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Bizarre Shadowy Paper-Based Payment System Being Rolled Out Worldwide
- yoha 13y agoI don't think it will get popular. It needs too much infrastructure for emission and tracking. You will need to manually find a way to get to the right amount using such a restricted set of values [1]. Additionally, you cannot make backups and it is very easy for lose or destroy some of these "bills". It's a nice idea, but there is not a chance it will gain value. I don't think it's worth investing any real money in it. [1] https://en.wikipedia.org/wiki/Change-making_problem https://en.wikipedia.org/wiki/Change-making_problem
- blueblob 13y agoI wouldn't barter any of my cats for this. It is just easier to exchange kittens for services.
- drcode 13y agoI think you've got it wrong. The appeal of those pieces of paper is that they hold their value long term. You can keep them in storage, and in 100 years they'll only have lost a mere 97% of their value.
- polymatter 13y agoThats assuming they don't rot in the process! Now Gold people can trust because that doesn't rot and can last 100 years in a damp jar. You'll never get the public away from the gold standard.
- gamblor956 13y agoCurrency is not meant to hold value; it is not an asset. Currency is a means of transacting. It needs only to hold its value in the short term and change value at a stable and predictable pace.
- jamoes 13y agoCurrency isn't meant to do anything, it just is. The reason you (and others) think it's supposed to lose value is because you've been fed a set of lies meant to deplete your wealth. Try this thought experiment: Let's say the Federal Reserve invented two sets of currencies in 1913: The Dollar, and The DeflataDollar. Both are protected by Legal Tender Laws, both are acceptable for paying taxes, and both are basically accepted everywhere. The only difference is that the supply of Dollars increases every year (as it does now) whereas the DeflataDollar has a constant supply. If your employer offers to pay you in either of these two currencies, which one do you choose? Any rational actor would of course choose to be paid in the currency that won't lose 97% of its value every hundred or so years. The only way to maintain an inflationary currency is to enforce its usage through laws and taxation. Otherwise free individuals will choose something else to trade with.
- rtpg 13y agohow does the company get their deflataDollars? If the supply of your currency is constant, and there's economic growth in some other sector, then the company will (proportionately) collect less, and you'll end up with less deflataDollars in your hands year on year. It's basically the same as inflation.
- dllthomas 13y agoBut your boss isn't going to offer you the same wage in each - they will be able to offer you more Dollars than DeflataDollars after adjusting for inflation, because he needs to take into account the expected value when he's liable to trade the currency for something else, not just the relative values now. If you want to trade for things immediately (say, buy some groceries on the way home from work) you might very well prefer the Dollars. If you plan on keeping your wages under your mattress for 20 years, obviously you should prefer the DeflataDollars, but that's not what most people do. "Any rational actor would of course choose to be paid in the currency that won't lose 97% of its value every hundred or so years." Right, because that time horizon is totally what is relevant when I'm being paid today and turning that money into other things tomorrow.
- Cthulhu_ 13y agoThese 'bills' do have a nice physical feel to them, though. Like bars of gold. It's not as fleeting as digital money. I can see it being used as a means of restricting your budget; after all, most digital money can be spent until it's gone. Adding a boundary like having to go to a conversion point (digital to cash) to get your daily or weekly budget may lead to less spending.
- skizm 13y agoUS coin and bill denominations are designed to make the change making problem easy. You just take the most of the largest denomination without going over. Repeat till change is made. The outcome is always optimal given the set of US currency denominations. https://en.wikipedia.org/wiki/Change-making_problem#Greedy_method https://en.wikipedia.org/wiki/Change-making_problem#Greedy_m...
- ashray 13y agoAmazing post! I wonder why everyone is called Mike Smith in the article though ? Mike Smith - VP of this, Mike Smith - a tourist, Mike Smith - etc. ? Something else that wasn't covered is that cash is also dirty and carries grime and infections. Ideally you should wash your hands before you eat if you handle any cash. (this is less of a problem with laminated/plastic notes like the CAD or EUR) Imagine a super virus propagating and killing people through cash. Ouch!
