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Meanwhile in the highly planned and regulated Swedish economy... they are planning to end cash, a step which the government elites tout as progress and sell as

by solson 15y ago

Meanwhile in the highly planned and regulated Swedish economy... they are planning to end cash, a step which the government elites tout as progress and sell as a safety measure. Looks like the underground will need to find an alternative currency. Bitcoin? http://www.newjerseynewsroom.com/economy/voice-of-opposition-grows-as-sweden-considers-going-cashless http://www.newjerseynewsroom.com/economy/voice-of-opposition...

cs702 15y ago
Agree. In the absence of officially sanctioned cash, something like Bitcoin would likely become a viable alternative for System D transactions. See http://news.ycombinator.com/item?id=3735407 http://news.ycombinator.com/item?id=3735407 elsewhere in this thread.
bilbo0s 15y ago
Hmm... Not really sure bitcoin could compete well in Systeme D. You are dealing with a lot of people who believe in cash or precious metals. These bring trust in Systeme D. One thing the article doesn't mention is that the Somalis are actually making a pretty big impact as proprietors of a sort of 'banking' system for these kinds of transactions. If you give a Somali 'banker' ... say ... 2000 Euro in Norway, you can count on your cousin in St. Paul, MN getting 2000 Euro from one of the local Somalis. The same is true if you want money to go from Sao Paolo to Capetown. Or Shanghai to Dubai, etc. Their system is robust, extremely trustworthy, and most important, quiet. It is DEEPLY lodged in shadow trans african trade, and rapidly growing in shadow global trade. It will be hard to displace a system like that. Unless the world's Governments decide to invade Somalia, which does seem to be the case lately. One place bitcoin might be useful is in large transactions. The Somalis don't seem to be interested in facilitating these yet, and for obvious reasons, merchants do not want to use cash. If bitcoin builds a reputation for trust on large transactions, perhaps through the convenience of mobile phones it can work its way down the food chain so to speak. But... yeah ... right now there are a lot of Africans for instance, who trust the Somali networks more than the banks in their own countries. Trust like that is hard to earn...and very expensive to buy. It could happen for bitcoin though if boosters put in the work.
- solson 15y ago
  Agreed, but if there is no paper or coin cash like Sweden is proposing, how would the "Somali Banker" get digital currency to a party in the jurisdiction without paper currency? I assume it is all done in paper cash today. Barter seems impractical.
  - bilbo0s 15y ago
    You might have noticed I used the example of inputting Euro into the Somali system in Norway. The fact that Norway uses the Krone does not mean that Euro are not readily available. Likewise, Sweden may switch to digital, but Euro and dollars, and certainly silver and gold will be readily available. Doesn't matter that a person gives the Somali CFA in Cameroon, Euro will come out in Paris. The Somalis are good with that sort of thing. You just tell them how much and exactly who is supposed to get it. They can make it happen. What's crazy is that they can even make it happen in war zones. Even in a place like Goma with genocidal Hutus and lunatic Tutsis running around. I suspect it actually works better in places like that because the corrupt generals need some way to get their ill gotten gains out.
- cs702 15y ago
  Yeah, it comes down to trust, which Bitcoin currently is lacking compared to "hard" paper currencies like the US dollar or precious metals like gold. It could take Bitcoin years or even decades to gain similar credibility. It also comes down to familiarity, ease of use, and functionality. Bitcoin wins on the latter, but is far behind on the other two dimensions. Paper currency and precious metals are currently far better known and easier to use, and this won't change in the near future. Over the long run, if Bitcoin continues to gain credibility (and becomes easier to use for regular folk), I'm persuaded it can become a viable alternative to paper currency and precious metals for System D transactions.
- 286c8cb04bda 15y ago
  > One thing the article doesn't mention is that the Somalis are actually making a pretty big impact as proprietors of a sort of 'banking' system for these kinds of transactions. That system is "hawala"[1]. The Somalian diaspora (caused by perpetual civil war) is spreading the institution into many countries where it's not been practiced historically. [1] http://en.wikipedia.org/wiki/Hawala http://en.wikipedia.org/wiki/Hawala
286c8cb04bda 15y ago
Looks like the underground will need to find an alternative currency. Bitcoin? In the long term, Bitcoin might be a viable alternative. It really hinges on the adoption of cellphone applications for exchanging them, I think. In the short term, though, cash is king. If they stop printing paper kronor in Sweden, then the underground will start using somebody else's paper, be that NOK or USD. As an example, I'd guess there are areas in Mexico where you can get by entirely in USD, because there's so much of it there.
InclinedPlane 15y ago
They'll just use dollars and Euros. Why wouldn't they?
tomjen3 15y ago
Unlikely. It will properly be gold or silver -- not because they are without their own problems, but because this has been the case historically and humans have an easier time trusting things that aren't new, that they can physically get their heads around and that they can hold in the palm of their hands. Too may people have far too big a distrust in computers to be able to trust bitcoin.

