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."
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: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...
Re:TFAs fantasy world (Score:4, Informative)
Bitcoin is fully anonymous. I think you are confusing authenticated with anonymous.
Re:Secure = Traceable (Score:3, Informative)
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 is interesting in itself but irrelevant to the traceability. At that point the value of an amount of bitcoins is forever spent, and at the same time recreated with new cryptographic keys, namely yours (and new ones of mine if I got change). Then you can sign the value over to some other key, because you're now in possession of the private key associated with that value, because you created that key. None of those keys need to be publicly associated with a person, an account or anything but the bitcoin value. This doesn't mean Bitcoin is untraceable, but you have to do more than "convince" some server operator to keep logs.
Bitcoin's lack of immediate success is mostly due to the early adopters problem: A very large percentage of the total amount of possible "Bitcoins" is in the hands of relatively few people who got them very easily. Due to the way Bitcoin is constructed, their value will only go up if the system succeeds, and this means the early adopters don't spend their wealth. Typical deflation problem. It has also resulted in quite a number of copycat systems. Bitcoin will never get official endorsement for many reasons, but if it did, it would certainly only come after a restart in favor of that endorsing country or organization.
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?
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.
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.