> People value cash differently than they value electronic money, even though the two have the exact same value. Except when they don't. To a Greek, 100k EUR i

> People value cash differently than they value electronic money, even though the two have the exact same value. Except when they don't. To a Greek, 100k EUR in the bank today is worth some percentage of 100k EUR. His account is illiquid. There are currency controls. There may or may not be a "deposit haircut", like in Cyprus, where the numbers in the databases were simply all reduced. By the way, I'm very curious what the percentage is. The Greek guy certainly can't withdraw his 100k EUR retirement savings as cash, nor can he transfer them outside the country. He can still wire the money to another customer at the same Greek bank though, right? Say he finds someone on Craigslist who's willing to give him 90k EUR cash in return for that transfer. That would mean one Greek-bank-account-EUR is worth roughly 0.90 EUR. What's the actual rate right now? -- Bank accounts of every kind share an important property: they have counterparties. Colloquially, money may be "in an account", but in reality, your account is on the bank's balance sheet as a liability. When you deposit, you are actually lending your counterparty money. Some accounts have a reasonably trustworthy counterparty. Others, like a Cypriot savings account a few years ago, or an account at MtGox for that matter, did not. The idea that $X in a bank account is always worth the same as $X cash is a reassuring fiction. Counterparties are unavoidable in a centralized system. Counterparties vary in trustworthiness, and even a trustworthy counterparty today might not be tomorrow. -- I think this is a fundamental advantage of decentralized stores of value, including paper cash.