Surviving the Cashless Cataclysm 463
MrSeb writes "There's been a lot of noise about Sweden becoming a cashless economy, and the potential repercussions that it might cause, most notably the (apparent) annihilation of privacy. Really, though, I think this is a load of hot air. Physical money might be on the way out, but that doesn't mean the end of anonymous, untraceable cash — it'll just become digital. If Bitcoin has taught us anything, it's possible to create an irreversible, cryptographic currency — but so far it has failed because it doesn't have sovereign backing. What if the US or UK (or any other country for that matter) issued digital cash? We would suddenly have an anonymous currency that can be kept on credit chips (or smartphones) and traded, just like paper money. No longer would handling money require expensive cash registers, safes, and secure collections; your smartphone could be your point of sale. It won't be easy to get governments to pass digital cash into law, though, not with big banks and megacorps lobbying for centralized, electronic, traceable currency. Here's hoping Sweden makes the right choice when the referendum to retire physical money finally rolls around."
Secure = Traceable (Score:4, Insightful)
If it's secure, it's traceable, otherwise you can duplicate it.
Re:Secure = Traceable (Score:5, Insightful)
Imagine giving your neighborhood dealer $200 digital cash for some drugs then the cops catch him with your money, traceable to you, on his iphone. Not good.
Re:Secure = Traceable (Score:5, Insightful)
Maybe its just me, but your logic of using an illegal situation to justify why a digital economy shouldn't exist seems like a bad argument.
Re:Secure = Traceable (Score:5, Insightful)
Until you realize that tons are things of illegal that shouldn't be.
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It's also worth pointing out that the only thing eliminating cash will do is change the consideration in an illegal contract.
People will start making their own gold coins. It does not matter what it is. If it has a relatively stable value and decent demand in a market it will be used for a transaction.
The only thing outlawing cash will do is control lawful transactions. Which make up the vast majority of transactions anyways.
Re:Secure = Traceable (Score:5, Insightful)
giving money to bradley manning defence fund
Re:Secure = Traceable (Score:4, Insightful)
Which isnt illegal at all, actually.
Care to try again?
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And yet funnily enough despite not being illegal, shortly after the cable leaks it became a lot harder to send money to WikiLeaks. And that's with Democrats in charge. Did you know that a leading house Rep wanted WikiLeaks and Assange added to the "Specially Designated Nationals" list? This is a government maintained blacklist of people and firms you're not allowed to trade with. It often contains entries consisting only of a name with no other identifying information. There is no appeals process. No explan
Re:Secure = Traceable (Score:5, Insightful)
Seriously? "If you are doing nothing wrong you have noting to hide"?
The power to investigate people is always abused. No exceptions. That is why there must be a balance, a limit to what the police are allowed to do, what the government is allowed to control and know.
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Some other examples of trade I might argue should be legal:
Prostitution, gambling, second-hand sales, some smuggling (importing movies and games), prostitution, some child pornography (manga), currency trading, copyright protected media, and prostitution.
Others might have more to add, such as:
Weapons, fuel (evading taxes), unlicensed taxis.
I personally wouldn't go for full anarchy in this area though. I feel that human trafficking, and government corruption really ought to be illegal (possibly also some po
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Prostitution, gambling, second-hand sales, some smuggling (importing movies and games), prostitution, some child pornography (manga), currency trading, copyright protected media, and prostitution.
I take it you like prostitution.
Re:Secure = Traceable (Score:5, Informative)
- Hiring a consenting prostitute
- Purchasing pornography over the internet that goes beyond contemporary community standards
- Purchasing alcohol of some types/quantities/purities that may not be lawful in your state or county.
- Purchasing unpasteurized dairy products
- Person-Person transactions that are not directly taxed. If you think it should be-- fuck you, my 14 year old kid should be able to mow the neighbor's lawn without the IRS getting a cut. And I should be able to pay an allowance the same.
- Purchasing anything that I want to remain private -- legality aside. Prepaid cellphones/sims and other 'cash only' items people value for whatever reason...
- Certain 'holistic' medical practices. My body. My choice. My right.
- Bitcoin is arguably illegal in the US, as are other competing currencies.
Should I keep going with other more sensitive things?
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Actually bitcoin is not illegal in the US ...
Re:Secure = Traceable (Score:4, Insightful)
Just because the dollar is the only legal tender doesn't make it illegal for people to use tokens and casino chips.
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Which is why we arrest people for carrying around stacks of Euros and Australian Dollars.
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There are many alternate currencies in the US. The government has never had a single problem with any of them.
http://en.wikipedia.org/wiki/Ithaca_Hours
http://en.wikipedia.org/wiki/List_of_community_currencies_in_the_United_States
Re:Secure = Traceable (Score:5, Insightful)
- Person-Person transactions that are not directly taxed. If you think it should be-- fuck you, my 14 year old kid should be able to mow the neighbor's lawn without the IRS getting a cut.
