The importance of cash in a technological society

https://steelrods.hashnode.dev/the-importance-of-cash-in-a-technological-society

by lnahrf • 3 years ago

124 163 3 years ago

steelrods.hashnode.dev

jdse9• 3 years ago

Well we survived blue screens of death for a long while before things crashed less.

Same story repeating with financial systems/data right now. You will get your digital cash back faster than you will get physical cash back when it's stolen. As to privacy and control, don't kid yourself that the plebs have ever had it.

LtWorf11• 3 years ago

We're talking days of downtime.

kristopolous3• 3 years ago

There's already largely cashless societies such as Sweden, where less than 2% of transactions are in cash. All these hypothesis are testable.

We can do material analysis. Observable reality matters, right?

LtWorf11• 3 years ago

I live in sweden.

All the Coop supermarkets closed for 3 days due to a cyberattack in the USA.

Maestro circuit went down for 1-2 days occasionally.

3 days with no food, if it happens in winter, are no joke.

thaumasiotes4• 3 years ago

3 days with no food, if it happens in winter, are no joke.

Three days with no food will have no negative consequences of any kind. It isn't even possible that you'd be harmed by going without food for such a short period.

I just recovered from pneumonia; one of the symptoms was a loss of appetite. The disease was not a joke; the fact that I didn't eat for three days was meaningless.

(Lack of water can cause problems much more quickly than lack of food can.)

abenga• 3 years ago

Isn't this problem solvable by having multiple redundant systems of payment available for use?

The overarching question of freedom from surveillance is much more interesting. It sucks, but it seems for most of us the tedium of using cash is much more inconvenient than value of the perceived loss of freedom & privacy.

kristopolous3• 3 years ago

You still had ICA, normal, lidl, hemkop, city gross, willys, convenience stores, food delivery and restaurants though, right or are you using that as a shorthand for "everything"?

I was in Sweden for 2 weeks in September btw. Using cash was a challenge.

The biggest pain was bill splitting at restaurants. That's so much easier with cash.

Lovely country, btw, recommended. California-ish prices. Get your SIM from 7-11, they're cheaper and also get the 7-day public transit pass, totally worth it.

ff7c11• 3 years ago

If cash disappears, will we return to a barter economy? People will still trade amongst themselves.

forinti• 3 years ago

I doubt it. Barter economies didn't have cellphones, PayPal, M-Pesa, Pix, etc.

perihelions• 3 years ago

Cigarette cartons are an unintuitively good currency object. They're high-density ($/volume or weight), storable, non-perishable, sub-dividable ("packs" in "cartons", I think that's how they're subdivided?). They're easy to count. They come in standard, audited sizes, the trusted-brand manufacturers certifying their weight (?) and stuff. The large population of tobacco addicts guarantees a stable demand, hence a stable value.

e.g. https://www.washingtonpost.com/archive/lifestyle/1987/08/29/...

(From a 30,000-foot view, it's kind of analogous to cryptocurrency. In a failed state, you don't accept cigarettes as payment because you want to smoke them—but because you know you can exchange them again to someone else, and to someone else, eventually reaching a smoker, who creates the demand sink. Similarly, people accept cryptocurrency units because they know at the end of the commerce chain, there will be drug dealers guaranteeing an intrinsic demand).

ta9882• 3 years ago

There are a lot of fakes. Tax stamp traficking is a common thing. And it is much much less dense than a bill or a piece of precious metal.

brewtide• 3 years ago

Reminds me of the articles a decade ago or so about using tide laundry detergent for the same reason.

An example: https://nymag.com/news/features/tide-detergent-drugs-2013-1/

Edit: tide, not ride.

LinuxBender• 3 years ago

Some rural communities already do this and have small private forums restricted to the locals. That does not exclude using cash, it's just another method of trade to fall back on or to use when it makes sense. If the internet is down they can all meet in a church parking lot or someones field.

btbuildem2• 3 years ago

Barter economy is a myth. If you think that's wrong, do a mental exercise -- try to imagine how that would work in practice.

