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Cloudmoney: Cash, Cards, Crypto, and the War for Our Wallets – The Axiom Award-Winning Exposé of the Cashless Society and Financial Privacy
Axiom Award Gold Medalist for Business Commentary
The reach of Corporations into our lives via cards and apps has never been greater; many of us rarely use cash these days. But what we're told is a natural and inevitable move is actually the work of powerful interests. And the great battle of our time is the battle for ownership of the digital footprints that make up our lives.
In Cloudmoney, Brett Scott tells an urgent and revelatory story about how the fusion of Big Finance and Big Tech requires "cloudmoney"--digital money underpinned by the banking sector--to replace physical cash. He dives beneath the surface of the global financial system to uncover a long-established lobbying an alliance of partners waging a covert war on cash. He explains the technical, political, and cultural differences between our various forms of money and shows how the cash system has been under attack for decades, as banking and tech companies promote a cashless society under the banner of progress.
Cloudmoney takes us to the front lines of a war for our wallets that is also about our freedom, from marketing strategies against cash to the weaponization of COVID-19 to push fintech platforms, and from there to the rise of the cryptocurrency rebels and fringe groups pushing back. It asks the most pressing
Who benefits from a cashless society and who gets left behind?
Is the end of cash the end of true privacy?
And is our cloudmoney future closer than we think it is?
The reach of Corporations into our lives via cards and apps has never been greater; many of us rarely use cash these days. But what we're told is a natural and inevitable move is actually the work of powerful interests. And the great battle of our time is the battle for ownership of the digital footprints that make up our lives.
In Cloudmoney, Brett Scott tells an urgent and revelatory story about how the fusion of Big Finance and Big Tech requires "cloudmoney"--digital money underpinned by the banking sector--to replace physical cash. He dives beneath the surface of the global financial system to uncover a long-established lobbying an alliance of partners waging a covert war on cash. He explains the technical, political, and cultural differences between our various forms of money and shows how the cash system has been under attack for decades, as banking and tech companies promote a cashless society under the banner of progress.
Cloudmoney takes us to the front lines of a war for our wallets that is also about our freedom, from marketing strategies against cash to the weaponization of COVID-19 to push fintech platforms, and from there to the rise of the cryptocurrency rebels and fringe groups pushing back. It asks the most pressing
Who benefits from a cashless society and who gets left behind?
Is the end of cash the end of true privacy?
And is our cloudmoney future closer than we think it is?
297 pages, Kindle Edition
Published July 5, 2022
92 people are currently reading
2475 people want to read
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Displaying 1 - 30 of 67 reviews
August 12, 2022
A really good into book on digital money from a leftist perspective. For those who have little to no knowledge of fintech then it's a good place to start but I really found it lacking in a few areas.
What it did well was delineate the often overlooked boundary that exists between the conveniences of cashless and the jump to corporate ownership of the means of payment. He describes the core of capitalism as being corporations and the periphery as the workers, and because the core operates in digital money (e.g. digital transfers) they want to move workers to digital money.
"Financial corporations dream of a ‘cashless society’ in which even these tiniest of nodes in the capitalist market will be tethered to their accounts, inserting the banking sector into every pixel of the economic picture. To entrench itself fully in our lives, and stick to our bodies, corporate capitalism needs the money to be digital, and for the ground-level touchpoints to be replaced with standardised apps, hosted in smartphones that follow us wherever we go."
It is a stark reminder that when we use digital money we are not just using more convenient money but instead strengthening and relying on a network of bank and tech companies who are, among other things:
-Tracking our data and enclosing on us
-Dematerialize money into their own digital chips
-Are subject to failure and vulnerabilities
-Can exclude people & business from the financial system
-Pushing global gentrification of standardized corporate chains over traditional small business
-Private companies entrenching themselves as the owners of the financial rails of public money.
The book is filled with some interesting stories and analogies but some of them were off the mark and took away from the book. I also wish it had gotten more into things like the history of consumer finance regulation and digital finance regulation and the battle of governing money as it could be useful.
Rounded up to 4 stars even though it lacked depth in some areas. It was a bit reductive which was a tad frustrating, for example he casts Sweden’s cashless drive as the same as India and Modhi’s without any nuance. Living in Sweden and seeing the value of the Swish network for small merchants and citizens and seeing how others look to it as a model makes this part frustrating, and I would have loved a realistic look/critique. I really wanted to love this book and read it in my bookclub, but liked it and didn't love it. Perhaps it's just that I've read so much in this space and I'm too picky, but I also felt that his arguments were not as convincing to a mainstream audience. Ultimately, this is a really good book that refocuses attention on the fact that the players behind digital money are actively celebrated as a force for good but is still actively malicious and can, has, and will further encroach on our lives if we let them.
What it did well was delineate the often overlooked boundary that exists between the conveniences of cashless and the jump to corporate ownership of the means of payment. He describes the core of capitalism as being corporations and the periphery as the workers, and because the core operates in digital money (e.g. digital transfers) they want to move workers to digital money.
"Financial corporations dream of a ‘cashless society’ in which even these tiniest of nodes in the capitalist market will be tethered to their accounts, inserting the banking sector into every pixel of the economic picture. To entrench itself fully in our lives, and stick to our bodies, corporate capitalism needs the money to be digital, and for the ground-level touchpoints to be replaced with standardised apps, hosted in smartphones that follow us wherever we go."
It is a stark reminder that when we use digital money we are not just using more convenient money but instead strengthening and relying on a network of bank and tech companies who are, among other things:
-Tracking our data and enclosing on us
-Dematerialize money into their own digital chips
-Are subject to failure and vulnerabilities
-Can exclude people & business from the financial system
-Pushing global gentrification of standardized corporate chains over traditional small business
-Private companies entrenching themselves as the owners of the financial rails of public money.
The book is filled with some interesting stories and analogies but some of them were off the mark and took away from the book. I also wish it had gotten more into things like the history of consumer finance regulation and digital finance regulation and the battle of governing money as it could be useful.
Rounded up to 4 stars even though it lacked depth in some areas. It was a bit reductive which was a tad frustrating, for example he casts Sweden’s cashless drive as the same as India and Modhi’s without any nuance. Living in Sweden and seeing the value of the Swish network for small merchants and citizens and seeing how others look to it as a model makes this part frustrating, and I would have loved a realistic look/critique. I really wanted to love this book and read it in my bookclub, but liked it and didn't love it. Perhaps it's just that I've read so much in this space and I'm too picky, but I also felt that his arguments were not as convincing to a mainstream audience. Ultimately, this is a really good book that refocuses attention on the fact that the players behind digital money are actively celebrated as a force for good but is still actively malicious and can, has, and will further encroach on our lives if we let them.
February 10, 2022
Writing a proper blurb for this so no big review but: it's really very good if you want to understand what money is, how it works, why crypto ain't it and why tech companies want to enclose yours.
December 11, 2022
This is that conversation all of us need to have about credit cards, but for pretty much the entire monetary system. If something sounds too good to be true, it most likely is.
Essentially, this book breaks down the interests behind the slogans. Whether you agree with the author's own thoughts on them or not, we should all consider them when making our own choices.
In the process, Scott manages a very lucid - if brief - rundown of the various kinds of money in the world, how the greater monetary system works, and what the motivations behind them are. He also introduces a plethora of actors attempting to make said system work better for them, the costs and risks of this, and who ends up paying the price in the end.
The picture he paints is not a pretty one. It's straight up dystopian - or at least steadily heading that way according to the author. For someone who's already a bit distrustful of big banks, over-reaching corporations and/or governments, data-collection and data-profiteering and/or data-weaponization... well, this isn't the book to soothe your nerves.
And, finally, for someone who is disgusted by the Swedish money-, payment-, and banking systems (at least in terms of the phasing out of cash), there's plenty of fuel for your fire here. Trust me, the frequent mentions of Swedish practices in "Cloudmoney" are not exactly flattering. But they are disturbingly accurate.