I disagree, actually. If he's making enough for it to be taxable, then there's no distinction between him and a 19 year old doing the same amount of work. It's not that I think 14 year olds should be tapped for taxes, just that there's no real justification for setting an age limit. What about a 12 year old who runs a highly profitable online store?
And I should be able to pay an allowance the same.
You can, within the limits of the gift tax laws.
- Purchasing anything that I want to remain private -- legality aside.
Yes.
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I've been paying taxes since I was twelve, when I got my first regular job. Over 30 years now.
Re:Secure = Traceable (Score:4, Interesting)
Making arbitrary exceptions to the law is one of the reasons many Americans hate income taxes. If you don't keep up with every tiny thing you did for the past year, you could pay more tax than you owe.
We should make strides to make laws more consistent and to reduce exceptions, wherever possible.
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Re:Secure = Traceable (Score:4, Funny)
Buying politicians - wait, that's the other way around.
Re:Secure = Traceable (Score:5, Informative)
I can give a good example of something that actually IS legal yet is interfered with because the govt dont like it. Wikileaks.
Wikileaks remains within the first ammendment (And should Assange be charged, any competent judge will throw it out based on the Elesburg precedent) yet because its extremely difficult to make real-world payments due to the internet nature of it, their ability to tell samizdat news has been wrecked by interference from governments and their bank lackeys.
If cash payments become impossible everywhere you can expect that to extend to other things where govts dont like it, particularly political parties with agendas unpopular with government, such as socialists , anarchists and stateless capitalists, or groups such as sea-shephard etc that strongly agitate governments.
Finally there are legal products that one might want off the record, such as sex products or in the US firearms.
Privacy is important dude, and there really is no such thing as anonymous online currenct. Even bitcoin (aka "comedy currency") isnt anonymous, in fact the oposite, once you know someones block address you can easily trace their transactions just by examining the record of the block-chain.
Re:Secure = Traceable (Score:4, Informative)
That's not really accurate. You might want to do more research before writing Bitcoin off as a comedy currency. Users of the system don't have just one address, the software will constantly create new addresses for you automatically. The standard way to use it is one address per transaction.
There are a variety of interesting theoretical attacks on Bitcoins privacy using graph analysis, etc, but so far theoretical is all they are - I don't know of any examples of somebodies identity being discovered from the block chain. This is despite several large thefts that would have strongly incentivized people with the right technical knowledge to try.
There are real and interesting issues with things like Bitcoin around the balance between the need to enforce the law and the need for privacy from overbearing/abusive governments, the need for efficient tax collection, etc. They are topics that are being explored by the research community. But simply writing it off as non-workable isn't a good idea.
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But---you use the apostrophe to form the plural, so you're still in. Congrats.
Moving past artifcial scarcity (Score:4, Insightful)
:-) We should think deeply about how to move past have artificial scarcity (including fiat currencies) at the heart of a 21st century abundance-oriented economy. We can do that in part by improving our gift economy (Linux, Wikipedia, Thingiverse, blogging), by improving our subsistence economy (home robotics, 3D printers, solar panels, maybe LENR), by improving our planning (like by using emails and twitters to organize the economy by creating and monitoring demand and feedback), and, if we do have a currency, by having a basic income to go with it, as well as LETS-like local currency systems. It would also help to rethink the nature of most "work" so it is more inherently fun and inherently meaningful:
http://www.whywork.org/rethinking/whywork/abolition.html [whywork.org]
http://web.archive.org/web/20110425153540/http://www.smallisbeautiful.org/buddhist_economics/english.html [archive.org]
As a rule of thumb, if there are laws relating to something about "counterfeiting" or "unauthorized sharing", you are dealing with a system based around "artificial scarcity". We should be able to do better in the 21st century.
http://www.youtube.com/results?search_query=star+trek+money [youtube.com]
Re:Moving past artifcial scarcity (Score:4, Insightful)
We should think deeply about how to move past have artificial scarcity
The economy will never be "post-scacity", as there's only so much shoreline property. There will always be desireable stuff that is scarce, and there will always be stuff that is desireable it's scarce - even if it's just the concert T-shirt that shows you listened to that band before it was cool.
including fiat currencies
In practice, the currency in use is simply the most-easily-exchanged commodity. Fiat currencies emerged because, as economies grew, you simply couldn't find enough notes to do business. BitCoins have a very interesting solution to this problem: they are quite limited in quantity, but you can exchange arbitrarily small fractions of one. That might actually work.
It has also been pointed out that a gold-backed currency could work in a modern economy with fractional-reserve lending, as the limited amount of gold (and therefore notes) wouldn't matter very much. I agree, but then what problem are you solving?