We never, as a species, had any meaningful instance of barter economies. We've had the concept of debt since before we had currency. I imagine this is what we would try to "return" to if cash disappeared, and people needed to exchange goods and services without authorities and intermediaries. This would though require a community, a social fabric -- something that has been steadily eroding for a long, long time.

TheFuzzball2• 3 years ago

It's true that the world is moving towards cashless, and I expect that 30 years from now all transactions will be made digitally.

If you're running a business dealing with cash has a cost. You need a till, you need to keep track of what goes in and out, and at the end of the week you need to take the cash and deposit it in the bank. This is all overhead, and it's much more efficient when all of that is done automatically by Square or whatever POS system you choose.

High traffic services such as public transportation or supermarket shopping will bottleneck with cash. Can you imagine if everyone that wanted to use the Tube in London needed to pay in cash? You'd have a queue that starts in the Cotswolds. Alternatives (like in Berlin) are to make sure everyone buys their train ticket beforehand, and then use ticket inspectors to make sure people travelling have paid - this will lose the transport operator money and make it harder to optimise services based on real-time demand.

We aren't moving towards cashlessness because of some government conspiracy to track us everywhere (governments can do that easily enough via the Internet anyway), it's because it's cheaper, faster, and more convenient for everyone participating in the economy.

Finally, I don't think the dystopia painted in the article is realistic in western countries. The flow of money in the economy is primarily controlled by the private banking sector, with oversight from a central bank (which is public-private hybrid). Transactions can be handled directly from bank to bank, or via a payment processor like VISA or Mastercard. These are all for-profit corporations, and they comply with governments for requests for data, but governments do not have any direct intervention in individual transactions, nor are there rules that could be applied to block transactions on a granular level.

TL;DR we're going cashless because it's objectively better.

zmgsabst2• 3 years ago

Canada seized bank accounts for unapproved peaceful protest.

vivekd• 3 years ago

I agree with you over the parent. The idea that being a so called "Western nation" makes you immune to government abuse seems to be more propoganda than fact.

I looked into Canada's bank seizures, and at the hearings it came out that it was the banks not the government that was pushing for that. Canada's elites do act like the general population are more property than citizens... But I don't see how physical money can solve the problem of tyranny better than digital.

A tyranny can search and seize your physical assets just as much as your digital ones. They passed laws making it harder to store money anonymously, and storing digital assets anonymously might actually be easier in our day and age

LtWorf11• 3 years ago

Why are most shopkeepers in italy upset about being legally forced to accept cards?

The fee of credit card companies are much higher than the cost of dealing with cash, it seems.

friend_and_foe4• 3 years ago

This view doesn't stand to scrutiny. If it were objectively better, you'd expect that government mandates wouldn't be needed, people would just switch to it because it makes their lives easier. It seems to me most businesses accept what people have to give them, that is, debit cards as well as cash. Some businesses have gone electronic only, that appears to be largely a political statement (from groups that supposedly don't want corporations scalping money off everyone at every turn but I digress).

No, I think governments want electronic only payment specifically to raise tax revenue first, because they can get documentation on every little transaction and so can squeeze taxes out of them if they need to, as well as to keep the capital in a central location so as to be in control of it in the event of an emergency. Banks like it because every unit of currency in the economy constitutes their reserves. All in all this looks to me like the dictionary definition of fascism, that is, the marriage of government and corporate power.

TheFuzzball2• 3 years ago

I think at the end of the day you'll continue to think what you want, and that's your prerogative. Handling both cash and card is more expensive for a business, which is the main driver for businesses going cashless, not some government conspiracy to track you.

Obviously the dynamics of this will be per-country, and in a country like Germany which is predominantly cash-based my argument is not true, in a country like Sweden or a city like London it is. I expect this economic pressure to spread to more countries and cities unless there is a strong resistance to it.

