This week, I was driving in my neighborhood when I spotted that most American of sights — a bunch of kids running a lemonade stand, waving signs and trying to flag down passing cars. In some ways, it seemed like a great business opportunity — the temperatures where I live have rarely dipped below the high 90s lately. And yet I didn’t stop — not because I don’t like lemonade (or kids), but because I simply don’t carry cash anymore, and I’m fairly sure the neighbor children weren’t taking credit cards.
This got me thinking about all the people and sectors of our economy that are still dependent on cash, and how they might be affected by our increasingly cashless society.
Cash is in decline
Whether anecdotally or based on solid data, I think most of us have a sense that cash is in decline. One study from last year suggests that cash is the preferred payment method of just 11 percent of U.S. consumers, with 75 percent preferring cards. In other markets such as China, cash is dying out even more quickly, with mobile payments increasingly eating into both its share and that of cards. Though my local dry cleaner in New Jersey was a rare (and suspicious) exception, I very rarely come across businesses that don’t take cards, to the extent that it now really takes me aback when it happens. For many of us these days, credit and debit cards — and to a lesser extent, mobile payments — are making cash largely irrelevant. I still have a huge jar of loose change I accumulated over many years, and which now mostly gets used for the occasional school lunch or visits from the tooth fairy, but not much else.
But not for everyone
However, assuming that this pattern holds for everyone would be a mistake. There are still big sectors of the economy and large groups of people that remain heavy users of cash and are heavily dependent on it, and as others move away from it, that’s increasingly going to cause them problems. Sadly, this likely applies most to some of the more vulnerable and marginalized parts of our society, who will be least in a position to make the changes necessary to keep up as the rest of society moves on.
When the storm turns out to be less severe than the warnings, there’s always a sigh of relief–and maybe a bit of over-confidence after the fact. If fans of the European Union felt better after populist Geert Wilders came up short in the Dutch elections in March, they also took heart from the absence of anti-E.U. firebrands among the leading contenders for this fall’s German elections. Then came May 7. The victory of Emmanuel Macron over Marine Le Pen in France’s presidential elections signaled that “the season of growth of populism has ended,” Antonio Tajani, president of the European Parliament, said on May 8.
Not so fast. Europeans will soon remember that elections are never the end of anything–they’re a beginning. And whether the issue is unelected Eurocrats’ forcing voters to abide by rules they don’t like or fears that borders are insecure, there are good reasons to doubt that the anti-E.U. fever has broken. France’s Macron now faces powerful opposition on both the far right and the far left. Hungary and Poland are becoming increasingly illiberal. Brexit negotiations are getting ugly. And resentment toward the E.U. is still rising throughout Europe.
In the U.S., President Donald Trump may be pushing what increasingly resembles a traditional Republican agenda, but polls show that his supporters are still eager for deeper disruption. Trump’s embrace of Turkey’s Recep Tayyip Erdogan, Egypt’s Abdul Fattah al-Sisi and the Philippines’ Rodrigo Duterte suggests a lasting affinity with aggressive strongmen. His chief adviser and nationalist muse, Stephen Bannon, may be under fire, but he’s still there. The Trump presidency has only just begun.
In short, nationalism is alive and well, partly because the problems that provoked it are still with us. Growing numbers of people in the world’s wealthiest countries still fear that globalization serves only elites who care nothing about nations and borders. Moderate politicians still offer few effective solutions.
[…] When we think about the decreasing importance of cash, if we do, it’s mostly in terms of convenience. It’s just easier to not carry cash; cash can get lost or stolen, and because it’s not tied to our identities, it’s hard to get back. It’s informal and off the information grid, representing only itself and saying nothing about its bearer (putting aside those stories about the vast amount of cash allegedly containing cocaine residue). It’s anonymous in ways that often make it inconvenient for we the consumers.
Conceived of that way—primarily as an inconvenient medium of information exchange—cash’s obsolescence seems an inevitability. But what will replace it? If history is any guide, the next stage in the evolution of money will be completely intangible, existing as ledger marks in digital databases around the world. Bitcoin notwithstanding, it will likely not be decentralized and transparent; it seems much more likely that governments and bankers will maintain their control of currency, creating an opaque system in which we will all be enmeshed, and from which the financiers will take their cut. Money will be tied to identity, its routes traced and monitored. It’ll be a surveillance dystopia, but not of the clumsy, grubby Phildickian variety. It’ll be an ultra-functional, shiny and minimalist nightmare, the kind where you’re not supposed to care how it works, as long as it works for you. Kind of like an iPhone.