As a rule of thumb, if there are laws relating to something about "counterfeiting" or "unauthorized sharing", you are dealing with a system based around "artificial scarcity". We should be able to do better in the 21st century.
The American money supply is based on a zero-reserve banking system. Yup, except for demand accounts, banks can lnd out all that they take in. That means the money supply is theorectically infinite, and practically limited only by "friction" - the time it takes for money to circulate. US Dollars really aren't based around "artificial scarcity" any more. What could possibly go wrong?
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The American money supply is based on a zero-reserve banking system.
No it isn't.
http://en.wikipedia.org/wiki/Reserve_requirement#United_States [wikipedia.org]
http://www.federalreserve.gov/monetarypolicy/reservereq.htm [federalreserve.gov]
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Read closer. The only reserve requirements are on:
Total transaction accounts consists of demand deposits, automatic transfer service (ATS) accounts, NOW accounts, share draft accounts, telephone or preauthorized transfer accounts, ineligible bankers acceptances, and obligations issued by affiliates maturing in seven days or less.
I called this category "demand accounts" for simplicty. Basically checking accounts, plus a lot of weird internal stuff. No reserve requirements on CDs, most savings accounts, and so on.
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We should think deeply about how to move past have artificial scarcity
The economy will never be "post-scacity", as there's only so much shoreline property. There will always be desireable stuff that is scarce
Both statements are true... we are starting to share some things for trivial cost, like long distance communication, you used to get effective ~10Kbaud for $20/hour, now you get 5MB/s for $30/month - and this has led to "free" encyclopedias and other very valuable things.
I hope to see a world where this kind of cost reduction can extend to things like staple foods, long distance transportation, etc. "Free" energy will be the key to that, the way that a fiber-optic infrastructure was the key to "free" excha
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"The economy will never be "post-scacity", as there's only so much shoreline property. "
See: http://en.wikipedia.org/wiki/Space_habitat [wikipedia.org]
However, that is not to completely disagree with your point. It is true that abundances of one thing can sometimes create a complementary scarcity of something else (too much information chasing too little attention). But *material* scarcity is over if we want it -- just like war:
http://imaginepeace.com/warisover/ [imaginepeace.com]
http://www.youtube.com/watch?v=CbKsgaXQy2k [youtube.com]
"Fiat currencies eme
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However, there is a huge qualitative difference between an economy where food and other basic necessities are scarce, and an economy where collectible t-shirts are scarce: in the former you either be a cog in the
Re:Moving past artifcial scarcity (Score:5, Interesting)
I don't think that's necessarily so. Some things have real scarcity, such as bushels of wheat or energy. There really is only so much, and its limits are quite natural.
Suppose you and I trade; I'll give you a bushel of wheat in exchange for 100 KiloWatt Hours of energy from your solar generator. So far, this is all on the up'n'up, nothing corrupt or artificially scarce going on, right?
Unfortunately, I do hundreds of trades like this per day, and we don't really have a cable from your generator to my energy-sucking appliances, and you don't really want to eat that unmilled wheat as-is; you were just going to have me drop-ship it at the miller, along with all the other wheat I've bartered. (Yay, I only have to drive my trucks over there once per day/week/month instead of for every trade.)
Tell you what, here's a chit that represents your bushel. Maybe it's a physical coin, or maybe it's some cryptographic blob. You're ok with that, right? Of course you are, because this is actually a good idea which improves both of our efficiencies, reduces transportation overhead, and so on. It's a good thing. There's still no corruption or artificial scarcity happening. And I also know you're on board with the idea because you gave me something similar to represent my shiny new 100 KWH.
We still have to worry about and try to prevent counterfeiting. If I drop off 100 bushels of wheat at the miller and 200 people show up with my chit to collect flour, that's a legitimate problem. Crud, we can't use chits? Let's try to think up ways we can both have chits and not introduce any unwanted side-effects, like counterfeiting or big brother. It's worth the effort, assuming it's possible (and I'm not sure it is).
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by improving our subsistence economy (home robotics, 3D printers, solar panels, maybe LENR)
All require raw materials, none of which are "inherently fun" to obtain, especially not when it comes to obtaining useful quantities.
As a rule of thumb, if there are laws relating to something about "counterfeiting" or "unauthorized sharing", you are dealing with a system based around "artificial scarcity"
Money is used in exchange for labor. Labor takes up a person's time. A person's time is finite. One has only to look through the local obituary to realize that the scarcity is quite genuine.
We should be able to do better in the 21st century.
The 21st-century computer you composed this on is only possible because of people supplying raw materials and manufacturing in 19th-century conditions.
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Preloaded disposable visa.
All this will do is create a thriving money laundering economy. People will buy and fill disposable visa cards, then give those out like cash.
and how are you going to buy one? (Score:2)
1. card creation center makes card .... pays cashier with what? there is no cash anymore.