An analogy HN might understand: Asking banks and payment processors to report on transactions is like when the UK government tried to get ISPs to store customer's browsing histories. It puts a big maintenance and security burden on the ISP, creating a chilling effect in the economy that no government wants. The type of information that can be recorded is limited because TLS traffic won't contain the individual paths the user visited, it'll just record the IP address being connected to, the time, and the amount of data. Transaction data is at this level of fidelity - you can know that party A transferred $X to party B, but the details of the purchase are not known. For that you'd need to request the transaction details from the individual company, which would have records but is only legally obligated to keep them for 6 years.

I'll leave you with the UK's Payment Markets Summary for 2022, which includes a forecast for 2031 - https://www.ukfinance.org.uk/system/files/2022-08/UKF%20Paym.... People are using these forms of payments because they're easier, faster, and empower them to keep track of their finances. There's a reason challenger banks have been successful - people want to be able to keep track of their spending, and that's really hard with cash.

Cash isn't going away in part because how else are MPs going to pay for cocaine and prostitutes, but I expect more and more businesses to not accept the cost of handling it, especially as it becomes a minority payment method.

TylerE6• 3 years ago

I don’t especially like cash, but I wouldn’t mind it nearly as much if I didn’t have to deal with the inevitable change.

MDWolinski• 3 years ago

Would you like it better if everything was bills? I agree that the change just accumulates and it’s even worse in Euro where 1 and 2 euros are coins.

AdamN4• 3 years ago

In Europe it's intolerable - it's much nicer in the US with 25 cents being the max denomination for a coin.

jwells892• 3 years ago

Change probably wouldn’t be so annoying if there were more to use it on, like how there used to be with 25¢ vending machines and such. These days you need a whole handful to buy anything and who wants to be the person holding up checkout lines counting out coins?

LtWorf11• 3 years ago

In sweden supermarkets have coins machines, you just pour them in a hole and they get counted.

nayuki2• 3 years ago

I spend my coins in ordinary cash transactions. What's the problem? If the cashier can give me change, I can give them change.

2023throwawayy4• 3 years ago

I don’t want to carry around a pouch of coins like a medieval traveler.

citrin_ru• 3 years ago

In US/UK prices like $5.98 are annoyingly common. Paying in cash you are getting pennies of change and to pay with them one have to collect a lot of coins which inconvenient to carry and takes time to count. When prices are reasonably rounded using cash is more convenient.

loopdoend• 3 years ago

Imagine if businesses could just issue you a legal tender "change bill" that's loaded with x amount of change via RFID or something... maybe one time loadable bills that get stamped with the amount so you know how much it's worth without having to revalidate it on the app.

Phones could just pop-up the validated amount when you bring the bill close. Would be cheaper and better than coins. Heck why aren't we able to validate all bills like that?

Oh right this would require a microprocessor... oh well.

avidiax3• 3 years ago

I would like to have a maximum value $100 offline capable smart card issued by the government.

It's, of course, not physically possible to prevent double spending of an offline smart card (just as it's not physically possible to prevent duplicating a $20 bill), but I think it could be made difficult enough, just as is done with physical currency.

People would generally have one of these cards, and use them to make change in cash transactions, or make small purchases outright.

The size of a credit card means that this isn't much more of a money laundering concern than a physical $100 bill is, and if the protocols have tight latency requirements, then these cards can't be used remotely, either. Criminals could punch the chip out (just like a nano SIM), but that's still order of magnitude the same as physical currency.

sparrish2• 3 years ago

I've got a 1 gallon glass jug sitting on my bathroom shelf. I dump my change each night in there and when Christmas time comes, I've got ~$250 to buy my kids gifts with. My bank has a change counting machine that I use for free. I don't mind the change at all. It's like a weird little savings account for me.

TylerE6• 3 years ago

The part I don't like is the "carrying aroundmetallic objects that rattle around all day.".

internet2000• 3 years ago

I get the argument, but the random detour into complaining about the fiat standard was unnecessary and detracted from the point. All of that can still happen with gold backed USD.

