Let's make this simpler: If money disappeared, a lot of people would die. I don't care how long you make the transition period; even if it's a change spread across 20 years, without a database of resources and how many belong to each person (which is what money is), you aren't going to be able to coordinate people well enough to feed billions of people each day. How would the deletion of the database serve anyone?
By cash I meant "money" in general, since obviously digital money would be eliminated by lack of grid.
Your piece of papers covered by nothing have no value, if there is no power and everything need to be produced by hand and it's very scarce. I will rather trade my crops for something else valuable than for some piece of paper in unstable society without grid, since I think long term/infinite collapse of grid would basically mean collapse of (central) gov. After all what can gov do for me without grid and money. I can see only local gov surviving potentially because it's made by people close to you who can actually help each other with something meaningful instead just words or worthless pieces of papers.
I don't think cash would hold much value, there would be insane inflation due to hardly any value of cash and extreme demand after limited resources, cash introduction would be fine after maybe a year when people would get used to live without grid, but in first weeks/months it would lose all the value.
nope. No way the modern economy could function if you had to lug around pallets of cash all the time. Similar to the reasoning for going off the gold standard.
The problem, of course, is that when the money is just a number on a screen, it's very difficult to ensure that the humans running the database don't magically decide they have a bigger number than they aught to. This is an unsolved problem.
_Any_ database can be foundational, digital money if you get the enough people and their governments to agree that it is. The database part is not the hard part.
I think you've misunderstood what he's proposing. He's talking about getting rid of server processing of client data, such as spreadsheets, word processing documents, schedules, and so on. Things where the data is all yours.
Your bank balance is not your data. That's the bank's data. All you have is a cache of its recent value. If you want to set that cached value to a million dollars that is fine. The bank will still have the correct amount, and that is what determines how much money you actually have.
The ability to shutdown any persons the government doesn't like using any growing list of $Excuses is worrying.
Currency is a freedom to perform transaction and arguably a given right, it's existed since humans learnt trade.
Cash allows anyone to transact without a prerequisite or control. Two parties. Centralised digital currency will change it.
That worry doesn't even include the privacy concerns and as systems become centralised either through standards or legislation. It will be easy to track someones habits or location globally.
It's fascinating to think about how overall economy might be affected by simply adding a row to a database. Did that money actually become real when that row was created? If the money was withdrawn and spent, wouldn't it be real then?
Makes you wonder about the regulation of money in general.
Just throwing this out there because I’d like to hear the intelligent and reasoned answers from HN and get a discussion going:
Should we have a totally digital and cashless monetary system? It seems to me that the internet infrastructure as a whole is quite fragile, and a few well placed nuclear bombs could cut Internet access to a country, and therefore kill their transactional capability too. Would that make them more vulnerable?
(With most of the banking system computerised, have we past this threshold already?)
What did they do during World War II? I’m guessing cash was still common and this wasn’t an issue...
"Do you think the US government could cover every single cent if all the depositors wanted their money out now?
Not even physical cash, just a transfer to an overseas account. The money simply isn't there and the scales are enormous."
What do you mean by "money"? How can money "simply" not be available, when it's a matter of updating a row in a database? The issue is whether assets exist. Googling suggests the US contains assets worth $124 trillion; is that incredible to you?
And if we wanted to print $124 trillion of cash to represent all the assets, that would be silly, but just as doable as a wall on the Mexican border.
Good list, and I'd add something crazy sounding to the long list of potential nightmare problems with some kind of future centralized digital currency: forced spending through expiring money.
Keynesian economists that dominate a lot of official politics have a hard-on for viewing consumption as the root of all goodness and prosperity. In the midst of a future economic crisis with a central digital currency, it would be trivial for the politicians to start blaming a lack of spending for the problems and to force people to spend received money within X amount of time or it disappears from your digital wallet and thereby incentivize desired behavior. No real saving for the future possible: citizens would be turned into a cattle-like consumption class.
Except we don't need banks to store money now. We can use math and computer networks aka cryptocurrency.
Personally I think what's missing is a way to holistically track real world resources and consumption and tie them to digital money that can then be regulated in a fine grained way.
I think that is what is needed to change economics from a society of witch doctors into a technical and practical profession.
I think these sort of measures could be built into the algorithms behind the management of the currency. The entire infrastructure could be run by bots. Cyber security will need to be tight, though probably not initially.
As I understand it, this is about social justice, ie, leveling the playing field. Post-transition for GD would mean that all accounts are activated to receive basic income, and they would do so on an equal basis. Initially, the currency is seeded in communities that need BI the most, and then becomes contagious to the world at large.
Ultimately, the system also prevents hoarding of currency and incentivizes exchanges.
Very interesting perspective. Most people who live with bank money can't even imagine a world without it.
There is one thing a centralised digital currency makes far easier, though. It makes it easier to "print" new money and cream that off into bankers' pockets. Most of the richest people in the world are in finance.
I somewhat optimistically see two different vectors that could move independently:
- untraceability: it’s probably out of the window. I don’t know how much we still had, but with full digital money everywhere it’s dead and buried.
- practical privacy: could probably be saved. It’s hope more than anything, but just as we currently don’t have a social score system while technically all the pieces are in place, I think digital money would stay in the same status quo as long as we keep the same social values.
Basically, we already have safeguards against widespread abuse of our digital systems, otherwise we’d already be in the same social state as China, I don’t see any technical barrier to that. The question would be on wether we can preserve that going forward.
I don't think we'll agree, but I would respond with this in conclusion.
1) Even assuming they get all bank data (which can be assumed, but is uncertain) they don't get access to physical cash data, which might also be phased out in the event of a national digital currency.
2) Nothing about your comment addresses my concern about government power.
A bit offtopic, but I've been wondering - is it possible to destroy money in any way other than literally burning banknotes. With electronic money you can only transfer them between parties, so while you can give away all your money, the money still exists in the system - you can't call the bank and ask to have 100k deleted from your account. Am I missing something or is there no way for money to ever disappear from the banking system?
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