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Why we should fear a cashless world

theguardian.com

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Re: Why we should fear a cashless world

#11

Post by mirimir »

adrianN wrote: post #7
BIackSwan wrote: post #2

Genuine question - What about a "cashless" currency based on blockchain? (a la bitcoin). Wouldn't it be and not be under any single entity's control at the same time?

Cash and current forms of electronic payment have the nice feature that the seller gets their money almost immediately. As I understand it, bitcoin transactions take a while to confirm. I wouldn't want to stick around in the shop until some miner got around to my transaction.

Small payments using BitPay require one confirmation, and that typically only takes a minute or so. Their fee (1%, I think) covers reversal risk.

Re: Why we should fear a cashless world

#12

Post by mtgx »

BIackSwan wrote: post #2

Genuine question - What about a "cashless" currency based on blockchain? (a la bitcoin). Wouldn't it be and not be under any single entity's control at the same time?

Not necessarily. What we're seeing with Ethereum, for instance, which seems to be the main blockchain technology that banks want to use right now, is that it was "customized" to fit the banks' needs to the point where the blockchain used by the banks doesn't even need to be public, the way Bitcoin is. It also doesn't need to work based on the "consensus" mechanism. And it could be further modified so that each transaction can also be wiretapped/blocked directly by the NSA, and so on.

I don't necessarily blame Ethereum for this, although they did have a hand in following the banks' rules and essentially writing software for them, but this would've probably happened even without Ethereum agreeing to do it. Maybe the banks would've forked Ethereum's technology and then they could've done whatever to it, or they could've written their own tech from scratch.

Re: Why we should fear a cashless world

#14

Post by fennecfoxen »

> We already live in a world that is, as far as the > distribution of wealth is concerned, about as unequal > as it gets. It may even be as unequal as it’s ever been.

Sure, if by "a world" you mean "a hyper-prosperous nation like the US or the UK"... and if by "unequal as it's ever been" you mean that third-world countries are taking our jobs and becoming much more prosperous, hitting our middle income brackets - the global 2% - harder than anyone else.

If you really mean globally, then inequality is in fact falling.

But sure, yes, the "cashless" ideas going around today are just a way for the government to enforce surveillance and steal away citizens' money with negative interest rates.

Re: Why we should fear a cashless world

#15

Post by scholia »

mikegioia wrote: post #10

I've been "cash only" for 8 months now and I love it. Of course I need a credit card if I buy something on Amazon or a one-off web store, but the point is to move as many transactions offline as possible. There are so many privacy benefits to using cash, but one that really resonates with me is the physical nature of it. When you pay for something with cash, you can feel the transaction of money exchanging hands and…

On the plus side, using a card gives you a good list so you can see what you've spent. This makes accounting simpler than using a cash book and accumulating receipts.

On the minus side, I use contactless ("wave to pay") all the time now, and find I rarely look to see how much I'm spending on small transactions. Even with larger transactions, it doesn't feel like "real money".

Re: Why we should fear a cashless world

#16

Post by unknown_apostle »

BIackSwan wrote: post #2

Genuine question - What about a "cashless" currency based on blockchain? (a la bitcoin). Wouldn't it be and not be under any single entity's control at the same time?

The biggest danger with blockchain is that if it ever fails, it would fail for technological reasons and its failure would be instant and complete. Like encryption being broken. Instead of government money, where the failure is telegraphed years in advance, e.g. by reckless abuse of the printing press.

Re: Why we should fear a cashless world

#17

Post by staticelf »

The best tip ever for saving to only spend cash. When you have the physical money leaving your hands it feels like a lot more than inserting a card and pressing a pin code.

I am mostly using cash if I have the possibility to, which is kind of annoying sometimes since in Sweden (where I live) there are many "cashless" shops. Even in normal grocery stores checkouts it's like 50/50.

I've never visited a country that has as strong opposition to cash as in Sweden. One time I walked into a boutique trying to purchase a cellphone and the salesmen there were happy to help. Unfortunately they told me that they didn't accept cash and then I just said "then there's no deal". The look on their faces was kind of fun, even if it sucked that I had to redo the whole process.

Re: Why we should fear a cashless world

#18

Post by kagamine »

joefarish wrote: post #4

Cash, on the other hand, empowers its users. And convenient electronic payments doesn't in anyway empower users? Also, if people are unbanked and below the poverty line I would expect they would be more concerned with getting by than "Orwellian levels of surveillance."

If people are below the poverty line then extra fees associated with transaction-handling, cost of technology for access etc are a big deal. Cash is closer to free to use. If you buy something used, a PC, fridge, whatever, because you can't afford new, do you want a transaction fee in addition? It may only be 1% or $1 (not accounting for the price of a smart phone and network costs) but that is still $1 more than you needed with cash.

Re: Why we should fear a cashless world

#19

Post by stan_rogers »

mirimir wrote: post #11
adrianN wrote: post #7

Earlier quoted context omitted.

Cash and current forms of electronic payment have the nice feature that the seller gets their money almost immediately. As I understand it, bitcoin transactions take a while to confirm. I wouldn't want to stick around in the shop until some miner got around to my transaction.

Small payments using BitPay require one confirmation, and that typically only takes a minute or so. Their fee (1%, I think) covers reversal risk.

Now imagine being lined up at the equivalent of a cash register with every single person in front of you taking "a minute or so" beyond what a transaction currently requires. Nobody's hiring additional cashiers (or whatever they'd call them) or self-checkout kiosk supervisors (to go along with the extra kiosks) if there isn't any extra money to be had.

Re: Why we should fear a cashless world

#20

Post by nmrm2 »

fennecfoxen wrote: post #14

> We already live in a world that is, as far as the > distribution of wealth is concerned, about as unequal > as it gets. It may even be as unequal as it’s ever been. Sure, if by "a world" you mean "a hyper-prosperous nation like the US or the UK"... and if by "unequal as it's ever been" you mean that third-world countries are taking our jobs and becoming much more prosperous, hitting our middle income brackets - the…

> If you really mean globally, then inequality is in fact falling.

No.

Inequality is decreasing between nations as the developing world catches up with the west. But inequality within nations -- even developing nations -- is increasing. It's possible for inequality to increase as the the developing world catches up to the west; in fact, that's exactly what's happening.

So the old geographical distributions are very slowly eroding, but they are being replaced by obscene levels of inequality within individual borders. This trend is exacerbated -- especially in Europe -- by tax evasion and avoidance managed (and practiced) by large fintech companies. So the author's fear that concentrating power in the hands of a few large fintech firms would exacerbate global inequality -- and lessen nation states' ability to combat inequality with policy -- is well-founded in global trends.

edit: Instead of downvoting, go read François Bourguignon's "Inequality and Globalization: How the Rich Get Richer as the Poor Catch Up", which states exactly the thesis outlined above and contains pointers to the data sets used to arrive at these conclusions.

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