All that said, the author does leave a lot of positive aspects of the systems he disapproves of out of this book. I'm guessing that is because of his own agenda, but I would have liked to see him at least give some of these a mention. But then, since I generally think he did a good job of keeping his own opinions out of the factual writing (albeit that the book includes a few clearly telegraphed personal opinions), this could just be a reflection of his assumption that we are already familiar with these. Because, bottom line, most of us probably are, and that's kinda the first problem.
Recommended!
Essentially, this book breaks down the interests behind the slogans. Whether you agree with the author's own thoughts on them or not, we should all consider them when making our own choices.
In the process, Scott manages a very lucid - if brief - rundown of the various kinds of money in the world, how the greater monetary system works, and what the motivations behind them are. He also introduces a plethora of actors attempting to make said system work better for them, the costs and risks of this, and who ends up paying the price in the end.
The picture he paints is not a pretty one. It's straight up dystopian - or at least steadily heading that way according to the author. For someone who's already a bit distrustful of big banks, over-reaching corporations and/or governments, data-collection and data-profiteering and/or data-weaponization... well, this isn't the book to soothe your nerves.
And, finally, for someone who is disgusted by the Swedish money-, payment-, and banking systems (at least in terms of the phasing out of cash), there's plenty of fuel for your fire here. Trust me, the frequent mentions of Swedish practices in "Cloudmoney" are not exactly flattering. But they are disturbingly accurate.
All that said, the author does leave a lot of positive aspects of the systems he disapproves of out of this book. I'm guessing that is because of his own agenda, but I would have liked to see him at least give some of these a mention. But then, since I generally think he did a good job of keeping his own opinions out of the factual writing (albeit that the book includes a few clearly telegraphed personal opinions), this could just be a reflection of his assumption that we are already familiar with these. Because, bottom line, most of us probably are, and that's kinda the first problem.
Recommended!
July 12, 2022
I’m going to give you one guess why Germans are so fond of cash and distrustful of digital money that can be easily taken away if something goes wrong with the system.
I’ve been reading books on this topic recently and they paint a bleak picture, but this one is at least not an entirely hopeless one. Cryptocurrency was, originally, a different beast from what it’s become, and I was already familiar with the concept (as familiar as one can be with something as confusing as cryptocurrency) but this book goes into detail about how all digital money works, and uses metaphors to illustrate it clearly.
I’ll be keeping my money in stacks of bills under my mattress from now on, thanks.
Further reading:
Money: The True Story of a Made-Up Thing - More background about the history of money and the origins of cryptocurrency.
The Age of Surveillance Capitalism: The Fight for a Human Future at the New Frontier of Power - Pretty self-explanatory.
Making Money - When you're done being depressed, this is very funny.
I’ve been reading books on this topic recently and they paint a bleak picture, but this one is at least not an entirely hopeless one. Cryptocurrency was, originally, a different beast from what it’s become, and I was already familiar with the concept (as familiar as one can be with something as confusing as cryptocurrency) but this book goes into detail about how all digital money works, and uses metaphors to illustrate it clearly.
I’ll be keeping my money in stacks of bills under my mattress from now on, thanks.
Further reading:
Money: The True Story of a Made-Up Thing - More background about the history of money and the origins of cryptocurrency.
The Age of Surveillance Capitalism: The Fight for a Human Future at the New Frontier of Power - Pretty self-explanatory.
Making Money - When you're done being depressed, this is very funny.
August 10, 2022
Som beskrevet av Shoshana Zuboff i 'The Age of Surveillance Capitalism' er teknologigigantene i ferd med å bygge AI systemer som i kraft av sin tilgang til stadig mer overvåkningsdata spår vår adferd og våre ønsker for slik å tilby oss det ‘perfekte’ produktet eller opplevelsen før vi selv er klar over at det var det vi ønsket oss. For individet som lever i denne fremtiden vil verden oppleves som en slags magisk manifestasjon av egen vilje, men i realiteten vil dette være en tom vilje, en vilje annektert av overvåkningskapitalismens kappløp mot å samle inn mer og mer adferdsdata i kampen om stadig høyere profitt.
I Cloudmoney beskriver Brett Scott sammensmeltningen av teknologigigantene og big-Finance, hvor en av konsekvensene er krigen mot kontanter – ønske om at alle økonomiske transaksjoner skal loggføres i deres systemer – fritt tilgjengelige for datahøsting. Ett av Bretts viktigste poenger er at i kampen mot overvåkningskapitalismens tilsynelatende ustoppelige fremmarsj, er bruken av kontanter en av de få gjenværende frisonene utilgjengelig for teknokapitalens guddommelige forsyn. En verden der kontanter har blitt ulovlig vil ikke være en god verden, noe så enkelt som å ta ut pengene du trenger for daglig bruk i en minibank blir derfor en viktig protesthandling, kanskje viktigere enn noen av oss aner.
I Cloudmoney beskriver Brett Scott sammensmeltningen av teknologigigantene og big-Finance, hvor en av konsekvensene er krigen mot kontanter – ønske om at alle økonomiske transaksjoner skal loggføres i deres systemer – fritt tilgjengelige for datahøsting. Ett av Bretts viktigste poenger er at i kampen mot overvåkningskapitalismens tilsynelatende ustoppelige fremmarsj, er bruken av kontanter en av de få gjenværende frisonene utilgjengelig for teknokapitalens guddommelige forsyn. En verden der kontanter har blitt ulovlig vil ikke være en god verden, noe så enkelt som å ta ut pengene du trenger for daglig bruk i en minibank blir derfor en viktig protesthandling, kanskje viktigere enn noen av oss aner.
February 11, 2023
cash is king, baby !!!
come to get freaked out by the intersection of big finance and big tech, stay to learn not only what crypto + blockchain are (best explanations i’ve read) but also what money itself is.
read on kindle (lightly ironic, considering) but want to buy this in physical form asap for a re-read.
come to get freaked out by the intersection of big finance and big tech, stay to learn not only what crypto + blockchain are (best explanations i’ve read) but also what money itself is.
read on kindle (lightly ironic, considering) but want to buy this in physical form asap for a re-read.
December 7, 2022
i know next to nothing about fintech or macroeconomics on a global scale, so this book was perfect for someone like me.
the author has a definite liberal slant - which i’m personally aligned with, but i genuinely love his acknowledgement of that bias and ability to write in, around, and with that understanding of his own lens. there’s a version of this conversation around money & access that is strictly objective: pros and cons, the reality of global financial systems, scalability, convenience, etc. there’s also a version that is very personal and very political: who gets access, who gets left behind, cultural differences, sexism, racism (the “we need cash to protect privacy” conversation is coopted by the “we need cash to stop the jewish cabal led by bill gates to control our lives” ‘conversation’ much quicker than you would think) and how all of those absolutely massive forces create this incredibly complex network that all culminates in me, 26, living in chicago, and literally never having any physical cash on me because i use apple pay for everything.
and the author’s ability to acknowledge the relative futility of individual contribution (the paper straws are doing next to nothing to offset the constant oil spills, but here we are, you know?) while still empowering individuals to reconsider aspects of our lives that are in our control.
this is one of those books that shifts the way i view the world, and i’m glad i read it. i’m probably going to need to reread it because i’m too dumb to retain the more complex things he talks about, but i want to be able to repeat and understand.
the author has a definite liberal slant - which i’m personally aligned with, but i genuinely love his acknowledgement of that bias and ability to write in, around, and with that understanding of his own lens. there’s a version of this conversation around money & access that is strictly objective: pros and cons, the reality of global financial systems, scalability, convenience, etc. there’s also a version that is very personal and very political: who gets access, who gets left behind, cultural differences, sexism, racism (the “we need cash to protect privacy” conversation is coopted by the “we need cash to stop the jewish cabal led by bill gates to control our lives” ‘conversation’ much quicker than you would think) and how all of those absolutely massive forces create this incredibly complex network that all culminates in me, 26, living in chicago, and literally never having any physical cash on me because i use apple pay for everything.
and the author’s ability to acknowledge the relative futility of individual contribution (the paper straws are doing next to nothing to offset the constant oil spills, but here we are, you know?) while still empowering individuals to reconsider aspects of our lives that are in our control.
this is one of those books that shifts the way i view the world, and i’m glad i read it. i’m probably going to need to reread it because i’m too dumb to retain the more complex things he talks about, but i want to be able to repeat and understand.