2. retailer stocks card on shelves
3. user picks card of shelf
4. user pays cashier
5.
6. user pays cashier with electronic device, which is tracable
7. user takes 'cash card' and gives it to drug dealer
8. drug dealer passes it through 'laundering chain'
9. organized crime underground 'prepaid visa card' center collects cards and launders money
10. oops, its all tracable to the original retailer.
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Barter! Just buy something for the seller. And if barter's too clumsy, then, um... use little bits of paper with "IOU" written on them?
Actually, you're missing something. The user doesn't need to pay the cashier. The user could pay someone else to buy the card at a small premium. As long as there are enough purchasing brokers and enough users, the user would be anonymous.
Re:and how are you going to buy one? (Score:4, Insightful)
The user could pay someone else to buy the card at a small premium.
So when the drug dealer's money is confiscated and traced back to someone, it will be someone who you paid to buy it for you, and since there is no physical money anymore, that person will be able to provide your info to the cops. Or he'll go to jail.
Care to debate which option your local prepaid VISA card reseller who doesn't want to go to jail and doesn't give a damn about you will pick?
It doesn't matter who you buy the card from, they'll have your information because you can't pay them untracably. Even if you could barter all the money you need with them, they'll have your info.
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This discounts international transactions, which was meant to be implied.
Eg, you make a nice little vacation trip to belize, use a bank to get local hard currency, buy an epic shitton of preloaded 200$ visa cards.
Upon return home, you sell them for "favors".
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It would require a professional code of conduct to protect clients' anonymity, but it's not inconceivable.
How many professional codes of conduct survive a US federal marshall knocking on the door, backed up by an extension to the Patriot Act? It won't even take something as radical as the Patriot Act to get laws that require "money sellers" to release records with a subpeona.
If enough people are concerned about privacy, there may very well be, realistically, too many clients for a given broker to remember.
They have these marvelous things today called "computers" that can keep track of stuff for billions of people to the exact penny. How many times can a "money seller" tell the marshalls "I forget" and get away with it? Especially when the
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This assumes records are even kept.
See for example this scenario:
100 initial launderers go to mexico with their real visa cards. (They don't have cash afterall.)
They go to the bank and get pesos, because they are smart tourists that know mexian vendors will gladly take 1$ USD, when the real cost is 1$ MX. They get epic shittons of folding pesos.
They use this money with a contact in mexico, who gives them well laundered bills, for a fee.
Using the laundered bills, they buy the initial preloaded visas for lar
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The broker has no incentive to keep records of their customers.
Knock knock "police search warrant" smash "on the floor keep your hands in sight". "This card says it was sold by you and it was found in the posession of a drug dealer. Who did you sell it to?"
"I dunno..."
"Pack up every computer in the place, we're taking them in to extract the sales records. Sorry about shutting your business down for the next six months, pal."
"I sold it to Samantha Wright...", and he knows that because you had to pay him with tracable electronic cash in the first place. Remember, cas
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I would just say it was stolen. If they are laundering it, then it won't matter.
OTOH, removing the convient way to get something illegal might start motivating people to change the law.
Re:and how are you going to buy one? (Score:5, Insightful)
If the cards change hands frequently enough, then the tracability of the card becomes as difficult as the tracability of the unique IDs on cash bills.
The reason that the ids of cash bills are essentially untraceable is because almost nobody currently tracks them.
The card data will be tracked by everyone, since everyone who touches it will need to process it as data and the computer will record it automatically. Unless you think people will just accept your word that "this card contains $25" and not run it through their scanner to verify the amount and validity, at which point the record is made.
The various denominations of card would never go through a card swipe machine, except to permanently denude it of its assets prior to its physical destruction.
Wow. So you really do think people will just accept your word that the cash card you hand them contains $25 just because you say so.
That 200$ card can have changed hands physically hundreds of times before then. This is the same problem as cash bills.
Cash bills are easily exchangable like that because there is some measure of trust that the bill is genuine and has not had its value stripped from it by an intermediate owner. There are also people with guns who deal with people who try to produce fake bills, and usually identifying a fake bill takes nothing more than really looking at it.
How do you deal with the person who "denudes" 100 cards that contain $1 and then transfers the contents of one $100 card to all 100 of the blanks? Or doesn't transfer anything to them. You've now got 101 cards that are valued at $100 because the guy who has them says they are $100 cards. He started with $200, he's now trading for $10,100. You can't tell just by looking, it's a piece of plastic with a magstripe on the back or a few gold contacts on the front.
Well, you deal with that by either "swiping" every card when it is used (which gives you tracability) or making cards that have strong visual authentication systems so no swiping, or even any electronic measure, is needed (and thus you have made a one-for-one replacement of "paper cash" with "plastic cash", copying all the problems of paper cash over into your "plastic" system.)