- hapless 13y agoThere are few, if any, documented cases of illness being transmitted by cash. This is why regulation does not require food handlers to take special precautions while handling cash.
- redblacktree 13y agoA quick google turned up this document[1], which claims that food handlers should wash their hands, "after handling money or a cash register." http://www.healthandwelfare.idaho.gov/Portals/0/Health/FoodProtection/Employees%20Guide%20to%20Food%20Safety.pdf http://www.healthandwelfare.idaho.gov/Portals/0/Health/FoodP...
- bertil 13y ago[This is satyre, imagining cash introduced now, and mocking BitCoin's critics. Some ring true, some miss the two-sided market issues behind adopting new payment forms.] To be honest, I’ve been in Nordic countries for a year (where all transaction are card-based, and there is no minimum amount for payment) and that situation rung surprisingly true — especially after yesterday, when I was facing a coat valet who was expecting a ten crown in cash.
- busterarm 13y agoI had amusing experiences in Denmark where I was forced to walk around with about 10,000 kroner because American banks and lending institutions are too lazy and cheap to implement Chip-and-Pin systems. Also almost nobody takes American Express (I don't blame them though). Anyway, folks' reactions to that much cash were pretty much "are you a drug dealer?", which was pretty funny. At least I _always_ had cash for the Pølsevogn. :) I had similar happen to me in Iceland but they're slightly more cash and "Yankee Plastic"-friendly.
- alayne 13y agoBitcoins (and others) aren't backed by a government. One of the major exchanges used to trade Magic the Gathering cards (You know, for kids!). Bills also have serial numbers that provide some amount of traceability, at least between Federal Reserve branches and banks.
- clavalle 13y agoBitcoins are made, literally, of nothing but tracability.
- alayne 13y agoI'm disputing the article's statement that "cash is a 100% anonymous and untraceable payments technology"
- kbenson 13y agoTrue, it's not always 100% untraceable, but it is in the very high nines. From the serial we know where it was printed, and it may occasionally be tagged as it goes through various systems (if ATMs don't scan for serial and track incoming and outgoing bills, I imagine it's just a matter of time), but there's still many methods of getting cash that do not link a serial number to you directly (and in most cases not indirectly either). Getting cash from a human bank teller, change from a high cash-flow business, etc.
- shiftpgdn 13y agoA. MtGox never traded magic the gathering cards, this is a myth. The domain might have been bought for that but it was never a trading platform for magic cards. B. Magic the Gathering isn't just for kids! It's actually quite fun.
- kbenson 13y agoB. Magic the Gathering isn't just for kids! It's actually quite fun. I'm pretty sure the "You know, for kids!" is a Hudsucker Proxy reference.
- kordless 13y agoThis article is entertaining, interesting and relevant. Humans are exceptionally good at rationalizing their biases, especially if they involve trust, and interest is required to alter those biases in a positive way. The biggest challenge for cryptocurrencies today is raising interest and trust in the general population. We can best effect that by working hard to raise interest in cryptocurrencies in a positive way. This is more commonly known as "marketing".
- at-fates-hands 13y ago>> The biggest challenge for cryptocurrencies today is raising interest and trust in the general population. I would actually say its getting the general public informed. 75% of the US population are aging baby boomers. They can barely work an iphone, how the heck do you think they're ever going to accept cryptocurrency? Even with a ton of marketing, this is something that is completely foreign to 85% of the general population.