September 8, 2022
I found it interesting to learn about money and digital banking etc. But I found the author to really gloss over key facts that would counter some of his arguments. Like how he says cash is tactile and phones are not?! Okay, but there are screen readers that empower blind people to use technology, they're not some out of date community... and there's a high chance blind people would feel vulnerable to walk around with loads of cash on them? He didn't seem to even address this or even speak to someone blind to get their opinion, just said outright cash is better for hard of vision people which I struggle to believe.
I also think he's missing the bigger picture which is we need to bring cash users along, not leave them behind. He kept saying that people were *forced* to switch to cashless by the banks messaging but that just isn't true for myself and I'm sure others. I embraced it for the safety, the convenience, the data into my own expenses so I know how much I can save etc. He didn't seem to address this at all?
He seemed to be set out on an opinion with no intention to deliver a fair argument for the other side which made me struggle to take his argument seriously.
I also think he's missing the bigger picture which is we need to bring cash users along, not leave them behind. He kept saying that people were *forced* to switch to cashless by the banks messaging but that just isn't true for myself and I'm sure others. I embraced it for the safety, the convenience, the data into my own expenses so I know how much I can save etc. He didn't seem to address this at all?
He seemed to be set out on an opinion with no intention to deliver a fair argument for the other side which made me struggle to take his argument seriously.
Read
April 2, 2023This book was soooo good the author’s storytelling to explain super complicated concepts like global cash and digital money transfer systems, and crypto/blockchain logistics was super easy to understand 10/10 was v accessible ,, but this book was also super scary when considering the rise in surveillance capitalism and the push towards cashless societies where your money isn’t really your own and very few corporations and major actors own your information and can act as gatekeepers to society ,, overall very good but also makes me v concerned for society and humanity at large lol but great read !!
January 20, 2024
Cloudmoney looks at the push towards a cashless society and the institutions encouraging it. The book covers the role of the banking sector, fintech companies, and cryptocurrency. Worth reading.
January 3, 2023
Cloudmoney (2022) provides an overview of our present payment landscape. As it turns out, the age-old question of “cash or card” is not as simple as it seems. Underneath the push toward cashless is a murky world of powerful interests trying to extract profit and data from people’s purchases. And the disappearance of cash has more disadvantages than you might think.
Brett Scott is an economic anthropologist, financial activist, and former broker. In 2013 he published The Heretic’s Guide to Global Finance: Hacking the Future of Money, and since then has spoken at hundreds of events across the globe and has appeared across international media, including BBC World News and Sky News. He has written extensively on financial reform, digital finance, alternative currency, blockchain technology, and the cashless society for publications like the Guardian, New Scientist, Huffington Post, Wired, and CNN.com, and also publishes the Altered States of Monetary Consciousness newsletter. He has worked on financial reform campaigns and alternative currency systems with a wide range of groups and is a Senior Fellow of the Finance Innovation Lab (UK). He lives in Berlin.
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Discover the ongoing “war on cash” – and how it affects all of us.
In the modern societies we live in, we spend a lot of time buying things. And whether it’s online or offline, cashless ways to purchase goods are on the rise. Gone are the days of having to count out coins for the cashier – now, all you need to do is tap your phone or card against a payment terminal and, like magic, the transaction is complete.
But underneath the speed and convenience of cashless transactions lies the murky world of big finance and big tech. When you pay with cash, it’s a direct, usually anonymous transaction between buyer and seller. In the world of digital payments, though, this is not the case.
In this book, we’ll take you on a journey through today’s payment landscape. You’ll see that big tech and big finance are waging a sinister “war against cash.” We’ll look into how this came about – and what can be done to stop it.
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The war on cash
Let’s take a look at how we got to where we are today. Our story begins during the 2008 financial crisis. Back then, anti-bank sentiment was rife – big financial institutions were viewed as the cause of the economy’s crash, after all. The ramifications of the crisis were huge, and much of the global economy entered into a recession.
At the same time, a technological revolution was happening. In the summer of 2007, just before the financial crisis really got moving, Apple released the first iPhone. This led to startups quickly coming up with apps for all sorts of things, including finance. The promise of this new “fintech” industry? To disrupt the power of the banks, democratize finance, and widen financial access. In the near future, they declared, we would live in a “cashless society” with frictionless transactions.
But what happened next was not the promised revolution over the banks. Instead, as the tech industry morphed into “big tech,” it became part of the established order it had promised to replace. Companies like PayPal that originally set out to disrupt finance ended up being a new interface to transmit money from our existing, traditional bank accounts.
If anything, the advent of fintech has embedded the financial industry even more into our daily lives. We’re fed the narrative that digital, cashless payments are the way of the future, and that we don’t need cash anymore. We see this in the slow disappearance of ATMs and bank branches – the excuse is that customers are moving toward digital payments and no longer require them. But is this actually a big, collective desire from below? Are people really demanding a cashless society?
It turns out that this bottom-up narrative of customers clamoring for a cashless world is false. In fact, there’s been a huge top-down push against the cash system from powerful financial institutions. They have two goals here: to make profit and get data.
Let’s consider a perfectly normal situation – you’re ordering a drink at one of the increasing numbers of cashless bars. To do so, you need to download an app. Then, to log in, you’re asked to confirm your identity with Google or Facebook. Two commercial bank accounts are involved, as well as Visa or Mastercard who enable the transaction between the banks.
During this process, you’ve interacted with at least three corporate giants. Visa or Mastercard have taken a small fee for conducting the transaction. Studies show that the marginal transaction cost of a cashless payment is 50 to 150 percent higher than when using cash.
Meanwhile, Google or Facebook now know what you’ve bought. They’ll harvest the transaction data and sell it to companies who’ll use it to target ads toward you. Who knows – you might even receive ads related to the drinks you like to purchase at bars!
At the end of this process, you receive one drink. Of course, in most bars you can still pay for your drink with cash. But with the war on cash accelerating, more and more businesses are going cashless.
Over the years, the anti-cash front of financial giants has used many arguments to get businesses and their customers to go cashless. In the past, it was convenience and speed. Now, in the age of Covid-19, they’ve used a new argument to dramatically accelerate the war on cash:hygiene.
Take large retailers, for example. Egged on by payment companies, many of them stopped accepting cash payments at the beginning of the pandemic. Sports superstore Decathlon was one of them. But were they right? Well, England’s central bank released a report early in the pandemic saying that card machines, shopping wagon handles, goods, and self-checkout screens all posed a much higher risk of transmitting the virus than cash. So what’s going on here?
The fact is that the anti-cash alliance is able to afford huge amounts of propaganda in the form of lobbying and PR. This means it’s becoming harder and harder to fight back. After all, who’s fighting on the side of cash? Central banks are essentially neutral on the topic. With financial institutions having a lot to gain in defeating cash, what do the rest of us have to gain in preserving it?
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“Cash doesn’t crash”
To understand the value of cash, let’s unpack a metaphor which anti-cash advocates often use – that of the horse cart and the car. The insinuation is that those clinging on to cash are similar to the people who clung on to the out-of-date horse cart after the invention of the better, faster car. Eventually, though, horse carts became a thing of the past – and financial institutions want the same thing to happen with cash.
But this metaphor is problematic. While slow horse carts did get in the way of faster cars, cash doesn’t block cashless. A better metaphor is cash as a bicycle instead of a horse cart. Phasing out cash is like closing down bike lanes that run alongside roads – all in order to make more space for cars. But although bikes are slower, they’re also safer, don’t produce air pollution, and reduce traffic.
Back in the day, car manufacturers touted all the benefits of the new car while suppressing news of car accidents. The same is the case with banks and payment companies today – they’re all for promoting the speed and convenience of cashless, but you’ll never hear them promoting surveillance or cyberhacking.