The only reason paper cash is untracable is because most people don't write the numbers down. If everyone has to write all the numbers down, and has to do it electronically because the numbers are only available via electronic means, then you've converted "paper cash" into just as tracable a system as this new "digital cash" will be.
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If it's secure, it's traceable, otherwise you can duplicate it.
Chaumian digital cash is anonymous in at least one direction; the buyer or seller can be anonymous, but probably not both.
So long as you have to deposit the cash back at the bank after every transaction, duplication isn't possible... the cash is either accepted or rejected during the transaction.
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Hard currency is secure because it's hard to duplicate, not because it's traceable. Everyone seems to ignore the fact that every cash note has a unique serial number on it, and the technology exists to scan and record each note and who it went to.
Of course, nobody goes to this effort because it's only useful if everyone's doing it, or it's centrally managed. But how do I know that the ATM is not recording each serial number against my card? A
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The only reason AC is anonymous on /. is because they choose to throw away your IP address after you've submitted your post, at least I think they do, otherwise, you're traceable.
Yes, IP addresses can be spoofed, but only because nobody cares if they are.
People will care if money transactions are spoofed. Maybe Bitcoin servers actually threw away their traceability information on the account creators, but I doubt a "real" government backed system ever would. You certainly can't open a bank account in the
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As a serial AC, I assure you that they do not throw away the IP address.
People don't understand how Bitcoin works. That's why there are so many myths about how traceable Bitcoin transactions are. There is no information about account creators because there are no accounts. Bitcoin uses secrets which users create. Suppose I want to give you money, then I sign an IOU to one of your "public" keys with the private key that is associated with some of my "bitcoins" and log that IOU publicly. How the latter works
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You can trivially trace the sequence of "bitcoin addresses" that a coin passed between. What is much harder is pinning those addresses down to real people. Anyone can generate a bitcoin address (it's basically just a keypair) and most clients are setup to encourage use of one
Debit Card = Cashless. (Score:3)
When I lived in he US, I rarely carried cash. I used a debit card for 90% of my purchases, including food purchases. I saw no point on carrying anything but a $20 on me for the random times a place I frequented didn't have a mag strip reader for my card.
Re:Debit Card = Cashless. (Score:4, Interesting)
Precisely this. Remember that "A does not necessarily equal B", in this case digital cash does not automatically mean an anonymous currency - all money these days is digital in actuality, as no major currency is backed by a gold or silver standard anymore - new money is created by issuing it to an account in a computer, and it suddenly exists because the computer network says it does. Central banks move money to regional, trading and public banks by transferring it electronically, not by moving huge piles of notes around. Only when you actually take some physical money out of an ATM does it stop being digital.
And it's all traceable.
Remember that BitCoin also had several PR failures recently because of its irreversible feature - BitCoins were stolen, but there is no way to cancel that transaction even tho you can see where the money went because there is no way to reverse the procedure. Sort of the worst of both worlds, semi traceable but totally useless at the same time. Both better than and worse than cash at the same time.
The UK tried this ahead of it's time... (Score:5, Interesting)
Back in the 1990's, I was working on payment machines when the Mondex Trial [wikipedia.org] started out in Swindon.
Essentially, this was just a smart card which you could load up with cash - if you lost your card, then you'd lost whatever cash was on it at the time.
At the time, I thought it was a useful idea, and it did take off to a certain extent for micropayments, particularly in newsagents, but as far as I recall, the trial fizzled out an died after a while. I do recall at one point the promoters were trying to hand out free Mondex cards loaded up with £5 but the general public just weren't ready for the concept 20 years ago.
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From what I remember, Mondex was not anonymous. I may be wrong as it was very hard to find technical details at the time, but I'm pretty sure that was the conclusion.
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I couldn't say for sure now as it was a long time ago, but it was the recollection of Mondex cards being handed out in the streets which made me think of it as an anonymous system, along with the emphasis placed on the value being stored in the card itself.
I certainly think it had it's advantages, whether anonymous or not - I don't generally carry cash with me, and get caught out anywhere that doesn't take cards (eg the coffee stall on client sites) or has a minimum transaction fee (my local newsagent). Obv
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Same here in Portugal in '94/95. Never really caught on, and they eventually killed the project in 2004.
Just trade goods and services (Score:2)
Folks in countries with high value-add or sales taxes revert to the dawn of civilization practice of just trading goods and services, with no monetary transaction. That way, there is no transaction to tax. Whether it is legal or not, is another matter. But a good way to avoid traceable digital transactions.
Money washers will be able to provide plenty of other tips.
Alternative currencies. (Score:4, Interesting)
For the criminals, the simplest alternative would be to use another convertible currency for your transactions.
Euros, US dollars, whatever; as long as all countries haven't joined in to the digital cash trend, evil doers can just ignore it
After that, what . . . barter?