- k-mcgrady 13y ago>> "I would actually say its getting the general public informed. 75% of the US population are aging baby boomers. They can barely work an iphone, how the heck do you think they're ever going to accept cryptocurrency? Even with a ton of marketing, this is something that is completely foreign to 85% of the general population." You're saying 75% of the US population cannot work an iPhone? Or 75% are baby boomers?? Just so you're more informed next time you make up stats, less than 15% of the US population would be considered baby boomers. Source: http://quickfacts.census.gov/qfd/states/00000.html http://quickfacts.census.gov/qfd/states/00000.html and http://en.wikipedia.org/wiki/Baby-Boom_Generation http://en.wikipedia.org/wiki/Baby-Boom_Generation
- at-fates-hands 13y ago"Baby Boomers make up 35% of the American adult population (Scarborough)." "By 2015, those aged 50 and older will represent 45% of the U.S. population (AARP)." http://www.immersionactive.com/resources/50-plus-facts-and-fiction/ http://www.immersionactive.com/resources/50-plus-facts-and-f... Ok so not exactly 75%, but I was a lot closer than the 15% you mentioned.
- acconrad 13y agoMy issue with fluff pieces like this is that there are plenty of established tools in our lives that would not be available if they started out today. Acetaminophen (or Tylenol by it's brand name) is often touted as a drug that would never pass modern FDA regulations if it were introduced today due to it's issues with liver toxicity and link to Reye's Syndrome. We make products and services with what we have available at the time, that doesn't necessarily mean that they are an indefinite solution, nor does it mean that we are going to hold our archaic solutions to the same standard we do with our new and improved solutions.
- hapless 13y agoTylenol should probably not be available over the counter. It has a narrow therapeutic index and safer, equally effective alternatives.
- Consultant32452 13y agoConversely: everything should be available over the counter. If someone wants to kill themselves by destroying their liver with acetaminophen, that's their business.
- hapless 13y agoIf everything were available over the counter, the presumption of safety would disappear, and we wouldn't have a problem. As it is, we have a two tier system. Consumers are trained that OTC drugs are so safe they barely have to glance at the instructions. APAP is vastly more dangerous than its peers on the OTC shelf, and consumers are placed at risk.
- Cass 13y agoWhat are those safer, equally effective alternatives? Ibuprofen causes gastric ulcers, Diclofenac does too, Aspirin is an anticoagulant, and Metamizole can cause agranulocytosis. Also, the maximum recommended daily dose for Acetaminophen is somewhere around 3500 mg, which is seven extra strength Tylenol - hardly what I'd call a narrow therapeutic index.
- beobab 13y agoSounds like a great idea. I'd love to get some of this "cash" stuff everyone keeps talking about.
- almosnow 13y agoYeah, sounds like you could build a really cool civilization over that, I'm totally in. (Not sarcastic at all, I definitely enjoy the world and how it works.)
- leobelle 13y agoEver since POS hacks on Target and other retailers I've completely switched to cash only. Not only can't you be tracked, something I'm not sure I care about, but it reduces the chances of somebody stealing your card info. And I only use wells fargo ATMs, because they have a nice green glowing card input, so you know nobody put a malicious card scanner on the ATM. It's a complete reversal from a few years ago where I wouldn't carry cash and wouldn't go anywhere that was cash only. Going cash only also reduces the fees for stores where you buy things. Cash is the way to go, despite all of our technology.
- hahainternet 13y agoSweet, now you have no insurance and you carry about significant quantities of money I'm sure you're much safer.
- leobelle 13y agoInsurance against what? I don't carry boatloads of cash on me.
- hahainternet 13y agoInsurance against theft, fraud, any transaction based deception you are now unprotected against. Once you have handed over cash, it'll take a herculean effort to get that back. On the other hand, when someone mugged me for my card, I cancelled it a few minutes later and had a replacement within 2 days. I lost nothing but my pride and my wallet.
- waterlesscloud 13y agoLast time I was robbed of cash - never. You're dramatically overplaying that risk.
- deleted 13y ago[deleted]
- keithgabryelski 13y agogo home bitcoin -- you're drunk. bank notes are a very simple system, so simple it has been used for over a thousand years.
- shitgoose 13y agoGold has been around for over a thousand years. Bank notes that cannot be exchanged for gold at fixed rate are recent invention (1971).