And although cars and cashless are usually faster, this isn’t actually always the case. In fact, in our modern, congested cities, cycling can sometimes be faster and more effective than sitting in a traffic jam. The same can be said for cash. When communication systems are about to be jammed by weather events like hurricanes, people flock to withdraw “offline” cash, as it will never fail. Similarly, take the 2008 financial crisis. All over the world, huge lines were commonplace in front of ATMs because customers were afraid that their bank would be the next to fail. But “cash doesn’t crash,” as the saying goes.
Unfortunately, when economic, political, or climate crises strike in the future, it will be much harder for people to withdraw cash if current trends continue. One reason is the slow death of the ATM. British government data shows that between 2015 and 2020, the amount of ATMs shrunk by 24 percent.
This brings us to the class element of the war on cash – its usage is associated with working-class and minority groups. This makes sense, as these sections of society have most often been historically discriminated against by elite institutions like banks. For them, cash is an important way to participate in capitalist society while having some protection from exploitation.
Unlike a credit card that might put you into debt, cash is honest. So it comes as no surprise that cash helps working-class people save money. Ironically, studies from Visa itself show that people spend more with their card than with cash in various situations. At a family restaurant, for example, customers dole out 40 percent more money on average if they’re paying with card.
Cash is physical and tangible, and you can literally see it disappear as you spend it. Card companies, on the other hand, want us to spend more. The more we spend, the more we go into debt – and the interest on debt payments leads to more profit for financial companies.
It’s not even a stretch to say that cash has a history of association with progressive social change. There are plenty of previously illegal things that relied on the use of cash, such as homosexuality, interracial relationships, or the black market for illegal substances.
Take Prohibition, for example. Although drinking alcohol was illegal, tens of millions still engaged in it. It may have been illegal, but it wasn’t immoral. Like so many other previously illegal activities, it existed in a gray area and was pushed underground.
Without cash, these gray areas would be much more difficult to maintain. The push for legalizing cannabis would not be possible in a cashless society, for example. Cash provides life support for the cannabis industry; at the same time, its supporters advocate for its use. This has allowed medical marijuana to become widely available and provide relief from countless illnesses.
Whether it’s for an illegal rave or raising money for disruptive climate activism, cash is key for advancing social progress. And the rise of cashless payments is slowly choking out the possibility for creative deviance. This is particularly true if you consider how easy it is for the state to request a payment history of bank customers. Under legislation such as the US Patriot Act, the government doesn’t even need to inform the citizen that they’ve accessed bank records. And a citizenry that’s being watched is less likely to engage in subversive activities.
But there is some good news for the future of cash at present – although not for the best reasons. The use of cash is currently on the rise due to the growing number of crises humanity is experiencing. Whether it’s Covid-19 (and the associated economic impact), war, or climate catastrophe, there are quite a few crises the world is currently dealing with. And as cash doesn’t crash, people everywhere are reverting to money they can touch and see – and store in a box under the bed rather than in the faceless digital aether that might melt away at any moment.
All of this is not meant to overly romanticize cash. But considering its positive effects in helping to put the brakes on financialized capitalist growth, as well as affecting social change, it’s definitely worth defending. At the end of the day, cash helps human beings interact organically. It empowers them to be autonomous rather than relying on middlemen to facilitate all monetary transactions – and charging a fee to boot.
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Cryptocurrencies and the future of money
So, we’ve established that it’s important to protect cash in order to fight against corporate capitalism’s advance. But is there anything else we can be doing? Are there any new weapons we should be developing to attack the power of big tech and big finance?
Well, once upon a time, there was the hope that Bitcoin and other cryptocurrencies might facilitate a payment system that didn’t rely on big banks. That was back in 2008, when the notorious person or group known as Satoshi Nakamoto brought Bitcoin into the world. Indeed, its stated goal was to be a peer-to-peer electronic cash system.
Sadly, over the years it became clear that cryptocurrencies wouldn’t save us from the growing corporate stranglehold over our wallets. This is due to a number of reasons. One is that from the get-go, crypto enthusiasts were mostly divided into two camps – those who advocated for crypto to be used as digital cash, and those who wanted it to become digital gold. Sadly, the latter have now all but won – crypto these days is not much more than a speculative, digital asset.
The other reason that crypto doesn’t work as digital cash is that it’s unable to act as a “means of account.” In other words, essentially zero prices are ever denominated in cryptocurrencies. Even if someone purchases something with crypto, the price of the good is still attached to the value of fiat currencies like the dollar. With crypto prices now fluctuating more similarly to speculative assets than currencies, it’s unlikely that people will start pricing things in crypto anytime soon.
Aside from crypto, there are a few other candidates that might help in the fight against big tech and big finance. One is a central bank digital currency, or CBDC. This involves citizens having digital bank accounts with their central bank, like the Federal Reserve in the US, rather than with a commercial bank. The benefits of such a system could be transformational.
For example, as central banks are not profit-making institutions, there’s no need to include payment fees in every CBDC transaction. Lower transaction costs means lower prices. A CBDC system also makes it easier to facilitate payments directly from the state to households – meaning concepts like universal basic income become much easier to implement. And unlike money stored in a PayPal or commercial bank account, money in a CBDC account isn’t prone to being lost by banks going bust.
Countries like Sweden and China are in the process of introducing CBDC systems, and there are other countries considering developing them. This makes it important to consider some of the downsides of CBDC. The biggest one is that of state surveillance. Just as with existing digital payment systems, CBDC infrastructure as it’s currently being developed would allow for state surveillance over our financial lives.
There are some ways this problem could be addressed, however. One would be to combine a CBDC with a private blockchain system. This would yield anonymity similar to crypto currencies, allowing people to hold state money in private accounts. Implementing such a system would be the closest we’d get to having a true “digital cash.” In fact, an anonymized CBDC could be the system that ends up breaking the power that commercial banks currently have over our lives. This doesn’t mean the banking industry would be abolished – the systems would simply run alongside each other, like bikes and cars.
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Big tech and big finance are waging a war against cash, and in many ways they seem to be winning. Their propaganda is slowly convincing businesses to move away from accepting cash payments. And their goal is to convince populations that cash is destined to die out, just as the horse cart did after the invention of the car. But cash is not a horse cart – it’s a bicycle running alongside a traffic jam. It may not be as fast, but it is safer. And when a crisis strikes, you’ll always be able to access the cash under your bed; if your bank goes bust, you might not be as lucky. While we’re defending cash, we need to investigate alternatives to the stranglehold that corporate capitalism has over digital payments. Central bank digital currencies seem like a good option, but they’ll need to be optimized and improved if they’re to truly become digital cash.
Brett Scott is an economic anthropologist, financial activist, and former broker. In 2013 he published The Heretic’s Guide to Global Finance: Hacking the Future of Money, and since then has spoken at hundreds of events across the globe and has appeared across international media, including BBC World News and Sky News. He has written extensively on financial reform, digital finance, alternative currency, blockchain technology, and the cashless society for publications like the Guardian, New Scientist, Huffington Post, Wired, and CNN.com, and also publishes the Altered States of Monetary Consciousness newsletter. He has worked on financial reform campaigns and alternative currency systems with a wide range of groups and is a Senior Fellow of the Finance Innovation Lab (UK). He lives in Berlin.
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Discover the ongoing “war on cash” – and how it affects all of us.
In the modern societies we live in, we spend a lot of time buying things. And whether it’s online or offline, cashless ways to purchase goods are on the rise. Gone are the days of having to count out coins for the cashier – now, all you need to do is tap your phone or card against a payment terminal and, like magic, the transaction is complete.
But underneath the speed and convenience of cashless transactions lies the murky world of big finance and big tech. When you pay with cash, it’s a direct, usually anonymous transaction between buyer and seller. In the world of digital payments, though, this is not the case.
In this book, we’ll take you on a journey through today’s payment landscape. You’ll see that big tech and big finance are waging a sinister “war against cash.” We’ll look into how this came about – and what can be done to stop it.