ArtTimeInvestor• 3 years ago

Lightning is a cashless alternative to cash with interesting properties.

Is HN read in El Salvador?

It would be interested to hear from someone living over there how it is going with lightning network adoption.

friend_and_foe4• 3 years ago

If you go to the crypto communities on reddit you can get some clear information from time to time. Right now the summary appears to be that it isn't that widely adopted, some people use it but most don't except in spots known for bitcoin tourism. Most people want dollars.

I don't expect this to be the case forever. The value proposition is just too strong. These things take time, especially in places where the people are very suspicious of government actions.

scyclow2• 3 years ago

The actual currency and methods of payment changed over the years – if you go back long enough, you will notice we have used barter systems that exchanged goods and services for other goods and services.

OP needs to read some Graeber and stop perpetuating this myth.

https://en.wikipedia.org/wiki/Debt:_The_First_5000_Years

lcnPylGDnU4H9OF• 3 years ago

Your source corroborates the statement:

A second major argument of the book is that, contrary to standard accounts of the history of money, debt is probably the oldest means of trade, with cash and barter transactions being later developments.

Sure, bartering isn’t the oldest, but the book doesn’t seem to discount bartering entirely.

btbuildem2• 3 years ago

The book does indeed discount barter almost entirely. In the context of human societies over millennia, it's a fringe practice at best. This is even mentioned in the wiki article.

scyclow2• 3 years ago

Yeah, but the article talks about barter in the sense of transacting with natural resources like gold and diamonds. Graeber's point is that these items (along with debt) were mainly used as tools of arranging social relationships. They weren't used for general purpose economic barter as we know it. That only came later, after states introduced coinage and fiat money.

whartung2• 3 years ago

We need better “cash” today. Perhaps bring the $50 back.

It’s easy to go through several hundred dollars a week. But since the $100 is barely legal tender, if you want to carry that much money, it’s a stack of $20s.

And, it’s a big stack, it’s uncomfortable to carry, and ungainly to use. Maybe if I was a mobster, used to a roll and a rubber band, it would be different. But I’m not, and whipping it out to thumb through it, just not comfortable with.

So the other alternative is constantly hitting up ATMs to reload. Or, I guess, take home a large stack on the weekend and withdraw from that throughout the week.

Before this was less of a problem. Couple 20s and you were set.

Nowadays, it’s kind of a pain in the neck.

vwcx• 3 years ago

Could you explain your comment about the $100 note?

A quick peek at the Fed suggests there are more $100 bills in circulation than $1s: https://www.federalreserve.gov/paymentsystems/coin_currcircv...

pokeymcsnatch• 3 years ago

People don't like accepting them because 1. It feels like a huge denomination, and with that comes fear of mishandling and counterfeits, and 2. You have to then make change... and you only have so much of that

And then on the customer's side, you're just back to carrying a bunch of 20's and 10's

system33-2• 3 years ago

Places don’t like to accept them.

- buy a pack of gum with a counterfeit $100, get 98 real dollars back

- even with legit currency, it can throw off the drawer. Business might have a policy for cashiers to never have more than, say, $200 in the drawer. Force half of that to be your $100, and now the cashier has crippled change-making ability. Business have this policy to make them less tempting to rob and limit the damage if they are.

dastbe• 3 years ago

circulating bills don’t have to be in your wallet. 100 dollar bills are primarily used as stores of cash abroad and for illicit wealth. which is why despite the fact you raised people will be skeptical when you try to pay with one.

bluGill2• 3 years ago

Most tills don't have change for a $100, and the clerk isn't allowed to accept it even if (latter in the shift) there was, so while you can pay with one a manager needs to be called to do the transaction. Every time I've paid with a $100 they need to scramble to find enough change, i've even been turned away because they don't have enough cash on hand to give me change.

AdamN4• 3 years ago

Where do you have trouble with hundreds? I could imagine somewhere like Kansas but in any normal city that shouldn't be a problem. To be fair my niece thought it was odd that I had a few hundred in my wallet but at my age I prefer to have plenty of cash.