Re:Alternative currencies. (Score:5, Informative)
There's a run right now in the US on "Tide" laundry detergent. It's being stolen and traded for drugs and cash. It sells "on the street" for about half what the store charges...
Goodbye (Score:2)
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Choice is good (Score:2)
>"Really, though, I think this is a load of hot air. Physical money might be on the way out, but that doesn't mean the end of anonymous, untraceable cash"
I don't really agree with that statement. Most every form of electronic payment can be traced in a variety of ways. And something as elaborate as what was proposed in the posting can certainly have all kinds of security and privacy implications because it usually has to be funded in some manner and will still leave trails.
I don't want to have to perfo
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The whole motivation of elimination of cash is not because it is good for citizens, it is because it is good for law enforcement or tax collection.
No, it's because it's good for control. Once all transactions are digital, anyone can be made a 'non-person' unable to buy or sell anything.
Imagine waking up one morning and finding that your 'payment card' had been disabled overnight.
Whoa? Really? (Score:2)
MrSeb is hopelessly out of touch with reality if he thinks any country will issue an anonymous digital payment system. Well maybe some tax-haven might, but not likely since they want access to the international banking system. Do you not read the news at all, let alone releases from the senate, treasury department or IRS??
How many minutes would it take ... (Score:2)
... for it to be hacked and broken, given that the entire criminal resources of the world, together with any hostile governments, would be in a race to see who could crack it first? The people at the Cambridge Computer Lab are also quite good at that sort of thing, but I wouldn't put any money on academics winning this race.
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If it's a system without auditable transactions, it's already broken, you just need to keep a copy of your "digitally signed money" and use it again. If you're truly anonymous, nobody can tell which copy of the money is "real."
If it's a traceable, auditable system like today's bank-wire transactions, you can break it, but they'll catch you as soon as they check the transaction, which I believe takes less than a second. The cryptography is just to keep the rabble out, the real security is in the accountin
Once again: DO. NOT. WANT. (Score:5, Insightful)
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What? (Score:5, Insightful)
You have that a bit backwards. It's not the megacorps lobbying for traceable currency, it's the government forcing the banks to have traceable currency so that they can monitor and shut down terrorists, drug cartels, tax frauds, etc. Hint: the term "money laundering" means moving money through transactions not traceable by the government. Plenty of banks and megacorps have in the past and continue to provide essentially untraceable transactions.
You're going to need to provide some evidence for the claim that bitcoins have failed because of a lack of sovereign entity backing them. There's a whole slew of other reasons that probably contribute far more to the poor adoption rate of bitcoins.
Why would any government endorse an untraceable digital currency scheme, when the whole point of the scheme is to circumvent the government's regulatory and investigatory powers?
Electronic Purse is Already Done (Score:2)
Let's back up for a minute:
#1 reason for a country to go to an electronic purse is to eliminate the tremendous costs of managing currency. Think about the logistics required to keep money in an economy. It's not just "oh, ship $10 million USD to Las Vegas so peoples can gamble or whatever." It's an ENORMOUS HASSLE. Electronic purses are very tantalizing way to be far more efficient as a currency provider.
Banks and nations have mostly gone to a banking standard with a smart card providing a great degr
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Bob wants to give Joe $10 for a cool Commodore 64 and there's no paper currency in the economy. So, Bob has his smart card and puts it into a dumb, untrusted reader. The reader device asks how much to transfer. Joe then sticks his card in and like magic $10 in value is added to Joe's card and Bob's is credited with no network connection. Can the transaction be fed back to some server? Depends on the electronic purse. Can you have a relatively anonymous system that works? Yes.
Can Bob hack his smart card to give the same $10 to Suzy for other good and valuable consideration? Yes. Will Bob and Suzy be pissed off at Bob when they find out that he has handed them copies of the same $10 "digital cash"? Of course. If Bob's real name is Steve and he's just skipped out to Mexico, do you feel like your "untraceable electronic cash" is very secure?
I don't.
Rooting your bank account (Score:2)
We would suddenly have an anonymous currency that can be kept on credit chips (or smartphones) and traded, just like paper money. No longer would handling money require expensive cash registers, safes, and secure collections; your smartphone could be your point of sale.
Anonymous currency stored on a perpetually networked device with a long list of known escalation exploits? What could possibly go wrong?
TFAs fantasy world (Score:5, Informative)
Bitcoin is not anonymous. Bitcoin transactions are necessarily public information.
You can't be anonymous (disconnected) while at the same time expect digital currency to remain globally consistant and secure. It's an oxymoron.
Even if it were possible it is unrealistic to assume a single government exists on the planet who would choose to implement such a system. Where is the value to the government in not being able to trace all transactions even if you ..wink wink nudge nudge don't know "who" owns what money at a point in time.