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The war on cash
Let’s take a look at how we got to where we are today. Our story begins during the 2008 financial crisis. Back then, anti-bank sentiment was rife – big financial institutions were viewed as the cause of the economy’s crash, after all. The ramifications of the crisis were huge, and much of the global economy entered into a recession.
At the same time, a technological revolution was happening. In the summer of 2007, just before the financial crisis really got moving, Apple released the first iPhone. This led to startups quickly coming up with apps for all sorts of things, including finance. The promise of this new “fintech” industry? To disrupt the power of the banks, democratize finance, and widen financial access. In the near future, they declared, we would live in a “cashless society” with frictionless transactions.
But what happened next was not the promised revolution over the banks. Instead, as the tech industry morphed into “big tech,” it became part of the established order it had promised to replace. Companies like PayPal that originally set out to disrupt finance ended up being a new interface to transmit money from our existing, traditional bank accounts.
If anything, the advent of fintech has embedded the financial industry even more into our daily lives. We’re fed the narrative that digital, cashless payments are the way of the future, and that we don’t need cash anymore. We see this in the slow disappearance of ATMs and bank branches – the excuse is that customers are moving toward digital payments and no longer require them. But is this actually a big, collective desire from below? Are people really demanding a cashless society?
It turns out that this bottom-up narrative of customers clamoring for a cashless world is false. In fact, there’s been a huge top-down push against the cash system from powerful financial institutions. They have two goals here: to make profit and get data.
Let’s consider a perfectly normal situation – you’re ordering a drink at one of the increasing numbers of cashless bars. To do so, you need to download an app. Then, to log in, you’re asked to confirm your identity with Google or Facebook. Two commercial bank accounts are involved, as well as Visa or Mastercard who enable the transaction between the banks.
During this process, you’ve interacted with at least three corporate giants. Visa or Mastercard have taken a small fee for conducting the transaction. Studies show that the marginal transaction cost of a cashless payment is 50 to 150 percent higher than when using cash.
Meanwhile, Google or Facebook now know what you’ve bought. They’ll harvest the transaction data and sell it to companies who’ll use it to target ads toward you. Who knows – you might even receive ads related to the drinks you like to purchase at bars!
At the end of this process, you receive one drink. Of course, in most bars you can still pay for your drink with cash. But with the war on cash accelerating, more and more businesses are going cashless.
Over the years, the anti-cash front of financial giants has used many arguments to get businesses and their customers to go cashless. In the past, it was convenience and speed. Now, in the age of Covid-19, they’ve used a new argument to dramatically accelerate the war on cash:hygiene.
Take large retailers, for example. Egged on by payment companies, many of them stopped accepting cash payments at the beginning of the pandemic. Sports superstore Decathlon was one of them. But were they right? Well, England’s central bank released a report early in the pandemic saying that card machines, shopping wagon handles, goods, and self-checkout screens all posed a much higher risk of transmitting the virus than cash. So what’s going on here?
The fact is that the anti-cash alliance is able to afford huge amounts of propaganda in the form of lobbying and PR. This means it’s becoming harder and harder to fight back. After all, who’s fighting on the side of cash? Central banks are essentially neutral on the topic. With financial institutions having a lot to gain in defeating cash, what do the rest of us have to gain in preserving it?
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“Cash doesn’t crash”
To understand the value of cash, let’s unpack a metaphor which anti-cash advocates often use – that of the horse cart and the car. The insinuation is that those clinging on to cash are similar to the people who clung on to the out-of-date horse cart after the invention of the better, faster car. Eventually, though, horse carts became a thing of the past – and financial institutions want the same thing to happen with cash.
But this metaphor is problematic. While slow horse carts did get in the way of faster cars, cash doesn’t block cashless. A better metaphor is cash as a bicycle instead of a horse cart. Phasing out cash is like closing down bike lanes that run alongside roads – all in order to make more space for cars. But although bikes are slower, they’re also safer, don’t produce air pollution, and reduce traffic.
Back in the day, car manufacturers touted all the benefits of the new car while suppressing news of car accidents. The same is the case with banks and payment companies today – they’re all for promoting the speed and convenience of cashless, but you’ll never hear them promoting surveillance or cyberhacking.
And although cars and cashless are usually faster, this isn’t actually always the case. In fact, in our modern, congested cities, cycling can sometimes be faster and more effective than sitting in a traffic jam. The same can be said for cash. When communication systems are about to be jammed by weather events like hurricanes, people flock to withdraw “offline” cash, as it will never fail. Similarly, take the 2008 financial crisis. All over the world, huge lines were commonplace in front of ATMs because customers were afraid that their bank would be the next to fail. But “cash doesn’t crash,” as the saying goes.
Unfortunately, when economic, political, or climate crises strike in the future, it will be much harder for people to withdraw cash if current trends continue. One reason is the slow death of the ATM. British government data shows that between 2015 and 2020, the amount of ATMs shrunk by 24 percent.
This brings us to the class element of the war on cash – its usage is associated with working-class and minority groups. This makes sense, as these sections of society have most often been historically discriminated against by elite institutions like banks. For them, cash is an important way to participate in capitalist society while having some protection from exploitation.
Unlike a credit card that might put you into debt, cash is honest. So it comes as no surprise that cash helps working-class people save money. Ironically, studies from Visa itself show that people spend more with their card than with cash in various situations. At a family restaurant, for example, customers dole out 40 percent more money on average if they’re paying with card.
Cash is physical and tangible, and you can literally see it disappear as you spend it. Card companies, on the other hand, want us to spend more. The more we spend, the more we go into debt – and the interest on debt payments leads to more profit for financial companies.
It’s not even a stretch to say that cash has a history of association with progressive social change. There are plenty of previously illegal things that relied on the use of cash, such as homosexuality, interracial relationships, or the black market for illegal substances.
Take Prohibition, for example. Although drinking alcohol was illegal, tens of millions still engaged in it. It may have been illegal, but it wasn’t immoral. Like so many other previously illegal activities, it existed in a gray area and was pushed underground.
Without cash, these gray areas would be much more difficult to maintain. The push for legalizing cannabis would not be possible in a cashless society, for example. Cash provides life support for the cannabis industry; at the same time, its supporters advocate for its use. This has allowed medical marijuana to become widely available and provide relief from countless illnesses.
Whether it’s for an illegal rave or raising money for disruptive climate activism, cash is key for advancing social progress. And the rise of cashless payments is slowly choking out the possibility for creative deviance. This is particularly true if you consider how easy it is for the state to request a payment history of bank customers. Under legislation such as the US Patriot Act, the government doesn’t even need to inform the citizen that they’ve accessed bank records. And a citizenry that’s being watched is less likely to engage in subversive activities.
But there is some good news for the future of cash at present – although not for the best reasons. The use of cash is currently on the rise due to the growing number of crises humanity is experiencing. Whether it’s Covid-19 (and the associated economic impact), war, or climate catastrophe, there are quite a few crises the world is currently dealing with. And as cash doesn’t crash, people everywhere are reverting to money they can touch and see – and store in a box under the bed rather than in the faceless digital aether that might melt away at any moment.
All of this is not meant to overly romanticize cash. But considering its positive effects in helping to put the brakes on financialized capitalist growth, as well as affecting social change, it’s definitely worth defending. At the end of the day, cash helps human beings interact organically. It empowers them to be autonomous rather than relying on middlemen to facilitate all monetary transactions – and charging a fee to boot.
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Cryptocurrencies and the future of money
So, we’ve established that it’s important to protect cash in order to fight against corporate capitalism’s advance. But is there anything else we can be doing? Are there any new weapons we should be developing to attack the power of big tech and big finance?
Well, once upon a time, there was the hope that Bitcoin and other cryptocurrencies might facilitate a payment system that didn’t rely on big banks. That was back in 2008, when the notorious person or group known as Satoshi Nakamoto brought Bitcoin into the world. Indeed, its stated goal was to be a peer-to-peer electronic cash system.
