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IEEE Spectrum Digs Into the Future of Money
New submitter ArmageddonLord writes "Small, out-of-pocket cash exchanges are still the stuff of everyday life. In 2010, cash transactions in the United States totaled $1.2 trillion (not including extralegal ones, of course). There will come a day, however, when you'll be able to transfer funds just by holding your cellphone next to someone else's and hitting a few keys — and this is just one of the ways we'll wean ourselves off cash. In 'The Last Days of Cash,' a special report on the future of money, we describe the various ways that technology is transforming how we pay for stuff; how it's boosting security by linking our biometric selves with our accounts; and how it's helping us achieve, at least in theory, an ancient ideal — money that cannot be counterfeited."
An untraceable method of paying for things has disadvantages, yes, but also serious advantages in limiting the power of government to see and control everything we do...
Has any of those BitCoin thefts occured because of vulnerabilities in BitCoin itself or because of unsecure 3rd party services? I doubt you'd go and say real money is insecure if a single bank somewhere got hacked.
A lot of people are starting to pay in cash again simply to get out from under the oppressive thumb of the credit card cartel. It also helps with budgetary discipline, which is why guys like Dave Ramsey are preaching it to the people.
Taking guns away from the 99% gives the 1% 100% of the power.
Using a service-provider configured, jail-breakable device for financial transactions... Malware is already an issue on smart phones. Also, I guarantee that this "service" is not free. Everyone involved in the transaction is going to charge something. 3% to ATT or Verizon, 3% to the payer's bank, 3% to the recipient's bank, probably another 3% to some service provider/clearing house vendor, plus complete gov't visibility which means that all taxes are guaranteed to be charged. Yes, this may be simplified to the point where it's as easy as pulling $1.00 bill out of your pocket to buy your gum, but that $1.00 item is going to double in price to cover all the incidental charges. Call me a luddite, but I'm perfectly happy to stick with cash.
We often forget about the old lady factor...
Cash and checks are not going to go away any time soon. We're going to have to endure the rest of our lives with the old lady filling out the check in front of us. It's probably best to talk about half lives. It will take entire lifetimes for their use to stop and they will still be used. Or the government will phase them out and people will bitch.
So it's another article about bitcoin. Well I just wonder how this will turn out. So far it didn't die.
And I wonder if namecoin will come useful after IPv6 will be used widely. Heh, will IPv6 be used? We hope so. How would you DNS such a giant IP space? Maybe namecoin will come more handy that usual means...
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#\ @ ? Colonize Mars
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You're not going to wave your cellphone over a stripper.
You are if you're using four square to me mayor of that stripper ;-) The fun is finder her QR code.
You know the Barter System is still a good way to do some business and non taxable :) Example - A friend did his plumbers website for a small bathroom installation.
How cute! I mean, who *doesn't* want their every financial transaction tracked and analyzed by the government and a few thousand corporations trying to sell you something. And of course, technology is so reliable! I'd trust my every dollar to that bastion of security, the cell phone. I mean, who wouldn't!
Excuse me, I have to go mop up some of that sarcasm that's been dripping all over the floor from somewhere.
Please do not read this sig. Thank you.
A lot of people are starting to pay in cash again simply to get out from under the oppressive thumb of the credit card cartel.
But you still need to get under the oppressive thumb of the debit card cartel if you ever want to buy anything online as of the present.
Dave Ramsey
There are a few places where I disagree with his advice. For one thing, he advises never to go into debt on a car but instead to buy a beater car. The trouble with a beater is that it is likely to require so much costly repair that going into debt for a certified pre-owned car becomes worth it. For another, if one never goes into debt, then how is one supposed to afford a place to live? And if a mortgage is the only exception, how is one supposed to qualify for a mortgage with no recent credit history?
http://www.getrichslowly.org/blog/2008/09/23/research-reveals-credit-cards-encourage-spending/ Good information. I like the part where McDonalds customers started spending dramatically more when they started accepting CC's. People weren't getting hungrier, they were using plastic instead of cash. ...OH, and you aren't getting ahead when you try to take advantage of companies with "same as cash" deals either (this one is easily researched...understand that when you come in WITH CASH, you get discounts right up front because you can now barter a better deal).
They are legally required to report to the DEA because the IRS doesn't communicate that information to government agencies with two exceptions:
I am not following your logic here. What legitimate business does the DEA have in knowing who is spending large amounts of money?
OTOH, who carries brief cases of cash with them?
Someone who does not trust banks? That is a right that people have; I think it is silly, but why should the government demand that people participate in the banking system?
For example if you are a travelling street performer, they might talk to you the first time, make a note and then you'll be fine.
Except that it is not anyone's business, except perhaps the IRS, who might want the information to process an income tax payment. As noted above, the information is not being reported to the IRS, which is basically the only agency which has anything resembling a legitimate need for such information (actually, that is inaccurate; the IRS will receive a report if the amount is large enough, but the DEA reporting threshold is much lower).
Some behavior are suspicious fro a reason, so finding more information about what's going on is reasonable.
How dare you make a large cash transaction?! You are being reported to the paramilitary law enforcement/intelligence agency that makes and enforces drug laws!
Palm trees and 8
$10k is not a brief case of money. It is a couple small stacks of $100s.
The nature of a bank you see is to make their credit seem as good as cash. Spend it here, spend it there, spend it everywhere.
For example, you go to your bank and deposit $100. (It is legally a loan to the bank.)
The bank takes your $100 and notes in your account $100 of credit....
Did you see what just happened? The money supply increased. There is now $100 of cash which the bank can loan out and $100 worth of credit in your account to spend. The bank just created money out of thin air. Interestingly, not US dollars. This is just bank credit which represents dollars. By using credit to pay for things you are using a completely private money created by your bank.
This is why banks are heavily regulated compared to for example paypal, they manipulate the money supply. It's why they are orders of magnitude more dangerous than paypal no matter how much you may dislike them.
So. There are some regulations, banks have to retain a certain amount of money as reserve in case people ask for their money back. Around 10% in the US. In fact they could only loan out $90. Not what happens in reality mind you. They loan first and find reserves later in reality. You may note that this means they don't have your money in their vaults, they loaned it out. It also means that they can only ever pay back 10% of their depositors, in the event of a bank run 90% are going to lose out. It's why there are bank runs the first place, you have to be at the head of the queue to get any money back.
Now, the more people depend on credit rather than cash, the lower the reserve ratio can be pushed, and the higher the leverage can be pushed. In Europe, the reserve ratios are discretionary and in reality between 30 (3%) and 50:1 (2%). If nobody ever used cash, in theory the reserve could be 0 and the reserve ratio could be infinite... i.e. banks could create as much money as they wanted, they could leverage up as far as the eye can see.
This is the real reason for the constant push for credit cards, debit cards... Always trying to get rid of cash. Cash limits their ability to create money.
You would like to own a money tree? All a banker needs is a book of accounts and a pen. All this talk of counterfeiting is complete rubbish, banks already create far more credit money than there is cash. In fact orders of magnitude more. The UK: 30 times more. EU 50 times more. Only a tiny percentage of our money is cash by now.
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