That may sound cranky, but it’s worth stepping back for a second to consider how we’re persuaded about the color and contour the future will take. Cash has already begun to be replaced. That’s progress: all that is solid melts into air, software eats the world, cash becomes digits. The sense of inevitability is baked into much of our thinking about (and proselytizing for) new technology. The disrupters and the techno-utopians have a vested interest in presenting their just-over-the-horizon view not as a future, but as the future. The subtle but forceful underlying message goes something like, “A future of infinite convenience is bearing down on you; it is not to be interrogated, and you have no recourse but acquiescence.” Thus the arrival of particular systems—methods for allocating and distributing power—is presented as a law of nature, even a fait accompli.
[…] We already live in a world that is, as far as the distribution of wealth is concerned, about as unequal as it gets. It may even be as unequal as it’s ever been. My worry is that a cashless society may exacerbate inequality even further.
It will hand yet more power to the financial sector in that banks and related fintech companies will oversee all transactions. The crash of 2008 showed that, when push comes to shove, banks have already been exempted from the very effective regulation that is bankruptcy – one by which the rest of us must all operate. Do we want this sector to have yet more power and influence?
In a world without cash, every payment you make will be traceable. Do you want governments (which are not always benevolent), banks or payment processors to have potential access to that information? The power this would hand them is enormous and the potential scope for Orwellian levels of surveillance is terrifying.
Cash, on the other hand, empowers its users. It enables them to buy and sell, and store their wealth, without being dependent on anyone else. They can stay outside the financial system, if so desired.
- Bring On the Cashless Future
- After Cash: All Fun and Games Until Somebody Loses a Bank Account
- Crime, terrorism and tax evasion: why banks are waging war on cash
- EU finance ministers call for restrictions on €500 note over crime fears
- The end of cash? It might not be as soon as you think
- Killing off cash: Could new tech mean the end of money
- The truth about the death of cash
‘Tech-savvy Venezuelans looking to bypass dysfunctional economic controls are turning to the bitcoin virtual currency to obtain dollars, make Internet purchases — and launch a little subversion.
Two New York-based Venezuelan brothers hope this week to start trading on the first bitcoin exchange in the socialist-run country, which already has at least several hundred bitcoin enthusiasts.
Due to currency controls introduced by late president Hugo Chavez a decade ago, acquiring hard currency now means either requesting it from the state, which struggles to satisfy demand, or tapping a shadowy black market. Even small dollar transactions are out of the question for most Venezuelans.’
‘Abby Martin speaks with author and journalist, David Seaman, discussing the growing popularity of Bitcoin, as well as other in-the-news issues such as Gaza, and President Obama’s comments on America’s use of torture on terror suspects.’ (Breaking the Set)
- George Osborne hopes to turn Britain into bitcoin capital
- US Defense Dept. analyzing Bitcoin as potential terrorism threat
- French Senate: “Bitcoin offers multiple opportunities for the future”
- Feds Hijack Silk Road Case in Bid to Dismantle Internet Freedom
- New York Department of Financial Services proposed regulations
- Dutch Legal Service Given Authority to Confiscate Bitcoins
- ISIS Using Bitcoin to Finance Terrorism?
- Russia Plans to ban crypto currencies
- Retailers Who Take Bitcoin Love It
- Hacker makes $84k hijacking Bitcoin mining pool
- Bitcoin price crashes linked to web search surges
- Reserve Bank of Australia: Virtual currencies pose challenges
‘A new California law removes a ban on using currencies other than the U.S. dollar, which is intended to accommodate the growing use of alternative payment methods such as bitcoin. The law, signed by state Governor Jerry Brown on Saturday, is likely to boost confidence around bitcoin, as regulators and tax authorities worldwide examine how to handle the popular virtual currency. It repeals Section 107 of California’s Corporations Code, which prohibited companies or individuals from issuing money other than U.S. dollars, according to the bill, introduced by Assembly Member Roger Dickinson.’
Not content with being just a platform to host cat photos and status updates, Facebook is readying itself to provide financial services in the form of remittances and electronic money. The social network is only weeks away from obtaining regulatory approval in Ireland for a service that would allow its users to store money on Facebook and use it to pay and exchange money with others, according to several people involved in the process.
The authorisation from Ireland’s central bank to become an “e-money” institution would allow Facebook to issue units of stored monetary value that represent a claim against the company. This e-money would be valid throughout Europe via a process known as “passporting”. Facebook has also discussed potential partnerships with at least three London start-ups that offer international money transfer services online and via smartphones: TransferWise, Moni Technologies and Azimo, according to three people involved in the discussions.
Flying is the safest way to travel, statistically speaking, but you still have to actually make it onto the plane, and as a bizarre case involving a cryptocurrency demonstrates, sometimes that’s easier said than done.
“We saw Bitcoin in your bag,” Baker recalled, in a blog post, the agent saying. Bitcoin, being a virtual cryptocurrency, exhibits no physical properties whatsoever. They have no mass, volume, or density, and therefore wouldn’t even appear in a TSA body scanner.
