Breaking Banks

Chapter 6Is Bitcoin the End of Cash?

For more than 2,000 years commerce has been conducted on the basis of cash, hard cold currency. Today, however, 90 percent of global transactions are done electronically, and while cash use is still strong in the retail environment, even there cash use is declining in many economies.

In this chapter I have some gems from renowned Wired contributing editor and author of The End of Money, David Wolman, American Banker journalist Marc Hochstein, and the current Executive Director of the Bitcoin foundation, Jon Matonis.

Is there a time in our future when physical cash will be just a memory?

BITCOIN IS “REAL”—DEAL WITH IT

For the last year or so I have been embroiled in an ongoing, if not interesting, debate in the blogosphere regarding the death of cash or, as some may classify it, the premature assassination of cash. While cash is in a slow decline in markets like the United States, Australia, and the United Kingdom, it is fairly clear that it won’t disappear in the next few years. However, longer term (think 20 to 30 years), the outlook is not as promising. As the modality of payments continues to shift, the likelihood that cash will remain a major player in day-to-day commerce is slim. The more interesting development is that what we think of as money itself might change.

It wasn’t until 1861 that the U.S. government started to print its own banknotes, preceded by the First Bank of the United States, which issued private currency starting ...