Oddly now that I live in Germany instead of the US, cash is more common since systems are down more often and it's not considered all that weird.

Asraelite• 3 years ago

cash is more common since systems are down more often

I wasn't aware of payment systems being down often in Germany, but in any case that would only be a minor contributing factor. Germany's dependence on cash is mostly due to deeper cultural reasons.

owlstuffing2• 3 years ago

$100 today is worth less than $10 fifty years ago, and accelerating in that direction. We need to go the _other_ way, we should print $500 and $1000 notes. And while we’re at, stop minting cents, nickels, & dimes.

2023throwawayy4• 3 years ago

I was lamenting yesterday how coins should all just go away. Round up or down.

illiac786• 3 years ago

hmmm, that seemed very high and a quick check on usinflationcalculator.com shows 100$ are more like 15$ from 1973. still impressive, though.

mindslight• 3 years ago

The $50 is here. I've seen plenty of ATMs that have a choice of bills, including $50's. And even for my small bank that doesn't, it's not terribly hard to occasionally grab several thousand in $50's from a teller and cache them at home. On the spending side, I've yet to have someone balk about them the way they might about a $100.

zzzcsgo4• 3 years ago

Uncomfortable to carry a little stack of paper? Maybe find a better way

mplewis• 3 years ago

I too have this problem, but I’ve come up with a solution. I pay a guy to handle transfers of my money for me. I give it to him, and he puts it in a vault, and then I tell him when I want him to give it to someone else. I’m sure he keeps it safe for me.

sparrish2• 3 years ago

Nearly all the fast food in my area won't accept anything larger than a $20. My ATM defaults to $50 bills but I always switch it to $20 because it's so hard to use $50s.

dangus• 3 years ago

Ironically, you are making the argument for a cashless society.

If I use my credit card everywhere, I can't be robbed. If someone rips me off, I have a giant bank that will get my money back. I never have to hit up an ATM for anything; I never have to deal with coins and change. I don't even need to have my physical wallet on me to make a transaction. I don’t need to talk to the cashier or wait in line to order and pay for lunch or coffee. Since you mentioned mobsters, if I pay for my lunch with a card, I know that the business owner can’t as easily evade taxes, stealing from coffers that fund the government services I rely upon.

What exactly would compel me to want to use cash for anything? What about my life would improve?

I would just like to see better data privacy protections surrounding cashless payments, disallowing my card issuer and merchants from abusing and selling information about my transaction history. I would also like to see a low limit placed on transaction fees.

Technically, those are really small problems to fix, if we can get some political will around it. Many other non-US countries have probably already fixed those problems.

trealira• 3 years ago

What exactly would compel me to want to use cash for anything? What about my life would improve?

You can buy things without a third party bank skimming a bit from your purchases.

You can buy things even when Chase and Visa outages occur.

You can give cash to people without credit cards.

Children can manage money without their parents knowing or being able to monitor their spending.

Same with people in abusive relationships; the abused party can hide cash under their bed (or somewhere else) more easily than they can hide their bank account from their abusive partner.

You can buy things from the black market without being traced. For example, you can set up a lemonade stand without a permit with cash (this is illegal in many US states). You might argue "oh, but that should just be legal; that's not a problem with going cashless inherently." But there will always be stupid laws and regulations like this, and cash is a good way to shield yourself from them.

sneak4• 3 years ago

If I use my credit card everywhere, I can't be robbed.

Except for your card, your PIN, and your $1000 phone. Mugging is still a thing these days. You can also get skimmed, or otherwise defrauded using payment cards.

