ago

"Much fintech 'disruption'..." revolves around eliminating slack and incompetence of the low grade employees. Once you've tried services of an average investment banker, and paid 1% entry fee,1% exit fee, and 1% annual maintenance fee, you'd see fintech needs in a different light.

clarkmoody 10y ago

More symptoms of Terminal-Stage Keynesianism.

upofadown 10y ago

Well if someone comes up with, and popularizes a system that can actually replace cash then we should consider it. I would be thrilled to use something like bitcoin or taler to pay for my groceries. In the mean time we are stuck with physical cash. Credit and debit systems are good for some stuff but are simply not technologically advanced enough to replace cash. In fact, actual electronic cash would to some extent make credit and debit obsolete, as well as causing a great many other changes.