Sadly, over the years it became clear that cryptocurrencies wouldn’t save us from the growing corporate stranglehold over our wallets. This is due to a number of reasons. One is that from the get-go, crypto enthusiasts were mostly divided into two camps – those who advocated for crypto to be used as digital cash, and those who wanted it to become digital gold. Sadly, the latter have now all but won – crypto these days is not much more than a speculative, digital asset.
The other reason that crypto doesn’t work as digital cash is that it’s unable to act as a “means of account.” In other words, essentially zero prices are ever denominated in cryptocurrencies. Even if someone purchases something with crypto, the price of the good is still attached to the value of fiat currencies like the dollar. With crypto prices now fluctuating more similarly to speculative assets than currencies, it’s unlikely that people will start pricing things in crypto anytime soon.
Aside from crypto, there are a few other candidates that might help in the fight against big tech and big finance. One is a central bank digital currency, or CBDC. This involves citizens having digital bank accounts with their central bank, like the Federal Reserve in the US, rather than with a commercial bank. The benefits of such a system could be transformational.
For example, as central banks are not profit-making institutions, there’s no need to include payment fees in every CBDC transaction. Lower transaction costs means lower prices. A CBDC system also makes it easier to facilitate payments directly from the state to households – meaning concepts like universal basic income become much easier to implement. And unlike money stored in a PayPal or commercial bank account, money in a CBDC account isn’t prone to being lost by banks going bust.
Countries like Sweden and China are in the process of introducing CBDC systems, and there are other countries considering developing them. This makes it important to consider some of the downsides of CBDC. The biggest one is that of state surveillance. Just as with existing digital payment systems, CBDC infrastructure as it’s currently being developed would allow for state surveillance over our financial lives.
There are some ways this problem could be addressed, however. One would be to combine a CBDC with a private blockchain system. This would yield anonymity similar to crypto currencies, allowing people to hold state money in private accounts. Implementing such a system would be the closest we’d get to having a true “digital cash.” In fact, an anonymized CBDC could be the system that ends up breaking the power that commercial banks currently have over our lives. This doesn’t mean the banking industry would be abolished – the systems would simply run alongside each other, like bikes and cars.
---
Big tech and big finance are waging a war against cash, and in many ways they seem to be winning. Their propaganda is slowly convincing businesses to move away from accepting cash payments. And their goal is to convince populations that cash is destined to die out, just as the horse cart did after the invention of the car. But cash is not a horse cart – it’s a bicycle running alongside a traffic jam. It may not be as fast, but it is safer. And when a crisis strikes, you’ll always be able to access the cash under your bed; if your bank goes bust, you might not be as lucky. While we’re defending cash, we need to investigate alternatives to the stranglehold that corporate capitalism has over digital payments. Central bank digital currencies seem like a good option, but they’ll need to be optimized and improved if they’re to truly become digital cash.
April 14, 2025
CLOUD MONEY
Lo que más me ha gustado es la forma de explicar la diferencia entre el dinero del Estado y el dinero bancario. También explica bastante bien lo que es el Bitcoin y la tecnología blockchain.
Parece que el autor es un poco izquierdista pero al mismo tiempo coincide en alunos temas con visiones de determinados grupos de derecha o incluso extrema derecha (por ejemplo en su visión negativa de USAID).
Mi opinión sobre el dinero en efectivo es que tampoco va a cambiar demasiadas cosas si desaparece, aunque a mí me gustaría que no fuese así y siempre que puedo lo utilizo aunque sea sólo por fastidiar. Lo que realmente cambiará muchas cosas es la emisión del euro digital, el dólar digital y el yuan digital. El autor lo menciona y lo que dice es muy pertinente pues podría provocar un pánico bancario digital si las cosas no se hacen bien. El papel de los bancos comerciales se tendrá que reinventar una vez más. A continuació copio algunas citas que me han llamado la atención durante la lectura:
P.34 ‘Lo que no veo son las infraestructuras institucionales que sientan las bases de esa pequeña acción: el derecho contractual, la fuerza militar, los derechos de propiedad, las extensas cadenas de suministro de las empresas y los enormes sistemas de financiación del comercio mundial. No veo que cada compra en la tienda está cerrando en parte un circuito financiero de varios niveles que se inició posiblemente hace décadas (incluso siglos).’
P.67 ‘La principal cautela que limita al Estado es la necesidad de no llevar a cabo una emisión excesiva que destruya la red de la que depende. El oscuro arte de la política monetaria consiste en mantener esa red lo bastante firme como para que la gente se sienta segura, pero lo bastante flexible como para que pueda expandirse y transformarse.’
P.72 ‘en realidad hace tiempo que el gigante estatal quedó superado y delegó su control del sistema monetario en un grupo dominante de empresas capitalistas. Nuestro sistema monetario actual tiene una estructura dual y simbiótica, porque el Estado permite a los bancos comerciales emitir una gran parte de la oferta monetaria.’
P.76 ‘Si ingresamos 100 libras en efectivo, el banco se apropia de ellas pero entonces emite para nosotros cien fichas digitales que aparecerán en nuestra cuenta como 100. Estas fichas son promesas de dinero del Estado (...) el banco las ve como una obligación. El banco ha adquirido dinero emitido por el Estado y nosotros hemos adquirido las fichas digitales emitidas por el banco.Ir al cajero automático es el equivalente de intentar salir del casino.’
P.79 ‘Los bancos no prestan dinero del Estado a las personas que solicitan préstamos.(...) Como depositantes nuestro papel no es dar a los bancos dinero para que lo presten. Nuestro papel es aumentar sus reservas contra las que emiten fichas.’
P.86 ‘Si los bancos cogen nuestro dinero del Estado y nos emiten a cambio fichas bancarias digitales, las redes como PayPal cogen esas fichas y nos dan a cambio las suyas. Es decir, las cifras de nuestra cuenta de PayPal son pagarés corporativos de tercer nivel, que sustituyen a los pagarés bancarios de segundo nivel, que sustituyen a los pagarés estatales de primer nivel.’
P.96 ‘Las transferencias bancarias digitales no son una actualización del sistema estatal de dinero en efectivo, puesto que este último sostiene al primero, del mismo modo que las fichas de los casinos no son una actualización del dinero en efectivo al que prometen acceso. Lo único de lo que son una actualización las transferencias bancarias digitales es de las transferencias bancarias no digitales(cheque).’
P.111 ‘si estamos convencidos de que la gente siempre va a crear nuevas áreas grises, debemos saber que, a falta del dinero en efectivo, esas nuevas áreas se sostendrán gracias a la proliferación de nuevos medios de pago sin efectivo y ocultos, como las criptomonedas.’
P.133 ‘(...) USAID, que tiene cuatro objetivos oficiales: promover la seguridad nacional de Estados Unidos, abordar las causas fundamentales de la inmigración y el terrorismo, crear oportunidades económicas para los estadounidenses y, por último, apoyar los intereses empresariales de Estados Unidos,para lo que se asocia con -entre otros- Visa y Google.’
Me pregunto qué sentirá el autor, que parece más bien de izquierdas, sobre los recientes acontecimientos de Elon Musk cargándose USAID a lo bestia. Parece que no cuadra mucho con su relato.
P.145 ‘Cuando recurrimos a pequeñas empresas de tecnología financiera, muchas veces acabamos empleando el mismo sistema operativo financiero de base que controlan los poderes tradicionales. El motivo es que las empresas tecnológicas no evitan el sistema financiero existente, sino que se conectan a él. PayPal fue uno de los primeros ejemplos: empezó con grandes pretensiones de transformar las finanzas pero al final se quedó como un mero transmisor de dinero conectado a las cuentas bancarias.’
P.146 ‘La aparente lucha a muerte entre los bancos y las empresas tecnológicas parece más bien una simbiosis que afianza el poder general de las grandes finanzas al ampliar su alcance mediante nuevos actores
P.153 ‘Amazon sigue exigiendo que hagamos clic cada vez en comprar, pero otros están introduciendo plataformas integradas que permiten el pago automático. Por ejemplo, al bajar de un Uber, los centros de datos de la empresa llegan automáticamente a los centros de datos de nuestro banco a través de los centros de datos de Visa o Mastercard y entonces se efectúa el pago.’