Re:TFAs fantasy world (Score:4, Informative)
Bitcoin is fully anonymous. I think you are confusing authenticated with anonymous.
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BitCoin didn't fail because of the lack of govt. (Score:2)
BitCoin didn't fail because of the lack of government backing. It failed because it's expansion curve was stupidly chosen, leading to an impossible amount of deflation required (thousands of %) for it become anything larger than a geeky toy. The necessary deflation led to hoarding, which in turn led to illiquidity, which in turn led to downright insane swings in value.
Maybe BitCoin 2.0 will learn those lessons. But I have my doubts.
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Personally, I took the EFF, of all places, returning all BitCoin donations as a bad sign.
And the current pathetic theoretical net value of the entire BitCoin currency ($30M) isn't exactly encouraging either.
TFS (Score:2)
What if the US or UK (or any other country for that matter) issued digital cash?
I think Greece is thanking you right now.
Ok, a few reasons why it's not really a good idea (Score:5, Insightful)
First, the obvious: How do you pay someone who doesn't have the means to register your payment? Private to private money deals will become virtually impossible unless both parties have some kind of electronic device on them permanently. And it may be unbelievable to some, but there are still people who refuse to carry a smart phone around. How do I lend my buddy 10 bucks if he has no means to receive them?
Then, the criminal. Untraceable, yeah, sure, tell someone who believes you. Criminals will not use it. Instead, they will keep the cash in circulation. And why shouldn't they? The very first thing I will do as soon as it becomes a fact that this goes through is to go to the bank and withdraw as much money as I can in the lowest possible bills available. Trust me, this money will become more and more valuable as time goes by, as it is used for back alley deals and as it gets out of circulation because of busts and people returning it to their account. ANY currency that you can only spend but not collect becomes more valuable over time, as long as there are people who give it value. And that stuff WILL be valuable, and if not, I can always still hand it back to the bank and deposit it. The alternative being, of course, that some foreign currency suddenly becomes the street bill. For reference, see Cuba. You want something aside of the state-approved crap? You better have greenbacks with you.
And finally, how about people who do not get a bank account? It's not like it's possible for them to have a halfway decent life now, but then, it will become virtually impossible. Try to get a job in Europe without a bank account. Just try. No such luck. There is NO way you will be paid in cash. No company I know of will ever even consider doing it. Now on the other hand, try to open an account if you're homeless. Try it. I dare you. How the heck do you think these people will ever get back on their feet? Because then your excuse "if he really wanted, he could" doesn't work anymore. He CANNOT anymore.
Re:Ok, a few reasons why it's not really a good id (Score:4, Informative)
And finally, how about people who do not get a bank account? It's not like it's possible for them to have a halfway decent life now, but then, it will become virtually impossible. Try to get a job in Europe without a bank account. Just try. No such luck. There is NO way you will be paid in cash. No company I know of will ever even consider doing it.
At least here in Norway there no such thing, through the post office you're always entitled to a bank of last resort. Ignoring that I've never been asked for my bank account number until after I've been employed, they may think I'm crazy but they'd still have to pay my salary - they will need my id number for tax reporting though. I would not get paid in cash but I would get a "payout referral" or something like that - I'm not sure how to translate it, it's not a cashier's check but more a wire-to-cash transfer you can collect at the bank. The money is reserved but the transaction is not done until the recipient collects at the bank. If the recipient doesn't collect in 3 months, it expires and the reservation is lifted and the money stays on the account. I used to work in the financial industry and occasionally customers would get payouts but have closed the bank account they were supposed to receive it on. We would then send out these things, most people would simply direct the money to the right account but they could also cash it without having any account at all. If they didn't collect we still had to keep them as client funds until someone asked for them.
What? (Score:3)
Bitcoin, last I checked, had not failed, and was still in use. Having used it in the past myself, I remember it being rather easy to get my money in and out. So... failed? So rising to $5/coin is failure? Or is it just because the $30 bubble burst?
Bitcoin is deeply flawed, but, as of one of just a handful of largish attempts at a non-soverign digital currency, I would say the lack of government backing is hardly a proven requirement, any more than a few early flight failures proved that flight was impossible.
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How is bitcoin deeply flawed?
It seems extremely well-designed and robust to me, much more so than traditional currencies. It also seems like an incredibly valuable hedge against sovereign-backed currencies face-planting because a country goes into the shitter or because the government instantiates money out of thin air.
Government-backed anonymous currency? (Score:2)
"Yeah, we're really unhappy with how traceable electronic cash is. By all means, let's issue a government-backed anonymous currency to ensure people once again can transfer money without us watching. We'll get right on that."
What would be the motivation? (Score:2)
What if the US or UK (or any other country for that matter) issued digital cash? We would suddenly have an anonymous currency that can be kept on credit chips (or smartphones) and traded, just like paper money.
