The US is starting to follow Europe down the 100% digital cash path – but does the mainstream media see Bitcoin as part of the solution?
3 Reasons for Ditching Cash
An article in this weekend’s New York Times gave the example of Sweetgreen, a chain of healthy-eating restaurants. After noting that cash transactions had declined to under 10% of totals and that airlines had long stopped using cash, management decided to go cash-free at a number of locations.
Less than 10 years ago, 40% of Sweetgreen customers used cash.
There are three main reasons for this. First is the growing number of payment options thanks to advances in technology, including chip-and-PIN cards, mobile devices and services like Apple Pay. Second, of course, is speed and convenience – neither customers nor businesses need to keep or handle cumbersome physical cash, and orders can be placed in advance.
Thirdly is the opportunities the technology presents for data-mining. With users’ personal identities and histories connected closely to any account that manages electronic cash, businesses can gather far more information about who their customers are and what their habits are.
Whether the latter reason is an advantage or disadvantage depends on your perspective. Straw polls of friends and family (outside the cryptocurrency space) usually reveal an indifference to physical cash, observation that it’s rarely used these days, and even a desire to see it disappear completely.
There are Downsides
The Times article does touch on the negative points of a 100% digital cash system: lack of purchase privacy, vulnerability to data theft, and exclusion of the unbanked (which even in the US is around 8%).
It also mentions that people are more likely to spend recklessly without tangible cash, though most merchants and governments would see that as a plus. Besides, that phenomenon has existed since the introduction of credit cards.
But No Mention of Bitcoin?
What’s odd about the article is the absence of any mention of Bitcoin, even in passing. This is unusual in a place like the New York City region, which probably has one of the densest concentrations of Bitcoin-accepting businesses in the world.
Bitcoin solves most if not all the negatives of bank-based digital cash: it’s more private, there’s no need for any business to keep your ID or personal details, and it can be used by anyone of any age.
As a system separate to the existing legacy banking-government-based one, Bitcoin also protects against inflationary monetary policies, spending restrictions based on industry, and even the threat of bad actors damaging financial infrastructure (as referenced in The Economist last week).
Not a First-World Problem
Bitcoin is still far from being the dominant electronic payment method of choice in New York City. And the libertarian and economic arguments for Bitcoin usually fall flat on the general public.
Perhaps, though, wealthy developed countries are not where Bitcoin takes off first. Their advanced technology and rate of penetration make them valuable testing grounds, but the real target market is elsewhere.
As such, mainstream media like the New York Times may still struggle to take Bitcoin seriously.
But physical cash isn’t confined to the kind of inner-urban developed world scenarios that reflect the experience of mainstream media reporters – it’s used everywhere, and by everyone.
Physical cash is used in places where trust in governments and financial systems is less prevalent, unbanked rates can be 70% or more, and local fiat currencies have failed multiple times in living memory.
Those places are also likely to turn their cash digital, but may opt for the most accessible and open. Which is better news for Bitcoin.
How often do you use physical cash? Is it an advantage for any merchant in 2016 to exclude it completely?