Why keep cash and not buy Bitcoin? Cash seems to be becoming fragile, obsolete and not-so-reliable. You can’t use it to purchase goods from online stores, can you?
Oh, really? Still, there is no omni-purpose alternative to paper money. The United States Mint produces a huge number of coins and banknotes each year. The average American still uses cash for dozens of daily payments and transactions, as if good old plastic cards, virtual currencies and cashless payment applications like Apple Pay never existed.
Cash has a number of advantages not enjoyed by its modern high-tech counterparts. Cash does not need power supply. Cash is anonymous – it’s invisible to taxation departments, law enforcement and hackers (and yes, the anonymity provided by cash also irritates marketing specialists and statistics departments). Some experts say paying in cash only can be a great way to control spending and stick to budget.
According to the analysis conducted by the Federal Reserve Bank of San Francisco, the average person pays in cash about 23 times per month. While the use of credit cards has doubled since 2000 and the number of debit card transactions has grown five times, cash is still more popular than plastic. Paper money is most often used for up to $25 payments, even by those claiming to mostly pay with debit or credit cards: 40 per cent of respondents aged 18-24 say they prefer to use cash for payments.
There is a certain amount of cash circulating outside banks – about 1.2 trillion dollars, mostly in 100 dollar bills. This is a 20% increase compared to 2011, and about $3836 per person if divided between all US citizens. Where this amount of cash is stored remains a mystery to economists and currency experts. When ordinary Americans were asked how much cash they have in their wallet or keep at home, the average answer was $40 and $100 correspondingly (2013 study by W.H. Taft University). As estimated by the University of Wisconsin-Madison economics professor Edgar L. Feige, only 25% (or even less) of the American currency is constantly abroad. So, where is the rest? The owners of legitimate companies and those not having a bank account really depend on cash. Some prefer to get their income in cash only and thus manage to keep it out of the tax authorities’ sight. The United States is estimated to lose $100+ billion every year in taxes on unreported income (rated at over $ 400 billion).
This all points to the fact that cash is still very comfortable to use in terms of anonymous payments.
Before drawing any conclusions, it would be worth for those seeking to ban Bitcoin for reasons like “money laundering”, “dangerous anonymity” etc. to compare the overall values of cryptocurrency and cash transactions. Buy Bitcoin and worry not about cash. It’s still strong. Very strong.