People still get robbed all the time (not the least of which by the payment processors).

sneak4• 3 years ago

I carry stacks of $100s with me everywhere, and rarely have bills smaller. Then again, this half of the year I live in Las Vegas, which is perhaps the only place remaining in the USA that that's not weird.

lemper2• 3 years ago

I definitely agree, I can count with my hands how often I do transaction with ebanking, payment app (similar to google pay), and friends. I dislike the idea that people can track where, how much, and how often my money flow. so I resist the temptation of using that kind of stuff.

p.s., I don't have any credit card.

insanitybit5• 3 years ago

p.s., I don't have any credit card.

This feels like it's just throwing money away though. Like, just an example - Banana Republic will give you a CC for 20% off purchases + 200 dollars off of purchases. There's no fees. So as long as you always pay the minimum, or don't spend on it, you just made 200 bucks + 20% back on anything you've spent.

The "cost" is that American Express knows that I'm buying certain items. I'm ok with that... I find it kinda weird that anyone wouldn't be - is it supposed to be a secret that I wear pants?

I get wanting to avoid using a CC for something sensitive, but what's the issue with putting groceries and clothing on a CC that pays you back? It can easily be thousands of dollars back to you.

pc862• 3 years ago

Not having a credit card if you are able to is, objectively, idiotic. Having it doesn't mean you have to use it, but you are leaving thousands of dollars a year on the table if you don't use it.

Debit cards don't have nearly the chargeback protections credit does. They don't have any of the warranty protections. They don't have any of the card-member services. Look at two people, one who just has a wad of cash and a debit card, and one who has that plus 3 or 4 credit cards. They both travel to a different country and get their debit account frozen erroneously. One is in a world of hurt, the other is mildly inconvenienced.

styfle• 3 years ago

I think the bigger thing that’s overlooked is that nearly every item today is priced assuming the 3% fee from credit cards.

So by not using a credit card, you’re not getting the 3% cash back (or rewards equivalent) and therefore paying more.

There are a handful of places that offer a discount if you pay with cash (or rather a fee if you pay with a card) in order to make these fees clear to the buyer, but it’s becoming rare. Usually gov websites like DMV or mom/pop shops.

meindnoch2• 3 years ago

Banana Republic will give you a CC for 20% off purchases

*first purchase

ComposedPattern• 3 years ago

The problem is that your purchases in aggregate are used to profile you and decide how you should be treated as a customer. Companies decide whether to reject your returns, or to offer you deals on products, based on consumer scoring [1]. Even the background check for my current job involved accessing my consumer score. I don't know if this is in fact done, but I can imagine that an employer could use information reported about your spending to determine what salary they think you would accept. In any case, I don't really want to have to think about this. I don't need to worry about abuse of data that I don't give out in the first place.

Also, apart from your personal self-interest, every dollar you spend in cash is a vote for it to continue being accepted. This is important because there's a minority of people who are excluded from the financial system and depend on cash. For example: undocumented immigrants, sex workers, tax protesters, victims of identity theft, protesters who have had their bank accounts frozen [2], and people who, for inscrutable business reasons, are deemed too high-risk to have bank accounts [3]. If those were the only people who used cash, companies would probably not care to accept it anymore. But the more people continue to use cash on principle, the longer it will remain as an escape hatch for those who need it.

[1] https://www.nytimes.com/2019/11/04/business/secret-consumer-...

[2] https://www.bbc.com/news/world-us-canada-60383385

[3] https://www.nytimes.com/2023/11/05/business/banks-accounts-c...

jfdbcv4• 3 years ago

In the US, not having a credit card is horrible financial advice.

You're paying an additional 3% on all transactions, as that's the standard credit card processing fee.

You're also failing to build up your credit score, which is pretty important if you're ever looking to rent or buy a home.

lemper2• 3 years ago

good thing I don't live in a society with social credit score. be it in consumption or something else.

nunez• 3 years ago

I will give the tiniest example from my personal life - these past few weeks a dear family member has been trying to take out a sum of money from their bank in the form of cash. However, they very quickly encountered irrelevant and overblown bureaucracy (even though it was their money). This prevented them from withdrawing the money until they complied with certain regulations that the bank required them to comply with.