Things have gone from bad to abysmal at Mt. Gox, long the largest and most popular Bitcoin exchange: Its CEO on Sunday resigned from the board of the Bitcoin Foundation; a day later the exchange deleted all of its tweets and went offline, displaying only a blank page, as an unverified document leaked that indicated it has been the victim of a debilitating theft, reports the AP. Mt. Gox initially suspended withdrawals earlier this month after discovering a bug in the Bitcoin software that hackers could exploit. Apparently hackers had been exploiting that bug, unnoticed, for two years, ultimately stealing 744,408 Bitcoins from the exchange, Wired reports, citing a leaked “crisis strategy draft plan” said to be created by Mt. Gox but not independently confirmed as authentic.
If the document is genuine, that’s a theft equivalent to about $350 million at yesterday’s prices and the largest Bitcoin theft ever, representing about 6% of the 12.4 million Bitcoins in circulation, reports the New York Times. Yesterday six major exchanges issued a joint statement meant to shore up confidence in the currency, writing, “As with any new industry, there are certain bad actors that need to be weeded out, and that is what we are seeing today.” CNBC reports the statement initially suggested Mt. Gox was insolvent, but that detail was later removed due to a lack of “verifiable evidence.”
The operators of two exchanges for the virtual currency Bitcoin have been arrested in the US.
The Department of Justice said Robert Faiella, known as BTCKing, and Charlie Shrem from BitInstant.com have both been charged with money laundering.
The authorities said the pair were engaged in a scheme to sell more than $1m (£603,000) in bitcoins to users of online drug marketplace the Silk Road.
The site was shut down last year and its alleged owner was arrested.
Lawyers for Kanye West have filed cease and desist papers to halt creation of the virtual currency Coinye West, The Hill has confirmed.
The Internet money, which became a sensation online in recent weeks, is modeled after the rapper’s name and bears a cartoon version of his likeness on its website.
For West and his lawyers, that amounts to trademark infringement and copyright violation, they alleged in a letter sent on Monday.
“The COINYE WEST mark is substantially similar to the KANYE WEST mark in sight, sound, meaning and commercial impression,” Brad Rose, a partner at the Pryor Cashman law firm, wrote in a letter obtained by The Wall Street Journal.
“Given Mr. West’s wide-ranging entrepreneurial accomplishments, consumers are likely to mistakenly believe that Mr. West is the source of your services or is, at the very least, affiliated with, or has sponsored or endorsed the cryptocurrency.”
Rose wants the Coinye West creators to abandon their effort and shut down the website and social media accounts associated with it. If they don’t, he threatens to “pursue all legal remedies against any business that accepts the purported COINYE WEST currency.”
The anonymous creators behind the currency seem to not have backed down.
Almost 80% of the Bitcoins received by Dread Pirate Roberts (DPR), the pseudonymous head of the Silk Road digital black market, may not have been seized by the FBI, according to new research by two Israeli computer scientists.
When the FBI seized the Bitcoin wealth of DPR, believed to be 29-year-old San Franciscan Ross Ulbricht, it published the address to which it moved the money. Now, Dorit Ron and Adi Shamir have examined the “blockchain”, the public record of every Bitcoin transaction ever made, and identified not only the accounts from which the FBI transferred the 144,000 Bitcoins (presently worth $115m) it seized from DPR, but also several other accounts which appeared to be under his control.
Around a third of the Bitcoins which entered the accounts the FBI seized were moved back out of those accounts prior to the seizure. Some will have been spent, on running Silk Road and paying DPR’s living expenses. But the researchers also believe that he had other accounts which the authorities have failed to access entirely.
For the months of May, June and September 2013, the DPR-run accounts received no income from the Silk Road itself. As the site operated on a commission model, taking around 7% of each sale, they conclude that the money for those months must be hidden elsewhere.
The value of a single bitcoin has surpassed $1,000 (£613) for the first time, according to Mt.Gox, one of the virtual currency’s major exchanges.
Bitcoin’s value has been rising rapidly since a US Senate committee hearing earlier this month.
Confidence grew after the committee described virtual currencies as a “legitimate financial service”.
The future of money has arrived, and it’s called Coin.
It looks like a credit card. It’s the size of a credit card. It swipes in credit card machines. But it holds the information of up to eight of your debit, credit, rewards, or gift cards. And you can switch between cards by simply pressing a button.
The new product, launched recently, promises to change the way consumers spend money in a secure and efficient way.
The key technology is a Bluetooth signal. To load information from your different cards, just swipe them on a card reader into your Apple or Android phone and take a picture of the card. If you’re too far from your card—like, say, you leave it at the restaurant—your phone gets a notification. And the Coin’s battery lasts up to two years.
So, what does it cost someone to fundamentally change the way they pay for dinner? $100. Pre-ordering has already started (at the reduced price of $50), and Coin will ship out next summer.
