1993-07-29 - Paranoia and the Outlawing of Cash

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From: tcmay@netcom.com (Timothy C. May)
To: cypherpunks@toad.com
Message Hash: 41bf2dfa93bf3759e84642b46c2d29cd2a184b9104951965c72697b1e9ca074f
Message ID: <9307290837.AA00242@netcom5.netcom.com>
Reply To: <Pine.3.05.9307290446.H23353-b100000@jupiter>
UTC Datetime: 1993-07-29 08:57:03 UTC
Raw Date: Thu, 29 Jul 93 01:57:03 PDT

Raw message

From: tcmay@netcom.com (Timothy C. May)
Date: Thu, 29 Jul 93 01:57:03 PDT
To: cypherpunks@toad.com
Subject: Paranoia and the Outlawing of Cash
In-Reply-To: <Pine.3.05.9307290446.H23353-b100000@jupiter>
Message-ID: <9307290837.AA00242@netcom5.netcom.com>
MIME-Version: 1.0
Content-Type: text/plain

Nick MacDonald writes:

> What are the odds that banking machines are actually tracking which bills
> they give you.  If the banks then later checked out where the money was
> coming from, they could do some very interesting demographics... and it
> would be a great way to help catch bank machine criminals...

This scheme would require cooperation/collusion by the stores that
accept the money, require that they scan the money right there at the
counter or at least segregate the cash for later scanning. I haven't
seen either capability.

More to the point, cash transactions almost never involve producing
ID, so how will the store know who you are, even if it (somehow) could
track the bills?

(Ah, the *video surveillance cameras* in so many stores! It suddenly
becomes clear! The ATM machines take your picture automatically--you
knew this, didn't you?--and send the images to Fort Meade for
correlation with the 7-11 camera pictures. This way they see who's
buying Twinkies and copies of "Illuminatus!" and can fnord trace their
movements.  Fnord.)

By the way, I *do* suspect electronic transactions will become much
more common, perhaps even mandatory, over the next decade. Social
security and welfare payments may be deposited electronically (to
prevent theft and fraud) and even "poor people" will then have credit
or debit cards. This eliminates the last practical argument for
allowing cash. There will be the usual objections, but the "War on
Drugs" and the war on the underground economy, money laundering, etc.,
will be cited as a more pressing concern than the "freedom" to use
cash. An insistence on using cash, when electronic transactions are
*so much more convenient* will be see at best as an eccentricity and
at worst as grounds for further investigation.

(Practically, cash probably cannot be simply outlawed. But stores may
be required to fill out additional forms for cash, including the ID of
the cash-paying customer. Merchants may charge a fee for cash
(reversing the current economics), and may even refuse cash
transactions above a certain value. If you doubt this can happen, look
at the trend of laws regarding cash transactions at banks, jewelry
stores, and car lots. The effect may be a phase trasition away from
cash in amounts greater than pocket change. I've already noticed
confusion on the faces of store clerks when I've paid for moderatelly
expensive items with folding money.)

We Cypherpunks need to ensure our plans for digital money are not
closed off by these sorts of moves. (I'm not sure what we need to do,
or can do, but it's worth thinking about.)

-Tim May

Timothy C. May         | Crypto Anarchy: encryption, digital money,  
tcmay@netcom.com       | anonymous networks, digital pseudonyms, zero
408-688-5409           | knowledge, reputations, information markets, 
W.A.S.T.E.: Aptos, CA  | black markets, collapse of governments.
Higher Power: 2^756839 | Public Key: PGP and MailSafe available.
Note: I put time and money into writing this posting. I hope you enjoy it.