This could, just as easily, have been a story about an elderly person who was trying to withdraw a significant amount of cash to "help someone in need," where that someone is a predatory scammer.

This could, also just as easily, be a story about someone trying to withdraw cash from an account known to be linked to human trafficking, where the "overblown bureaucracy" is attempting to skirt KYC/AML.

LtWorf11• 3 years ago

Or someone wanted to withdraw their own money for perfectly legit reasons.

davemp• 3 years ago

Privacy aside, one thing people forget about paying with cash is that you're also not giving middle men a cut of your transaction.

outime• 3 years ago

But in reality you’ll be paying anyway, just not right away. You need to pay someone to handle the cash (assuming you’re not a tiny shop), potential theft or losing it, human errors when handling it, etc

jfdbcv4• 3 years ago

Statements like these make it hard not to discount the whole article:

By their nature, fiat currencies are manipulatable.

Like it's some kind of big revelation, when it's basic AP macroeconomics monetary policy.

xboxnolifes• 3 years ago

Not everyone knows macroeconomics monetary policy.

jfdbcv4• 3 years ago

Luckily, they can learn about it all for free, right here!

https://www.khanacademy.org/economics-finance-domain/ap-macr...

nayuki2• 3 years ago

If you are selling a vintage Gameboy DMG in pristine condition with the original Pokémon games that your dad bought you 30 years ago - I should be able to pay you $150 (or whatever price we both agree on) without anyone taking a chunk off that transaction, or even knowing it happened. Note that your father already paid his taxes for the transaction when he purchased the Gameboy, 30 years ago.

AFAIK in Canada, secondhand sales are still subjected to the sales tax, which is 13% in Ontario. I noticed this because thrift stores like Goodwill still charge the 13% HST, despite the fact that they're selling secondhand goods that other people have donated for free which have already had their HST paid on their initial purchase.

In fact, you re-donate the item over and over again, and each time a sales tax will have to be paid. The government is totally double-, triple-, and n-dipping on sales tax despite the fact that no new goods have been manufactured.

Another thing to notice is that this disadvantages used goods compared to new goods. If used goods didn't carry the sales tax, they would be cheaper, thus consumers would be more incentivized to save money and do the right thing from an environmental perspective. But because sales tax apply to both cases equally, there is a bigger incentive to buy the new goods.

mo_42• 3 years ago

[...] – if you go back long enough, you will notice we have used barter systems that exchanged goods and services for other goods and services.

Is the any evidence that barter economies existed in large scale? I know this is a complicated question. But I think the author is not quite right. Most probably, people did not exchange pigs for wheat and then wheat for leather as its just too complicated. I think it's more likely that there was a common good that acted as a means of exchange (salt, cigarettes, gold, etc.).

I should be able to pay you $150 (or whatever price we both agree on) without anyone taking a chunk off that transaction, or even knowing it happened. Note that your father already paid his taxes for the transaction when he purchased the Gameboy, 30 years ago.

I accept your opinion here. But I it's not more than an opinion and other people and governments might think different about this. Legal systems and hence tax systems are socially constructed and so there's no inherent truth against which you can argue.

Gold is a finite resource because we know that there is a limit to the amount of gold on the planet, therefore it’s valuable. Fiat currency, on the other hand, holds value just because a governing entity is endorsing it.

Gold and money require both a working government that endorses basic rights to own and exchange goods.

There's not need to bring forward all these myths just to let people know that you like privacy and are against data mining and use of AI in this case.

heartbeats• 3 years ago

David Graeber argues in "Debt: The first 5000 years" that trade started out as being based on debt, and then this turned into a medium of exchange. Barter was never widespread.

simonebrunozzi• 3 years ago

I think using GPT to analyze these spending patterns in brilliant.

I'd go one step further: I would use my own, REAL, transactions, to see what GPT has to say about me!

I would be so curious to hear the results.

This might even become a service. Hiding / obfuscating transactions shouldn't be too difficult.

