I am always leery of proposals for a cashless society:
IEEE Spectrum Digs Into the Future of Money: First time accepted submitter ArmageddonLord writes ” Small, out-of-pocket cash exchanges are still the stuff of everyday life. In 2010, cash transactions in the United States totaled US $1.2 trillion (not including extralegal ones, of course). There will come a day, however, when you’ll be able to transfer funds just by holding your cellphone next to someone else’s and hitting a few keys — and this is just one of the ways we’ll wean ourselves off cash. In ‘The Last Days of Cash’, a special report on the future of money, we describe the various ways that technology is transforming how we pay for stuff; how it’s boosting security by linking our biometric selves with our accounts; and how it’s helping us achieve, at least in theory, an ancient ideal — money that cannot be counterfeited.”
Read more of this story at Slashdot.
I don’t know if its my inner luddite or my inner libertarian that makes me hesitant of digital-only transactions. Historically, there have always been some type of physical medium used to facilitate the exchange of goods, whether it was a direct barter of something you want from someone else for something you have that they want, or money, whether a hard currency such as gold or silver, or a fiat currency such as Federal Reserve Notes (dollars). Even with a fiat currency such as the US Dollar, you have a failsafe; with dollars in hand, you can buy something when the digital infrastructure goes down. The same cannot be said of a cashless system. Granted, most transactions today do not involve real money; they are just bit transfers from your account to another account in the global banking grid. This requires a fair amount of confidence in the banking system’s ability to maintain systems integrity. Using the Slashdot example of fund exchanges via personal tech, you have to have stronger faith in another set variables:
- Cell phone providers, acting as clearing houses for transactions, will maintain systems integrity at least as well as traditional banks have.
- Their tech doesn’t fail (i.e. transactions process when signal is lost)
- Malware won’t be able to intercept your transactions and steal your identity
- All devices are compatible
This system is fraught with problems. For one, search for some of the problems people have had with PayPal (Disclosure: I’ve never personally had any problems with PayPal) freezing their accounts. Many people, myself included have used Paypal as a bank. Money comes and goes entirely as bits. If you account is frozen, access to your funds is non-existent. So, what if your phone provider freezes your account? How will you access your money?
Or what about when Big Brother (pick a nation, a specific one is irrelevant for this argument) decides to perform a 100% audit of all financial transactions conducted by its citizens? I would assume that even most honest, free people don’t want their governments knowing *everything* they spend their money on. Nothing in anonymous in a digital system. Tie all this in with online medical records and such, and you can see where your local dietary enforcement officer would contact you to find out if you really needed that greasy cheeseburger you just bought, given you’ve already been flagged as obese and a health cost risk on the social healthcare system.
And in a TEOTWAWKI
situation, you’re even further up a creek than you would be with fiat currency. You don’t even have paper that someone might be willing to trade goods for. To paraphrase Cypress Hill
, when the bits go down, you better be ready.
I guess this is just my pessimistic nature. To quote Solomon from Ecclesiastes 1:9
: “That which hath been is that which shall be; and that which hath been done is that which shall be done: and there is no new thing under the sun. (ASV). Not that I think all tech has existed in the past, just that history repeats itself; only the specific details change. Roman civilization believed it was the apex of society, had great plans, and collapsed. The Greeks likewise before them. All their knowledge was lost of centuries. Are we that much greater than those great cultures? Is our tech more robust? No, I would say that we have the most fragile tech that has existed in human history. A thousand years from now what tangible parts of our culture will archaeologists have to assess us? If we go the route of digital currency, it sure won’t be our money.
So I call on you, my fellow compatriots of anachronism, to stand up for the cause of physical money and resist the perceived convenience of all-digital currency. Jingle the coins in your pocket with pride. Pay cash when conducting business with humans. Barter for goods (but don’t evade taxes). Obey Gresham’s law
. And last but not least, let you wallet be made of dead cow and stuffed with dead presidents, not made of lifeless plastic and stuffed with negative electrons.