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Interesting post (I love Steven Levitt) but there's a great lesson for developers here: Efficiency is only one consideration. What about usability? Do you reall

Interesting post (I love Steven Levitt) but there's a great lesson for developers here: Efficiency is only one consideration. What about usability? Do you really want to wait in line at McDonald's or Starbucks while someone (maybe a high school dropout) counts on his fingers to make change in 71 & 37 cent coins? The overhead here (an extra coin in your pocket) is well worth the added convenience. Aggregated over the whole economy, those extra seconds would literally be worth billions of dollars a year..

rglullis 17y ago
How about a lesson for lateral thinking? I'd still prefer to do without the coins and go for a all-virtual, all-plastic system. Efficiency and Usability.
- NathanKP 17y ago
  For that matter why not do away with the card as well and use some sort of biometric technology to tie into your bank account? I think that this highlights an interesting parody. To get increased efficiency you need to buy more expensive equipment. A cash register full of bills and coins doesn't cost much and after the initial investment you are pretty much done except for the expense of receipt paper. However, credit cards require more complex card readers, systems to tie the card into central servers, etc. In turn biometrics would require even more: pupil scanners, etc. So the drive for efficiency and usability would appear to lead to even more complex devices, rather than the simple usability of handing a metal disk from one person to another person.
  - byrneseyeview 17y ago
    Where do you want the complexity -- one time, upfront, or during every single transaction? The existence of Hacker News requires a whole lot of complicated technology. Having this conversation via smoke signal requires a much smaller investment. And yet...
    - NathanKP 17y ago
      Clearly without a study it would be impossible to determine whether the upfront complexity of designing and installing specialized credit card equipment would be more or less than the comparatively small complexity of counting out coins. Walmart, for instance, now uses a system that dispenses the coin change automatically so that the person at the cash register doesn't even have to do it themselves.
  - ars 17y ago
    There are three types of security verifications: What you know What you have What you are Of the three, what you know is by far the most secure (in theory). What you are is the least secure. What you know can never be stolen from you, at least not without you being aware of it. What you have is hard to steal, but not impossible. What you are is trivial to steal. Biometrics is the least secure method of verifying someone. It is trivial to clone, and even worse you can clone it at a distance without the person even realizing it was cloned. So no, biometric tech is not a good way to paying someone. However, what you know is subject to people forgetting, and it's hard to have a very long pass phrase. What you have wins easily. And the real world bears this out - every security system everywhere uses it, credit cards, keys, drivers licenses. Computers use what you know only because it's hard to do 'what you have' remotely.
    - sp332 17y ago
      I don't like biometric ID because once someone steals it, you can't be issued a new one!
  - nwatson 17y ago
    Body-tagging as a means of identification for payment is an old idea, almost 2000 years old at least, perhaps longer ... From the New Testament, Revelations, chapter 13: "Then I saw another beast, coming out of the earth ... He exercised all the authority of the first beast on his behalf ... He also forced everyone, small and great, rich and poor, free and slave, to receive a mark on his right hand or on his forehead, so that no one could buy or sell unless he had the mark, which is the name of the beast or the number of his name." Equipment and I.T. systems to enforce biometric/body-tagging systems are costly, but then coins are costly too, and are subject to counterfeiting. The ultimate rationale for a plasticless, cashless system though will be less in transaction costs than in control and elimination of counterfeit currency, money-laundering, payment in currency for corporate and political corruption. In such a system all money flows are visible to someone at some level, and corrupt transactions will become for-barter only. Of course, the central overseeing authority will become corrupt, which the Revelations passage hints at.
- ynniv 17y ago
  Dropping hard currency raises the bar to entry and kills a lot of low end business. No more street vendors, cash only local business, friendly card games or bets, informal services, or convenient tips. It would also give the plastic channel immense power over businesses. You might not use cash very often, but dropping it altogether would not be a good idea.
  - m0th87 17y ago
    Additionally, I like to pay with cash when I don't want my purchasing habits to be collected by the store or my creditor. I find it disturbing how our modern economy makes the task of collecting information on one's interests and identity so effortless. I wouldn't want it to become all the easier.
    - rglullis 17y ago
      The plastic equivalent of cash would not necessarily have your personal information attached to it. Think of it like a prepaid phone. You could go to a Post Office and buy (using your credit card or check) a card with a predetermined value.
      - yummyfajitas 17y ago
        You could go to a post office and buy, in a transaction which is linked to you, a uniquely identifiable card with a predetermined value?
        rglullis 17y ago
        Yes. You could then show that the person has "bought cash", but not what was bought with it. How is it different from a $100 gift card from any store?
        yummyfajitas 17y ago
        A gift card also lets the store track your purchases (unless of course you give it away). The anonymity advantage of cash is that it cycles through the register in a non-deterministic manner. If I buy a $20 bill (serial number 123) from an ATM, and it later winds up at PotMart, that is not compelling evidence I went to PotMart. If I bought a prepaid cash card and it was spent at PotMart, that indicates with decent probability that I purchased some weed.
palish 17y ago
Hey now. I'm a highschool dropout / game developer.
- kakooljay 17y ago
  Just speaking rhetorically.. don't mean to generalize. I'm sure Bill Gates would have dropped out sooner (in high school, instead of college) if opportunity came knocking sooner.. You're obviously an exception & probably dropped out for good reasons :)

rglullis 17y ago

How about a lesson for lateral thinking? I'd still prefer to do without the coins and go for a all-virtual, all-plastic system. Efficiency and Usability.