The one and only question I have is what would be the motivation for the US or UK to create anonymous digital cash?
Digital currency is not a problem in itself (Score:2)
With correct legislation reasonable privacy can be preserved even with digital currency. Forbid banks from selling the data and require a warrant for the police to peep into it.
Was Heinlein right? (Score:4, Insightful)
I can't remember which Heinlein novel (maybe Time Enough for Love?) was set in a 'nearly' cashless society. Cash however, was still needed because, as was phrased, it was 'the oil needed for the wheels of commerce'. What Heinlein was implying was that the contribution of black and grey markets can't be ignored, and indeed without them, normal commerce wont work at all.
Easy! (Score:4, Funny)
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Maybe the Swiss. Imagine a global digital currency backed by gold.
Re:Why would banks be against it? (Score:4, Interesting)
Bank transactions rely on open audits between the trading partners... you can't just say "hey, some guy just gave me $5M", you have to be able to verify where it came from, otherwise "some guy" can give the same $5M to 5 different banks.
My computer (and yours) can make a perfect copy of any string of 0s and 1s.
So-called digital cash relies on either special, supposedly un-copyable by the masses, hardware, such as in today's paper money, or traceable transactions recorded by trusted servers, such as today's bank to bank wire transfers.
If the traceability is implemented by the government, you can be sure that it will be accessible for "matters of national security," just as today's banking transactions are. The only way to make a secure transaction untraceable is to give something un-copyable to the parties doing the trading.
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What all these "anonymous" banking systems lack is a method to catch a con man who gives you something that appears to be of value but turns out to be fake. If you really throw away the records of who gave you something you believed to be of value, you have no recourse when the fraud is exposed.
On the flip-side, if you trust that the records will be destroyed at a certain point in the future, you are equally gullible and likely to be identified when you least want to.
Modern trading systems based on identit
The way I do it (Score:3)
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The interesting question is whether, if the US stops printing dollars, the existing physical dollars would become less valuable (no more state backing) or more valuable (no more state printing).
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That depends: would they still be legal tender?
Re:Traceable Currency and Censorship (Score:4, Insightful)
It sounds more like Revelations 13:17
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an invented medium of exchange
As opposed to dollars, which are mined from the Earth?
I think Bitcoin is irrelevant, but all currencies are invented, so that's hardly a problem.
Re:Bitcoin is a joke! (Score:4, Funny)
Give us a break about BitCoin and this non-sense that given the fact that it failed was to be blamed on not having sovereign backing. If it had no one would have used it as the only ones using it are criminals. Yes, criminals. Most are trying either to avoid paying taxes.
Back in the 60s, there was also a lot of noise about "we need a currency the government can't destroy by printing endless amounts", because we had recently officially left the gold standard (we had unofficially left it under FDR when he outlawed private ownership of gold). Being the 60s, one often-discussed proposal was the use of hemp-backed currency. A note might be backed by 20 pounds of hemp (and be printed on hemp paper, of course). But that was mostly hippies discussing this, and so it went nowhere.
From what little I've read, to the extent BitCoins are in use, it's as an underground currency, mostly to buy illegal drugs (I'm a bit skeptical, but it could be so). So perhaps we've come full circle to a new hemp-backed currency? I kind of hope so, just for the humor value.
Re:Bitcoin is a joke! (Score:5, Insightful)
Failed at what exactly? Neither you nor the article define exactly what it is that it has failed at.
Linux is only 1-2% of desktops after 20 years... is that a failure? Scale isn;t great but look how many linux users there were after 3 years ... https://linuxcounter.net/charts/_stats_number_users_40years.png?1332412189 [linuxcounter.net]
Sure bitcoin is still niche, revolutionary change doesn't happen overnight. Price discovery takes a while and often overshoots. Same with equities, and even indexes. That's all speculation driven. Beneath that there is an economy of sorts - it's small, tiny but thats how things starts.
If/when it gets outlawed, then I think we can start talking about failure. Thought technically it never failed - if anything, outlawing it suggests it was threatening to be a success.
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Give us a break about BitCoin and this non-sense that given the fact that it failed was to be blamed on not having sovereign backing. If it had no one would have used it as the only ones using it are criminals. Yes, criminals. Most are trying either to avoid paying taxes.
To be fair it wasn't just criminals. It was people hoarding bitcoins thinking it was an investment opportunity, egged on by early adopters boosting the unsustainable inflation so they could exit with as much real money as possible. It was more like some kind of hivemind ponzi or pyramid scheme where early adopters were cashing out on the proceeds of the later investors. Throw a few big thefts, some major exchange hacks and security scares and the whole lot collapsed and really hasn't recovered. Even in the
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That's a lot of wild ass speculation that overlooks in real world facts.
But then again you're an idiot.