A Cashless, High-Value, Anonymous Currency: How? 400
jfruh writes "The cashless future is one of those concepts that always seems to be just around the corner, but never quite gets here. There's been a lot of hype around Sweden going almost cashless, but most transactions there use easily traceable credit and debit cards. Bitcoin offers anonymity, but isn't backed by any government and has seen high-profile hacks and collapses in value. Could an experiment called MintChip brewing in Canada finally take us to cashless nirvana?"
Gold (Score:5, Insightful)
Gold:
[x] Cashless
[x] High-Value
[x] Anonymous
Cashless == untraceable? (Score:3, Insightful)
There's been a lot of hype around Sweden going almost cashless, but most transactions there use easily traceable credit and debit cards
Since when does "cashless" mean "untraceable"?
Nobody really knows ... (Score:5, Insightful)
... what the best way will be, any anybody who professes omniscience on this is lying to you. We'll have to experiment to find the best solution.
If you're in the US, ask your legislators to support a short act [opencongress.org] to make such experiments legal. Right now, trying to figure this out is a good way to land in prison.
Why? (Score:5, Insightful)
Re:Gold (Score:5, Insightful)
Gold:
[x] Cashless
[x] High-Value
[x] Anonymous
[ ] Digital
Why government backing is needed: Tax payment (Score:3, Insightful)
Corrections (Score:5, Insightful)
"Bitcoin offers anonymity, but isn't backed by any government and has seen high-profile hacks and collapses in value."
"...isn't backed by any government..."
Sounds good to me. Certainly true anyway.
"...has seen high-profile hacks..."
Bitcoin hasn't been hacked, some Bitcoin websites have been hacked.
"...collapses in value."
There was certainly that big bubble, but other than that it's been fairly stable. Certainly for the last many months.
http://bitcoincharts.com/charts/mtgoxUSD#tgCzm1g10zm2g25 [bitcoincharts.com]
Not backed by a government... (Score:4, Insightful)
hm.. (Score:4, Insightful)
Unifying online and offline payments (Score:3, Insightful)
That anecdote illustrates the problem. On the one hand, we have a cheap, anonymous, private way to make payments (cash), but it requires us to have physical paper or coins in our pockets. On the other hand, we have electronic methods that require a connection to an online transaction processor, which results in higher transaction costs and poor privacy protections.
That is why digital cash -- the real kind, not the Bitcoin kind -- is so useful. It allows private, electronic payments to occur online or offline (in the sense of two smartphones performing a transaction over Bluetooth), with all the advantages of cash and all the advantages of the current electronic payment system.
Not going to happen (Score:5, Insightful)
With the currency troubles in Greece and Spain, a "cashless society" is much further off. One plan for Greece is to suddenly convert the bank account of everyone in Greece from euros to drachma, then immediately devalue the drachma. Since this is well known, everyone with any money is pulling it out of Greek banks.
Keeping money in "the cloud" means someone else controls it. For a good laugh, read the EULA of WePay [wepay.com], a wannabe PayPal competitor. Or those of Dwolla [dwolla.com], which is a pseudo financial institution run out of a hacker space in Iowa. The terms offered by most psuedo-banks in the "cloud" are awful.
Prepaid means no legal tender required (Score:5, Insightful)
Re:Not backed by a government... (Score:4, Insightful)
Better Question: (Score:4, Insightful)
Why?
If anonymity is that important to your transaction, cash is still the way to go. If digital anonymity is what you want, then you need an escrow holder that will take cash and convert it to some form of one-shot unique digital account without any personal information involved.
If you want digital, anonymity, and convenient, well good luck with that. The combination of the 3 just screams "counterfeit". Like the old saying goes, pick two.
Re:Gold (Score:1, Insightful)
what is currency (Score:5, Insightful)
It is an abstract representation of value that only has meaning in the context of a society.
It has no meaning or value in and of itself: can't do much with a sack of gold in the middle of the Sahara, unless you meet some tauregs, which brings us back to the point: whatever you agree is a medium of exchange has to derive meaning in terms of what other people think of as value.
Gold has ancient meaning, but ones and zeroes have to stand for something else: a sack of gold in a bank somewhere.
Which implies accountability, traceability, authority.
Without those things, no one in their right mind will accept your currency.
You have to know what currency actually means, and you can't design currency that defies those meanings, or what you have isn't really currency. Except amongst other idealistic clueless fanboys of alternacurrency, but this is a fringe group playing silly games, not actually making something that will replace real currency at large.
There is no trust in the parameters you have outlined. And with no trust, no trade.
Re:Gold (Score:4, Insightful)
Money that is deflationary encourages hoarding, which only worsens the deflationary trend. That is why currency needs to at least scale with a growing population.
Re:Gold (Score:4, Insightful)
The value of precious metals is static, it's the value of the fiat currency against which they are measured that changes.
Bullshit.
Precious metals are subject to the same forces of supply and demand as everything else in the world. That they are MORE STABLE than fiat currencies is not the same thing as them being static.
