I don't understand your point.
My grandfather tries to use only cash which allow 'payments to be sent directly from one party to another without going through a financial institution'.
And which cops have a nasty tendency to seize on sight in the US if seen in any significant quantity (outside of an armored car) because ‘proceeds of crime’?
And pretty much every drug transaction, illegal sexual transaction, whatever is done in cash? To the point most major crime shows and drama shows have scenes involving some massive pile or duffel bags or whatever of cash as a plot point?
Cash on the barrel head is the textbook definition of ‘difficult to regulate’.
Also, most people buying person to person used cars and doing yard sale transactions use it too, of course.
It’s not a requirement that Cash transactions involve a crime at all. Same with crypto.
If your transaction is illegal though, using Venmo seems pretty dumb.
But then there’s China, right?[0] And arguably India?[1]
I agree with your larger point, but I don’t think it’s “western” per se to dream of the surveillance state knowing our every spend.
[0]: https://www.nytimes.com/2020/10/27/technology/alipay-china.h...
[1]: https://en.wikipedia.org/wiki/2016_Indian_banknote_demonetis...
Thanks for the links!
And since it’s global, that third party could even be some foreign gov’t or entrepreneurial individual.
So there is always a middleman, unless you’re on your own chain. But it’s distributed, no one can reliably pick who is going to be the miner (or always be the miner) because of the POW algorithm, and everyone can trust the outcome because of the way everything is structured. There are very strong incentives for everyone to try to mine, for instance, and the more mining power there is, the more difficult it is for anyone to have a controlling interest or monopoly on mining, barring special economies of scale in mining hardware, anyway. (Which do exist, but not enough to make it doable to get a monopoly right now)
Worst case, the miners can ignore your particular transaction indefinitely, but the counterparty can see that too, and it would require active collusion from a very large percentage of miners to even attempt that.
So it’s not a middleman like a bank or a payment processor. Rather a bulk processor who moves a bunch of opaque chunks somewhere for money without any particular regard for who or what as long as they get paid for it.
Gold depositories have the same issues as crypto exchanges have typically had - it’s almost inevitable that someone absconds with the actual gold without telling anyone, or ‘prints’ extra without backing assets, etc. and until someone does an audit or everyone tries to withdraw their gold/tokens/whatever, no one knows.
It also enables a lot of other scams.
[https://www.cftc.gov/LearnAndProtect/AdvisoriesAndArticles/f...]
For anyone reading, educate yourself so you don’t get defrauded.
Not all depositories are a bad idea in all situations - but be cautious.
(Also, historical footnote - the last credible audit of the gold at Fort Knox was in 1974, hah - https://www.usmint.gov/learn/history/historical-documents/in...)
So, no, cash isn't entirely separated from financial institutions.
Cash transactions do not, so spending, receiving, and if one is crazy storage can be done without institutions.
That hypothetical $10k transaction for instance only sets alarm bells off if it’s an abnormal transaction for an individual account.
Someone doing a cash business is going to do stuff like that so much, it’s a drop in the bucket and no one cares. Coin shops, check cashing places, certain types of convenience stores and restaurants, etc.
If they manage the cash themselves instead of a cash drop, such as if they are a dispensary and are unbanked, a given dollar bill can circulate a very long time before touching a bank, depending on which parts of the economy it touches.
The reality is it isn’t super hard to launder funds apparently, so it ends up back in a bank somewhere soon, but with the intermediary transactions hidden.
Do you mean bank transfer?
Let’s say I buy a legal widget for $10K and I pay cash and I don’t plan to treat it as a business expense. On my side, I’m done, and any alarm that might be invoked is the problem of the seller, and probably dependent on their compliance with weakly enforced regulations.
For some classes of widget I might want a receipt, but definitely not for all. You can easily spend that much on a birthday dinner with your friends, if that’s your thing.
I don’t think anybody is arguing that cash is “entirely separated from financial institutions” but — even above $10K — it allows for the possibility (not the guarantee) of transaction privacy.
Devon Zuegel talks with EconTalk host Russ Roberts about the crazy world of money and finance in Argentina. When inflation is often high and unpredictable, people look for unusual ways to hold their savings. And when banks are unreliable because of public policy, people look for unusual ways to keep their savings safe and to make financial transactions. Welcome to Argentina, where Zuegel finds surprising applications of cryptocurrency for solving problems.
https://www.econtalk.org/devon-zuegel-on-inflation-argentina...