P.175 ‘En situaciones en las que el acceso depende de una franja de microdatos dinámicos obtenida mediante una intromisión, el panoptismo puede insertarse en nuestra vida. ¿Qué nuevos datos surgirán de lo que compremos, o de las personas con las que nos relacionemos, o de la velocidad a la que caminemos?’
P.181 ‘Los poderosos leviatanes estatales sostienen un leviatán más amplio que se extiende mas allá del Estado: las sociedades modernas nos someten a sistemas monetarios públicos y privados comunes, gestionados por los bancos, junto con las empresas de telecomunicaciones, las empresas de servicios públicos y, cada vez más, megacorporaciones como Amazon y Uber, que actúan como leviatanes de segundo nivel.’
P.196 Bitcoin ‘Una persona tiene algo parecido a una ‘cuenta’ en esa base de datos abierta. Se llama ‘dirección pública’. Esa dirección pública es un seudónimo-es visible para cualquiera en todo el mundo, pero no lo nombra directamente- y cualquiera en el sistema puede enviarte tokens. Para poder trasladar esos tokens a otra persona, hay que redactar una carta digital para autorizar un cambio e introducirla en un sobre digital cerrado. Hay que firmarla y, para eso, hay que estar en posesión de una clave privada que demuestre que esa persona es la legítima propietaria de la dirección pública que contiene los tokens.
Par redactar y enviar ese mensaje a los tecnocajeros, el usuario habrá descargado un ‘monedero’(que tiene el único propósito de enviar esos sobres digitales al ciberespacio. Los tecnocajeros al recibir los sobres digitales los añaden a una cola de peticiones de cambios en la gran base de datos pública. La tarea de los tecnocajeros es comprobar que las solicitudes son legítimas y a continuación su objetivo será actualizar la base de datos para plasmar los cambios solicitados y por tanto, trasladar esos tokens a la dirección pública de otra persona. Si lo consiguen, se conceden a sí mismo una recompensa.’
P.201 Blockchain ‘Unimos el concepto de sincronización colectiva con el concepto de esculturas cronológicas digitales construidas de forma individual, para crear algo aún más poderoso que los dos conceptos por separado. Los sistemas blockchain están distribuidos, pero esto no significa ‘una escultura digital dividida en partes que se mantienen en diferentes lugares. Significa ‘muchas esculturas diferentes construidas en paralelo en diferentes lugares y sincronizadas para unirlas.’
P.204 Minería ‘Al final, uno de los tecnocajeros lo consigue y, con un grito de victoria, envía la versión actualizada de su escultura, junto con un número determinado de tokens nuevos incorporados, a todos los demás, que deben abandonar sus respectivos intentos, sincronizarse y volver a empezar el proceso.’
P.206 ‘los tokens de bitcoin no son más que cifras escritas, registradas en el sistema blockchain, algo así como un sistema de contabilidad en el que no se contabiliza nada. El objeto y el número son la misma cosa.’
P.209 Bitcoin ‘dada la imagen de mercancía que rodea al bitcoin, los tokens han llegado a dar la sensación de ser objetos de colección de edición limitada, aunque no puedan exhibirse como un amuleto de oro.’
P.210 ‘Cuando practicamos el comercio de contrapartida con coleccionables informáticos, tampoco estamos derribando el orden monetario mundial.’
P.210 ‘Un intento excesivo de reprimir el dinero en efectivo podría inspirar nuevas formas de pago clandestinas. La gran capacidad de contrapartida del bitcoin lo convierte, sin duda, en un candidato para ese puesto, a pesar de su volatilidad.’
P.211 Bitcoin vs Occupy Wall Street. ‘Para los libertarios del mercado libre más recalcitrantes, el capitalismo y sus mercados son casi una especie de deidad (...) Los libertarios del bitcoin suelen decir que el sistema financiero actual es parecido a un catolicismo corrupto, con grandes instituciones -gobiernos y bancos- que median para conseguir acceso al sagrado beneficio mientras distorsionan la voluntad del mercado. Son como la Reforma protestante, en busca de una comunión directa con el mercado. A los izquierdistas de Occupy estos reformistas pueden parecerles capitalistas corporativos disfrazados con otro nombre, puesto que unos y otros aseguran venerar los procesos mercantiles. Pero eso es como decir que Martín Lutero y el papa tienen más cosas en común que elementos que los separan’ Curiosa analogía y también curioso como reparte las mayúsculas el autor (¿Desvelando su puritanismo vestido de progresismo?).
P.214 Bitcoin vs Bitcoin Cash ‘La bifurcación es una práctica fundamental en la cultura del código abierto.(...) Bitcoin Cash comparte el mismo código subyacente que bitcoin y pasó sus años de formación en la misma blockchain del bitcoin, pero se separó de ese pasado común para crear una realidad paralela bajo una nueva marca.’
P.223 Ethereum ‘No hay necesidad de una policía humana porque el código imparable es como la física y sirve de ley y policía a la vez.’
P.234 Monedas estables ‘Un token de Tether era un ‘criptodolar’respaldado por dólares bancarios, parcialmente avalados a su vez por los dólares estatales de la Fed. Estas promesas descentralizadas a cambio de dólares bancarios pasaron a denominarse ‘monedas estables’.
P.241 Euro digital ‘Lo que llamamos ‘dinero en efectivo’ es una moneda física anónima de curso legal emitida por los estados, lo que sugiere que las instituciones estatales están en la mejor posición para emitir una versión digital de este. Esta versión digital del dinero estatal (llamada ‘reservas’) es como la moneda interna de un club privado, mientras que los demás utilizamos la versión física pública.’
P.242 ‘La perspectiva de tener dinero de un banco central sin riesgos podría llevar a decenas de millones de personas a hacer cola para abrir cuentas en dicha entidad.(...) Podría animar a la gente a huir de los bancos comerciales y causar un ‘pánico bancario digital’. Un pánico bancario digital supondría que la gente diera instrucciones a su entidad bancaria comercial correspondiente para que transfiriese dinero digital del Estado a la cuenta recién abierta en el Banco Central, lo que agotaría las reservas de dichas entidades.’ Hace poco leí una noticia sobre el Euro digital en la que se decía que cada persona podría tener un número limitado de € digitales (la cantidad todavía estaba en estudio) precisamente para evitar la quiebra de los bancos comerciales.
P.252 ‘Aceptémoslo. La nube de IA espiritual y trascendente a la que se refieren Kurzweil y sus colaboradores es el conglomerado financiero-corporativo que he expuesto.’
Lo que más me ha gustado es la forma de explicar la diferencia entre el dinero del Estado y el dinero bancario. También explica bastante bien lo que es el Bitcoin y la tecnología blockchain.
Parece que el autor es un poco izquierdista pero al mismo tiempo coincide en alunos temas con visiones de determinados grupos de derecha o incluso extrema derecha (por ejemplo en su visión negativa de USAID).
Mi opinión sobre el dinero en efectivo es que tampoco va a cambiar demasiadas cosas si desaparece, aunque a mí me gustaría que no fuese así y siempre que puedo lo utilizo aunque sea sólo por fastidiar. Lo que realmente cambiará muchas cosas es la emisión del euro digital, el dólar digital y el yuan digital. El autor lo menciona y lo que dice es muy pertinente pues podría provocar un pánico bancario digital si las cosas no se hacen bien. El papel de los bancos comerciales se tendrá que reinventar una vez más. A continuació copio algunas citas que me han llamado la atención durante la lectura:
P.34 ‘Lo que no veo son las infraestructuras institucionales que sientan las bases de esa pequeña acción: el derecho contractual, la fuerza militar, los derechos de propiedad, las extensas cadenas de suministro de las empresas y los enormes sistemas de financiación del comercio mundial. No veo que cada compra en la tienda está cerrando en parte un circuito financiero de varios niveles que se inició posiblemente hace décadas (incluso siglos).’
