Where's the smart money?

[Peter Fairbrother]

I don't know whether to smile, or call you an arsehole, you give few clues -
"economic growth"?.

I just hope that if your suggestion is taken up then all the bills that are
declared invalid belong to you, and thus not to me or anyone else.

:)

Even credit card invalidity is not thoroughly recognised these days - just
before Christmas I ordered a CD which was sent, even though I'd
inadvertantly gone over my limit and the payment authorisation was refused -
they wrote a note telling me so on the delivery invoice. A human being, not
a computer system.

People give cash notes to other people, who may or may not be retailers. If
it's not humanly recognisable without a terminal, it's likely to be refused.
I suppose they could do an introduction of new notes, like they did with the
Euro, but I can't see it working.

And after a few exchanges on the lines of "It won't pass the box" - "Give me
my change or I'll break your head" I suspect the retailer boxes would become
as likely to be sabotaged as the notes.

What about eg markets where there is no electricity, never mind connectivity
to check notes? R. Branson started there, for one.


Cash has it's place, but requiring electronic confirmation is exactly where
it isn't. We have credit cards for that. Cash needs to be authenticatable by
humans alone.

-- Peter Fairbrother


> Sampo Syreeni wrote:

> On Mon, 11 Feb 2002, Trei, Peter wrote:
> 
>> That's the scenario which is (semi) worrying. As the tagged bills wear,
>> some fraction of the RFID transponders will inevitably fail. When this
>> happens, is the bill declared invalid?
> 
> I see no reason why sufficiently reliable RFID notes (say an MTBF in
> average use of around 5; not technologically infeasible, yet around what
> current print-only notes can take at max) could not be handled this way.
> But if this is really such a problem, one would expect the issuer to be
> able to invest a fair amount of money per bill in circulation into
> verification methods in excess of what you'd typically see in a grocery
> store -- a reasonable MTBF and enough circulation through the issuer would
> lead to few notes getting into a bad shape to be passed this far up the
> chain. Thus, failed notes could be replaced at a cost not much higher than
> that incurred by routine check-ups, only with a greater delay.
> 
> Besides, there's a point in invalidating failed bills -- if this is not
> done, where's the incentive for people to keep the stock in shape? A
> monetary economy, by itself, *can* adapt to lost bills via deflation, and
> bills going invalid is something nobody really wants to experience.
> Also, it is likely that deflationary pressures arising out of economic
> growth will completely drown out any effects lost notes might have on the
> larger economy. The implication is, wear and tear of bills can be
> accurately analyzed by treating them as a slowly devaluing physical good,
> and the usual efficiency arguments apply.


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