- lmm 13y agoGold was used to back currency for less than a hundred years (except in Britain). Pre-1800 banknotes were never pegged to gold. (If you were talking about silver you might have a leg to stand on).
- redblacktree 13y agoBut didn't folks primarily use hard currency prior to 1800? Wouldn't that obviate the need for "backing?"
- shitgoose 13y agoGold didn't back currency, it was currency.
- redblacktree 13y ago1971 puts it a little too close to the present. Individuals haven't been able to convert notes to hard currency since June 5, 1933, when legal tender laws were introduced. That said, I still agree with the thrust of your argument, that we're in new territory with regard to unbacked paper money.
- dualogy 13y ago> Individuals haven't been able to convert notes to hard currency In the US! Well, the rest of the world had other worries back then anyway, and after WW1 + WW2 most of the world's gold was on US soil thanks to trade flows and custody deals and debts etc etc. Hard to keep a gold standard when all the gold is with one party for all intents and purposes ;)
- hapless 13y agoSatire works when you hold folly up to ridicule. Central banking is possibly the greatest human invention since sanitation. The U.S. central banking system ranks among the finest of its kind. Bitcoin handles 7 transactions a second on a good day, has no reliable institutional actors, and I can neither pay taxes nor satisfy court judgments with it. It is an impressive proof-of-concept for decentralized trust in cryptosystems, but it is hardly a currency.
- spindritf 13y agoThe article isn't ridiculing the central/fractional banking system. It's ridiculing the response to bitcoin.
- hapless 13y agoFor the satire to work, the parodied criticisms have to make sense when applied to central banking systems. But they don't. When satire doesn't work, the author looks sillier than your target. I don't think this was a goal.
- spindritf 13y agoJust the opposite. They can't make sense when applied to the current banking system because the idea is to show that criticism of bitcoin also misses the point. So the flaws of cash listed in the article are superficially plausible but we know they weren't much of a barrier to wide adoption.
- hapless 13y agoCash was "adopted" because it is backed by the United States Federal Reserve System. It is legal tender. It is fungible: every checking account is equal. It is issued by regulated institutions, people who sue you are obliged to accept it, and the IRS will take it as payment. This was not always the case. Before the advent of central banking, cash was just as dodgy as Mt. Gox internal transactions. You were unlikely to be able to use cash more than five miles from the bank that issued it. Balance statements were purely arbitrary because you had no insight into your (unregulated) bank's books. In the 19th century, transactions across long distances looked more like hawala than anything the modern man would recognize as banking. This satire was written by someone who does not understand what he or she is attempting to satirize.
- raverbashing 13y agoThis is the premise behind the subreddit r/ActualMoney Satire is an interesting way to analyze things, especially in this case.
- Marazan 13y agoNo, the actual money subreddit is taking the piss out of Bitcoin.
- williamcotton 13y agoOur currently existing currencies evolved over time. Central banking and fiat currency were institutions delivered by liberal democracies by the process of public debate. They were not hair-brained ideas established by anonymous individuals engaged in private debate outside of the forums of democracy. Look, I know all of you are very excited about these experimental economic and political systems, but please realize that the existing world that you are "suffering" under was mainly developed as a slow process of evolution. Most extreme revolutionary ideas take a long time to work their way in to the existing societal structures and way of life. When they're quickly forced on to people, all fucking hell breaks loose. So for fucks sake, get some balance and control your zealotry, people! And read some history books! The future is built from the past no matter how long or hard of a process that seems to be. Go with the flow! Engage with other people. Engage with the existing institutions. Even if it is a better idea, there are billions of people who rely on the current system in ways that you can't predict.
- alexmat 13y ago"The future is built from the past no matter how long or hard of a process that seems to be." Observation of the past does not allow one to accurately predict the future. I recommend Karl Popper's classic, "The Poverty of Historicism", which expounds on the topic.