But this San Francisco company is just one of many start-ups across the country that are finding new ways of developing the future of retail.
Ben Bernanke has an almost $75,000 price on his head, placed there by anonymous malcontents online. He’s the biggest—but far from the only—target on Assassination Market, a “dark web” site that lets users nominate targets and contribute money to the cause using theoretically untraceable bitcoins. Kill a target and prove it—by naming the time of death beforehand via encoded message—and you can claim the reward. The site is the work of a self-proclaimed “crypto-anarchist” who goes by the alias Kuwabatake Sanjuro, and he gave an email interview to Andy Greenberg at Forbes.
Sanjuro’s goal is to “destroy all governments, everywhere,” by making public office too dangerous to hold. He says he was pushed into action by the Edward Snowden leaks. “After about a week of muttering ‘they must all die’ under my breath every time I opened a newspaper or turned on the television, I decided something had to be done,” he says. He sees the market as a way to bring the democratizing effect of capitalism to politics. “One bitcoin paid is one vote closer to a veto of whatever legislation you dislike.” (In the site’s FAQ, Sanjuro notes that targets can only be added for “good reason,” meaning that no, you cannot put out a hit on “Justin Bieber for making annoying music.”) Asked whether they were investigating Sanjuro and his site, the Secret Service and FBI declined to comment. The site can only be viewed on the encrypted Tor network, the Daily Dot pointed out last month.
The opportunities for Bitcoin in China are “boundless” as the Chinese, famous for their big saving, are now using the cryptocurrency to save and invest, according to the co-founder of country’s largest exchange.
“The main reason why Bitcoin has become big in China is because Chinese people are savers, and more people are seeing Bitcoin as a way to store and invest their money,” Linke Yang, vice president of BTC China, China’s largest Bitcoin exchange founded in 2011, told AFP at a conference in Singapore.
Famous for currency manipulation, investors wonder if the Chinese government will step in and restrict Bitcoin trading. The yuan is under strict government controls to keep economic risk low and control flow in and out of the borders.
Internet users are sending tiny donations with critical messages to what they believe is the FBI’s Bitcoin wallet. The wallet, which is worth US$3.3 million, is thought to contain digital funds seized from users of the online black market Silk Road.
Following the arrest of Ross William Ulbricht (alias “Dread Pirate Roberts”) and the shutdown of underground online marketplace Silk Road, which Ulbricht is suspected to have run, Reddit users discovered what they say is an FBI-linked public wallet containing more than 27,000 BTC (one Bitcoin is equal to $122 at the time of writing).
While it could not be verified who owns the wallet, which was created on October 2, a massive amount of transactions came after the statement in the indictment against Ulbricht, which says that federal agents are authorized to “seize any and all Bitcoins contained in wallet files residing on Silk Road servers.”
It was not long before Bitcoin users came up with a way to attract the web’s attention to the alleged FBI haul, using the site Blockchain.info to send tiny donations with publicly streamed messages to the account. The wallet has since been dubbed “Silkroad Seized Coins” on the Blockchain.info page.
The donations could be as small as .000001 BTC, but each one enabled users to post their opinions of the FBI’s closure of Silk Road – which, for the most part, were far from approving.
What will get you in the end is sloppy opsec. Short for operations security, it encompasses a sprawling list of disciplines, including keeping PCs free of malware, encrypting e-mail and other communications, and placing an impenetrable firewall between public and personal identities.
The latest high-profile criminal defendant to get a first-hand lesson in the perils of poor opsec is Ross William Ulbricht. The 29-year-old Texan was arrested on Tuesday on allegations he was the kingpin behind Silk Road, an online drug bazaar prosecutors said arranged more than $1 billion in sales of heroin and other illicit substances to hundreds of thousands of buyers. A 39-page complaint alleges that he was known as “Dread Pirate Roberts” in Silk Road forums. A FBI agent went on to say Ulbricht controlled every aspect of the site, including crucial server infrastructure and programming code that used the Tor anonymity service and Bitcoin digital currency to conceal the identities of operators, sellers, and buyers.
The government on Tuesday authorized establishment of a committee that will examine ways to eliminate cash from the Israeli economy – the better to prevent citizens from cheating on their taxes. The committee will be chaired by Harel Locker, director of the Prime Minister’s Office.
Cash is easily passed from individual to individual, and transactions using cash can take place without the tax man’s supervision. Not so electronic transactions; with modern computers, banks can keep tabs on how much people deposit into their accounts and how much they withdraw, while credit card companies have an up to the second record of how much people spend.
Members of the panel will include top staff from the Israel Police, the Tax Authority, the chairman of the Government Authority on Money Launderingand Terror, the Bank of Israel’s income and payments director, State Attorney’s office officials, and more.