by solson 15y ago

cs702 15y ago

Agree. In the absence of officially sanctioned cash, something like Bitcoin would likely become a viable alternative for System D transactions. See http://news.ycombinator.com/item?id=3735407 http://news.ycombinator.com/item?id=3735407 elsewhere in this thread.

bilbo0s 15y ago

Hmm... Not really sure bitcoin could compete well in Systeme D. You are dealing with a lot of people who believe in cash or precious metals. These bring trust in Systeme D. One thing the article doesn't mention is that the Somalis are actually making a pretty big impact as proprietors of a sort of 'banking' system for these kinds of transactions. If you give a Somali 'banker' ... say ... 2000 Euro in Norway, you can count on your cousin in St. Paul, MN getting 2000 Euro from one of the local Somalis. The same is true if you want money to go from Sao Paolo to Capetown. Or Shanghai to Dubai, etc. Their system is robust, extremely trustworthy, and most important, quiet. It is DEEPLY lodged in shadow trans african trade, and rapidly growing in shadow global trade. It will be hard to displace a system like that. Unless the world's Governments decide to invade Somalia, which does seem to be the case lately. One place bitcoin might be useful is in large transactions. The Somalis don't seem to be interested in facilitating these yet, and for obvious reasons, merchants do not want to use cash. If bitcoin builds a reputation for trust on large transactions, perhaps through the convenience of mobile phones it can work its way down the food chain so to speak. But... yeah ... right now there are a lot of Africans for instance, who trust the Somali networks more than the banks in their own countries. Trust like that is hard to earn...and very expensive to buy. It could happen for bitcoin though if boosters put in the work.

solson 15y ago
Agreed, but if there is no paper or coin cash like Sweden is proposing, how would the "Somali Banker" get digital currency to a party in the jurisdiction without paper currency? I assume it is all done in paper cash today. Barter seems impractical.
- bilbo0s 15y ago
  You might have noticed I used the example of inputting Euro into the Somali system in Norway. The fact that Norway uses the Krone does not mean that Euro are not readily available. Likewise, Sweden may switch to digital, but Euro and dollars, and certainly silver and gold will be readily available. Doesn't matter that a person gives the Somali CFA in Cameroon, Euro will come out in Paris. The Somalis are good with that sort of thing. You just tell them how much and exactly who is supposed to get it. They can make it happen. What's crazy is that they can even make it happen in war zones. Even in a place like Goma with genocidal Hutus and lunatic Tutsis running around. I suspect it actually works better in places like that because the corrupt generals need some way to get their ill gotten gains out.
cs702 15y ago
Yeah, it comes down to trust, which Bitcoin currently is lacking compared to "hard" paper currencies like the US dollar or precious metals like gold. It could take Bitcoin years or even decades to gain similar credibility. It also comes down to familiarity, ease of use, and functionality. Bitcoin wins on the latter, but is far behind on the other two dimensions. Paper currency and precious metals are currently far better known and easier to use, and this won't change in the near future. Over the long run, if Bitcoin continues to gain credibility (and becomes easier to use for regular folk), I'm persuaded it can become a viable alternative to paper currency and precious metals for System D transactions.
286c8cb04bda 15y ago
> One thing the article doesn't mention is that the Somalis are actually making a pretty big impact as proprietors of a sort of 'banking' system for these kinds of transactions. That system is "hawala"[1]. The Somalian diaspora (caused by perpetual civil war) is spreading the institution into many countries where it's not been practiced historically. [1] http://en.wikipedia.org/wiki/Hawala http://en.wikipedia.org/wiki/Hawala

286c8cb04bda 15y ago

Looks like the underground will need to find an alternative currency. Bitcoin? In the long term, Bitcoin might be a viable alternative. It really hinges on the adoption of cellphone applications for exchanging them, I think. In the short term, though, cash is king. If they stop printing paper kronor in Sweden, then the underground will start using somebody else's paper, be that NOK or USD. As an example, I'd guess there are areas in Mexico where you can get by entirely in USD, because there's so much of it there.

InclinedPlane 15y ago

They'll just use dollars and Euros. Why wouldn't they?

tomjen3 15y ago

Unlikely. It will properly be gold or silver -- not because they are without their own problems, but because this has been the case historically and humans have an easier time trusting things that aren't new, that they can physically get their heads around and that they can hold in the palm of their hands. Too may people have far too big a distrust in computers to be able to trust bitcoin.