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."
privacy (Score:1, Interesting)
How do you hire a prostitute in Sweeden?... and you don't want that your wife knows about it.
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.
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: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.
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.
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).
Re: (Score:2, Interesting)
OK, here are some things that should be made legal:
- Buying something while in a in a no-sales-tax jurisdiction, taking it home, and NOT paying "use tax".
- Buying alcohol at age 18 (I'm old enough that I actually did that legally. Now get off my lawn).
But I think the point he was trying to make is that things will BECOME illegal if it is feasible to track everything.
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.