[Cryptography] Our leader opines on cryptocurrencies

John Levine johnl at iecc.com
Sun Jul 21 11:22:11 EDT 2019

In article <38829639-1C0F-44B2-87A8-D32FB8277565 at callas.org> you write:
>There's also a boatload of money sitting around internationally in $100 bills. I have no idea how much, but I'm sure it's huge on this scale, as
>well. If someone has numbers, please reply.

The Fed has a nice chart.  Historically, there were more $1 bills
(number of bills, not value) than anything else, followed by $20.  But
since 2017 there have been more $100 bills.  As of last year there were
13.4 billion $100 bills which are worth (mental arithmetic here) $1.34
trillion.  By general agreement, nearly all are outside the U.S., stuffed
into mattresses or used to make unreported payments.


The vast pile of unused dollar coins is another story.  No other
industrialized country issues paper notes worth as little as $1, and
tney replace notes with coins as values inflate.  The smallest note is
typically worth about $5.  Japan and Switzerland issue 1000Y and 10f
notes worth about $10 and use 500Y and 5f coins.

A US $1 note is worth 1/10 of what it was in 1950, and the vending
machine industry has long wanted smaller dollar coins that people
could uee in coin slots.  They were behind the Susan B Anthony $1 coin
which was sized so to make it easy to adapt vending machines.  People
thought it was too similar to a quarter so the mint invented the
Sacajawea dollar, turned it inside out so it was a different color
while still electrically the same to coin detectors, and removed the
ridges on the outside.  Then the Congress gave us the presidential $1
coins, four per year.  Through all this there was an assumption
(really a hope) that people would voluntarily use them, or Congress
would let the Fed stop printing $1 notes, neither of which happened,
so the presidential dollars piled up in warehouses.  The Congress
later relented somewhat and the rest of the presidentlal coins were
produced in small quantities, mostly for collectors.

The vending industry appears no longer to care.  Bill acceptors have
gotten a lot better, no doubt due to powerful microprocessors, and
many vending machines now let you tap a credit or debit card.  I like
dollar coins but people look at me funny when I use them.


PS: the vast oversupply of dollar coins led the mint to sell bags of
them mail order at face value, free shipping, charged to your credit
card, which led to arbitrage to collect credit card points.  Guys (it
was always guys) showed up at their banks with hand trucks of unopened
bags of coins to deposit.

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