Re:Cashless == untraceable? (Score:4, Insightful)
There's been a lot of hype around Sweden going almost cashless, but most transactions there use easily traceable credit and debit cards
Since when does "cashless" mean "untraceable"?
It doesn't, and your quotation does not in any normal linguistic sense imply that it does. Effectively, it is a statement of the form: "Sweden tried a currency with property X, but it still lacks another desirable property Y." (If you're slow, X = "cashlessness," while Y = "anonymity.")
If you read the title to the bloody post at the top of the page, "A Cashless, High-Value, Anonymous Currency: How?" you might realize that this is a question about achieving currency with not one, nor two, but THREE distinct properties.
Sheesh. The fact that this has been modded insightful worries me.
Re:Bitcoin hacked? Um no (Score:1, Insightful)
If all you can learn about me is my public key. That's anonymous. I'm not my public key.
Worse (Score:3, Insightful)
Re:Bitcoin hacked? Um no (Score:5, Insightful)
Re:No (Score:4, Insightful)
It is a hack, although not one that might be as clever as you'd like. It's as much a hack as putting tape over a dollar bill, feeding it into a vending machine and ripping it back out. It is a hack that devalues the currency.
It's a TRAP (Score:5, Insightful)
Re:Gold pressed Latinum. (Score:5, Insightful)
What part of the last 10 years did you miss where judges have been letting the U.S. government literally get away with murder. They sure haven't been any kind of brake on stopping the government from spying on its citizens.
Judges aren't saints, they are political appointees and they aren't any more reliable or trustworthy than the politicians who appoint them. If you put them on 3, 5 or 9 judge panels they get a little more reliable but if you manage to pack a 9 person court with 5 corrupted or partisan judges, all voting together, you are still screwed.
You should have zero confidence in letting one judge control anything important.
Re:Watts (Score:2, Insightful)
It depends what you mean by Tangible. I assume you are talking about fiat currency here. But everything, even fiat currencies, have some tangibility. Don't be fooled by people who believe that a fiat currency will just collapse out of the blue for no reason, or because inflation might occur (the most typical reason stated).
There mere fact that we are using a fiat currency does not implicate a particular weakness verses other currencies. It does not necessarily make an economy more vulnerable to mismanagement. Strong currencies can create huge problems in mismanaged economies, too. Look at the Euro, for example, which until very recently was managed like a hard currency... a very strong currency for the last few decades. Now observe Ireland, Spain, Italy, Greece, and numerous other countries. Spain at 25% unemployment! Clearly the currency didn't prevent mismanagement within those governments, and the US has (so far) fared much better, so nobody should even remotely operate under the assumption that the fiat nature of the dollar is in any way responsible for our current predicament.
The dollar bill, or any fiat currency, is backed by the entire economy of the issuing nation. Literally. Why? Because nearly all goods and services within the issuing nation are traded using that currency. Because taxes are paid in that currency. Because use of that currency is far more convenient than other things. Because the government might have capital controls in place (Argentina, for example). Because a large chunk of short-term working capital is necessarily kept in that currency. Because it is convenient (think about the extra overhead a vendor would incur trying to use barter... what does he do with the 30 chickens he was just handed? How does he store that gold safely so it doesn't get stolen? How long will those eggs last before they go bad?).
As long as the above is true then the currency has value. Real value. It isn't fake. I can go out and buy a hot-chocolate from Starbucks right now, or a boat, or a house, using dollars. Real value.
People who assume that a fiat currency is worthless miss out on this basic fact, but more importantly people who try to contrast fiat currencies with other currencies within the developed nations also forget that ANYONE these days can have a brokerage account and invest in the domestic and/or world economy (investment in most large-cap domestic names these days is basically an investment in the world economy).
These investments have not been any more stable than fiat currencies. In fact, in the world today, HARD currencies are considerably less stable as well. The dollar is actually one of the more stable currencies (the Yen is probably the most stable of them all, at least up until now). Pick your poison. Anyone with a brokerage account can move their wealth out of the fiat currency system, but shouldn't expect the results to by any more stable.
Currencies remove some risks, but add others. People use currency (fiat or otherwise) as a vehicle for trade precisely BECAUSE currencies are very stable over the short-term. The period of time the transaction operates within the currency is typically short, and thus not subject to inflation.
The real problem with a fiat currency occurs when you try to use it store your hard-earned work-product over a LONG period of time. And here we aren't talking about people living pay-check-to-pay-check (for them the currency is ridiculously stable because they have no savings). Too many people these days believe that, somehow, magically, they should be granted the right to 'save' their money simply by keeping it in cash... keeping it as the fiat currency, effectively removed from the economy, verses investing it in the economy. That's ass-backwards.
Similarly when we look at a hard currency, or any currency which tends to appreciate in value even relative to average base commodities (bitcoin comes to mind)... those currencies encourage people to store their work product in the currenc