BrandoElFollito• 3 years ago

Another issue with being completely dependent on software is that during a catastrophic event that tears down or renders our infrastructure useless, it is safe to assume you will not have access to your money (which is crucial for your survival and well-being)

Your money will be the very last of your concerns then. You will need time and effort to repel the hordes wanting your food and water. You cannot eat cash.

jjav4• 3 years ago

There is a large zone between everything is working perfectly and the zombie apocalypse.

Power and/or internet goes out semi-regularly (thanks PG&E) and most of the smaller shops around here go cash-only while offline.

Think of natural disasters like hurricanes where power and internet may be out for a few weeks. All those fancy internet-connected payments mechanisms are out and even simple credit card approvals are usually out. Cash is what you need then.

friend_and_foe4• 3 years ago

There's a great divide between perfectly functioning economy and using ammunition as currency. Something as simple as a broken fiber optic cable, or a small scale war, both could be considered catastrophic (particularly if electronic payment is impossible) while still allowing people to go about their daily lives. But in those daily lives they can do no commerce, rendering the situation much more catastrophic, whereas if they had cash, they could buy groceries and dodge shells on the way home to read a book.

coldblues• 3 years ago

Some of the comments here are so unbelievable but I guess I may fit into the more "hacker" part of Hacker News.

I absolutely can't stand this financial tracking. Nobody should. Cash sure is inconvenient, but at least try paying with gift cards or crypto like Monero, so many services support them.

If you're anti-tax more power to you, corrupt governments who launder EU funds don't deserve any more money.

I've heard several horror stories here about people getting deported and couldn't pay for education because their banks blocked them.

The credit card score system is absolutely dystopian and a foreign concept at least in my part of the EU. You increase your chances of getting doxxed by just having a credit card because all the credit score reporting is done publicly and exposes an enormous amount of data.

Never in my life have I ever walked into a store that doesn't accept cash.

Keep hearing talk about restricting cash payments. Never in my life will I or anyone I know comply with such a dystopian control of money.

zzzcsgo4• 3 years ago

What's wrong with cash again

sneak4• 3 years ago

There are lots of stores that don't accept cash. In the last 30 days I have been to nightclubs in both Las Vegas and Brooklyn that did not accept anything but card payments.

The only way you "don't comply" with such a thing is by leaving the party you just spent $1000 (oh, you can't buy plane tickets for cash) to fly to to see all your friends, because you literally can't buy a bottle of water without a card.

Also recall that many people are literally unable to obtain payment cards, as they are blacklisted by banks or lack the requisite documents to open an account. The banks maintain their financial equivalent of a no-fly list (also with no recourse to figure out why you're on it, or a way of getting off).

shmde• 3 years ago

Isnt it illegal to not accept cash ?

bwanab• 3 years ago

I use cash all the time. But then, I'm old so....

But, this statement: "Fiat currency, on the other hand, holds value just because a governing entity is endorsing it" just isn't true. I see it bandied about a lot by people who have a certain way of thinking. Consider modern "fiat" currencies of reasonably advance countries. What do they all have in common? Debt. Now, you may think that just makes the argument right there that they really are fiat, but what does that debt represent? It represents the endorsement of the currency by all the individuals and entities that hold that debt. Any government that doesn't want their fiat currency to collapse has to behave in a way that ensures those creditors that their confidence is well placed.

sowbug• 3 years ago

You are describing network effects. People use Facebook because people use Facebook, as one example. Network effects are part of the reason why a company like Facebook is valued higher than the net of its assets minus liabilities. In accounting, the value of network effects is called goodwill. (Goodwill is only part of the reason for the higher value; another is expected future growth, both of the network effects and of however the company generates profits.) Currencies like the dollar, yen, euro, etc., have value because people think they have value.

Incidentally, the same network effects apply to digital currencies, as does the expectation of future growth. But for the most part, the future growth of digital or physical currencies is based on the growth of the network effects, because currencies themselves don't generate revenue for "shareholders."

The importance of cash in a technological society

Related Stories