NathanKP 17y ago
For that matter why not do away with the card as well and use some sort of biometric technology to tie into your bank account? I think that this highlights an interesting parody. To get increased efficiency you need to buy more expensive equipment. A cash register full of bills and coins doesn't cost much and after the initial investment you are pretty much done except for the expense of receipt paper. However, credit cards require more complex card readers, systems to tie the card into central servers, etc. In turn biometrics would require even more: pupil scanners, etc. So the drive for efficiency and usability would appear to lead to even more complex devices, rather than the simple usability of handing a metal disk from one person to another person.
- byrneseyeview 17y ago
  Where do you want the complexity -- one time, upfront, or during every single transaction? The existence of Hacker News requires a whole lot of complicated technology. Having this conversation via smoke signal requires a much smaller investment. And yet...
  - NathanKP 17y ago
    Clearly without a study it would be impossible to determine whether the upfront complexity of designing and installing specialized credit card equipment would be more or less than the comparatively small complexity of counting out coins. Walmart, for instance, now uses a system that dispenses the coin change automatically so that the person at the cash register doesn't even have to do it themselves.
- ars 17y ago
  There are three types of security verifications: What you know What you have What you are Of the three, what you know is by far the most secure (in theory). What you are is the least secure. What you know can never be stolen from you, at least not without you being aware of it. What you have is hard to steal, but not impossible. What you are is trivial to steal. Biometrics is the least secure method of verifying someone. It is trivial to clone, and even worse you can clone it at a distance without the person even realizing it was cloned. So no, biometric tech is not a good way to paying someone. However, what you know is subject to people forgetting, and it's hard to have a very long pass phrase. What you have wins easily. And the real world bears this out - every security system everywhere uses it, credit cards, keys, drivers licenses. Computers use what you know only because it's hard to do 'what you have' remotely.
  - sp332 17y ago
    I don't like biometric ID because once someone steals it, you can't be issued a new one!
- nwatson 17y ago
  Body-tagging as a means of identification for payment is an old idea, almost 2000 years old at least, perhaps longer ... From the New Testament, Revelations, chapter 13: "Then I saw another beast, coming out of the earth ... He exercised all the authority of the first beast on his behalf ... He also forced everyone, small and great, rich and poor, free and slave, to receive a mark on his right hand or on his forehead, so that no one could buy or sell unless he had the mark, which is the name of the beast or the number of his name." Equipment and I.T. systems to enforce biometric/body-tagging systems are costly, but then coins are costly too, and are subject to counterfeiting. The ultimate rationale for a plasticless, cashless system though will be less in transaction costs than in control and elimination of counterfeit currency, money-laundering, payment in currency for corporate and political corruption. In such a system all money flows are visible to someone at some level, and corrupt transactions will become for-barter only. Of course, the central overseeing authority will become corrupt, which the Revelations passage hints at.
ynniv 17y ago
Dropping hard currency raises the bar to entry and kills a lot of low end business. No more street vendors, cash only local business, friendly card games or bets, informal services, or convenient tips. It would also give the plastic channel immense power over businesses. You might not use cash very often, but dropping it altogether would not be a good idea.
- m0th87 17y ago
  Additionally, I like to pay with cash when I don't want my purchasing habits to be collected by the store or my creditor. I find it disturbing how our modern economy makes the task of collecting information on one's interests and identity so effortless. I wouldn't want it to become all the easier.
  - rglullis 17y ago
    The plastic equivalent of cash would not necessarily have your personal information attached to it. Think of it like a prepaid phone. You could go to a Post Office and buy (using your credit card or check) a card with a predetermined value.
    - yummyfajitas 17y ago
      You could go to a post office and buy, in a transaction which is linked to you, a uniquely identifiable card with a predetermined value?
      - rglullis 17y ago
        Yes. You could then show that the person has "bought cash", but not what was bought with it. How is it different from a $100 gift card from any store?
        yummyfajitas 17y ago
        A gift card also lets the store track your purchases (unless of course you give it away). The anonymity advantage of cash is that it cycles through the register in a non-deterministic manner. If I buy a $20 bill (serial number 123) from an ATM, and it later winds up at PotMart, that is not compelling evidence I went to PotMart. If I bought a prepaid cash card and it was spent at PotMart, that indicates with decent probability that I purchased some weed.

palish 17y ago

Hey now. I'm a highschool dropout / game developer.

kakooljay 17y ago
Just speaking rhetorically.. don't mean to generalize. I'm sure Bill Gates would have dropped out sooner (in high school, instead of college) if opportunity came knocking sooner.. You're obviously an exception & probably dropped out for good reasons :)