- williamcotton 13y agoI'm not talking about predicting the future. I'm talking about the fact that you can't escape the past. And you mean the same book that Popper dedicated "In memory of the countless men and women of all creeds or nations or races who fell victim to the fascist and communist belief in Inexorable Laws of Historical Destiny"? Much like how everyone is trumpeting the "inexorable laws of historical destiny" of Bitcoin? Hmm? Thank you for reminding me of this book, BTW, I had sort of forgotten about it! Unfortunately you seem to have misapplied its lessons but it is actually basically in support of the same sort of arguments I've been making about Bitcoin.
- freework 13y ago> They were not hair-brained ideas established by anonymous individuals engaged in private debate outside of the forums of democracy maybe not when they were founded, but thats definitely what the banking system has become in the year 2014...
- deleted 13y ago[deleted]
- teddyh 13y agoI Can Barely Draw webcomic has recently had a number of comincs in the same vein as this, starting here: http://www.icanbarelydraw.com/comic/2565 http://www.icanbarelydraw.com/comic/2565
- Eleutheria 13y agoThe good. Money is good, in any form. Banks are good, they help allocate resources in a capitalist economy. Central banks are good, they can help other banks in need. The bad. Fractional reserve banking is robbery. Inflation is robbery. Printing money is robbery. The ugly. Government, the fed, banksters, they are a maffia, a band of thugs writ large.
- talmir 13y agoThis reminded me of the fact that I havent handled, or even touched, real paper money for at least a year now. Here in Iceland paper currencly is slowly being phased out, and has been for a few years.
- the_watcher 13y agoObviously hyperbolic and not a perfect comparison, but gets enough right to be pretty damn clever. The "hardware wallets" security flaws and anonymity facilitating criminals are particularly enjoyable. The more policy-oriented economic points aren't nearly as strong, but overall, I thoroughly enjoyed it. Just to be clear: I like Bitcoin a lot, but I don't think it will ever replace national currencies. I just enjoy pointing out the hypocrisy of a lot of bitcoin detractors.
- Tloewald 13y agoThe article is idiotic and disingenuous. Paper money didn't attempt to replace coin in one fell swoop. Paper money evolved from letters of credit which make perfect sense, and bitcoin fundamentally relies on similar concepts anyway. You can't buy something online by just anonymously transmitting credits into an account -- who gave us the money? what do they want? You fill in an order form, a bunch of stuff happens, you get a receipt and a product and money gets transferred at some point. Very little of that is the currency transaction. You needed to generate a letter that said I want X and I'll pay you Y, then you paid Y and sent confirmation of the money transfer, and so on. The bitcoin bulls think that Credit Cards are a terrible way to buy things because they charge too much for what they do (and their security sucks). This may be true, but bitcoin is only solving the easiest part of the problem. Banks can already transfer money around cheaply and securely. Indeed even market transactions are so fast and inexpensive that high speed trading is now a huge economic force. The fact is that credit cards (a) let you buy stuff on credit, (b) provide transactional support allowing commerce to proceed smoothly, and (c) already work. A credit card is merely automated checking with overdrafts, which is a direct descendant of the letter of credit (from which cash evolved), which is in fact a more fundamental method of trading than barter. (Tracking people's accounts is the reason writing was invented.)
- justinzollars 13y agoI'll take any unwanted bills. :)
- jcslzr 13y agothey say that is why they sink the Titanic, on board was all the powerful people that opposed the creation of the Fed, (I personally don't think an iceberg can do that), but anyway one year later the Fed was born.
- GigabyteCoin 13y agoThat sounds like a tall tale if I have ever heard one.
- MartinCron 13y agoI personally don't think an iceberg can do that Oppose the creation of the Fed? Icebergs are very persuasive. You should stop listening to whatever conspiracy nonsense you're listening to and go talk with an iceberg instead.
- Sheepshow 13y agoWhat a circle jerk.
- raintrees 13y agoI don't know if anyone remembers Bob Newhart standup shtik, but this article (abridged/down-sized) would fit right in there...