P.67 ‘La principal cautela que limita al Estado es la necesidad de no llevar a cabo una emisión excesiva que destruya la red de la que depende. El oscuro arte de la política monetaria consiste en mantener esa red lo bastante firme como para que la gente se sienta segura, pero lo bastante flexible como para que pueda expandirse y transformarse.’
P.72 ‘en realidad hace tiempo que el gigante estatal quedó superado y delegó su control del sistema monetario en un grupo dominante de empresas capitalistas. Nuestro sistema monetario actual tiene una estructura dual y simbiótica, porque el Estado permite a los bancos comerciales emitir una gran parte de la oferta monetaria.’
P.76 ‘Si ingresamos 100 libras en efectivo, el banco se apropia de ellas pero entonces emite para nosotros cien fichas digitales que aparecerán en nuestra cuenta como 100. Estas fichas son promesas de dinero del Estado (...) el banco las ve como una obligación. El banco ha adquirido dinero emitido por el Estado y nosotros hemos adquirido las fichas digitales emitidas por el banco.Ir al cajero automático es el equivalente de intentar salir del casino.’
P.79 ‘Los bancos no prestan dinero del Estado a las personas que solicitan préstamos.(...) Como depositantes nuestro papel no es dar a los bancos dinero para que lo presten. Nuestro papel es aumentar sus reservas contra las que emiten fichas.’
P.86 ‘Si los bancos cogen nuestro dinero del Estado y nos emiten a cambio fichas bancarias digitales, las redes como PayPal cogen esas fichas y nos dan a cambio las suyas. Es decir, las cifras de nuestra cuenta de PayPal son pagarés corporativos de tercer nivel, que sustituyen a los pagarés bancarios de segundo nivel, que sustituyen a los pagarés estatales de primer nivel.’
P.96 ‘Las transferencias bancarias digitales no son una actualización del sistema estatal de dinero en efectivo, puesto que este último sostiene al primero, del mismo modo que las fichas de los casinos no son una actualización del dinero en efectivo al que prometen acceso. Lo único de lo que son una actualización las transferencias bancarias digitales es de las transferencias bancarias no digitales(cheque).’
P.111 ‘si estamos convencidos de que la gente siempre va a crear nuevas áreas grises, debemos saber que, a falta del dinero en efectivo, esas nuevas áreas se sostendrán gracias a la proliferación de nuevos medios de pago sin efectivo y ocultos, como las criptomonedas.’
P.133 ‘(...) USAID, que tiene cuatro objetivos oficiales: promover la seguridad nacional de Estados Unidos, abordar las causas fundamentales de la inmigración y el terrorismo, crear oportunidades económicas para los estadounidenses y, por último, apoyar los intereses empresariales de Estados Unidos,para lo que se asocia con -entre otros- Visa y Google.’
Me pregunto qué sentirá el autor, que parece más bien de izquierdas, sobre los recientes acontecimientos de Elon Musk cargándose USAID a lo bestia. Parece que no cuadra mucho con su relato.
P.145 ‘Cuando recurrimos a pequeñas empresas de tecnología financiera, muchas veces acabamos empleando el mismo sistema operativo financiero de base que controlan los poderes tradicionales. El motivo es que las empresas tecnológicas no evitan el sistema financiero existente, sino que se conectan a él. PayPal fue uno de los primeros ejemplos: empezó con grandes pretensiones de transformar las finanzas pero al final se quedó como un mero transmisor de dinero conectado a las cuentas bancarias.’
P.146 ‘La aparente lucha a muerte entre los bancos y las empresas tecnológicas parece más bien una simbiosis que afianza el poder general de las grandes finanzas al ampliar su alcance mediante nuevos actores
P.153 ‘Amazon sigue exigiendo que hagamos clic cada vez en comprar, pero otros están introduciendo plataformas integradas que permiten el pago automático. Por ejemplo, al bajar de un Uber, los centros de datos de la empresa llegan automáticamente a los centros de datos de nuestro banco a través de los centros de datos de Visa o Mastercard y entonces se efectúa el pago.’
P.175 ‘En situaciones en las que el acceso depende de una franja de microdatos dinámicos obtenida mediante una intromisión, el panoptismo puede insertarse en nuestra vida. ¿Qué nuevos datos surgirán de lo que compremos, o de las personas con las que nos relacionemos, o de la velocidad a la que caminemos?’
P.181 ‘Los poderosos leviatanes estatales sostienen un leviatán más amplio que se extiende mas allá del Estado: las sociedades modernas nos someten a sistemas monetarios públicos y privados comunes, gestionados por los bancos, junto con las empresas de telecomunicaciones, las empresas de servicios públicos y, cada vez más, megacorporaciones como Amazon y Uber, que actúan como leviatanes de segundo nivel.’
P.196 Bitcoin ‘Una persona tiene algo parecido a una ‘cuenta’ en esa base de datos abierta. Se llama ‘dirección pública’. Esa dirección pública es un seudónimo-es visible para cualquiera en todo el mundo, pero no lo nombra directamente- y cualquiera en el sistema puede enviarte tokens. Para poder trasladar esos tokens a otra persona, hay que redactar una carta digital para autorizar un cambio e introducirla en un sobre digital cerrado. Hay que firmarla y, para eso, hay que estar en posesión de una clave privada que demuestre que esa persona es la legítima propietaria de la dirección pública que contiene los tokens.
Par redactar y enviar ese mensaje a los tecnocajeros, el usuario habrá descargado un ‘monedero’(que tiene el único propósito de enviar esos sobres digitales al ciberespacio. Los tecnocajeros al recibir los sobres digitales los añaden a una cola de peticiones de cambios en la gran base de datos pública. La tarea de los tecnocajeros es comprobar que las solicitudes son legítimas y a continuación su objetivo será actualizar la base de datos para plasmar los cambios solicitados y por tanto, trasladar esos tokens a la dirección pública de otra persona. Si lo consiguen, se conceden a sí mismo una recompensa.’
P.201 Blockchain ‘Unimos el concepto de sincronización colectiva con el concepto de esculturas cronológicas digitales construidas de forma individual, para crear algo aún más poderoso que los dos conceptos por separado. Los sistemas blockchain están distribuidos, pero esto no significa ‘una escultura digital dividida en partes que se mantienen en diferentes lugares. Significa ‘muchas esculturas diferentes construidas en paralelo en diferentes lugares y sincronizadas para unirlas.’
P.204 Minería ‘Al final, uno de los tecnocajeros lo consigue y, con un grito de victoria, envía la versión actualizada de su escultura, junto con un número determinado de tokens nuevos incorporados, a todos los demás, que deben abandonar sus respectivos intentos, sincronizarse y volver a empezar el proceso.’
P.206 ‘los tokens de bitcoin no son más que cifras escritas, registradas en el sistema blockchain, algo así como un sistema de contabilidad en el que no se contabiliza nada. El objeto y el número son la misma cosa.’
P.209 Bitcoin ‘dada la imagen de mercancía que rodea al bitcoin, los tokens han llegado a dar la sensación de ser objetos de colección de edición limitada, aunque no puedan exhibirse como un amuleto de oro.’
P.210 ‘Cuando practicamos el comercio de contrapartida con coleccionables informáticos, tampoco estamos derribando el orden monetario mundial.’
P.210 ‘Un intento excesivo de reprimir el dinero en efectivo podría inspirar nuevas formas de pago clandestinas. La gran capacidad de contrapartida del bitcoin lo convierte, sin duda, en un candidato para ese puesto, a pesar de su volatilidad.’
P.211 Bitcoin vs Occupy Wall Street. ‘Para los libertarios del mercado libre más recalcitrantes, el capitalismo y sus mercados son casi una especie de deidad (...) Los libertarios del bitcoin suelen decir que el sistema financiero actual es parecido a un catolicismo corrupto, con grandes instituciones -gobiernos y bancos- que median para conseguir acceso al sagrado beneficio mientras distorsionan la voluntad del mercado. Son como la Reforma protestante, en busca de una comunión directa con el mercado. A los izquierdistas de Occupy estos reformistas pueden parecerles capitalistas corporativos disfrazados con otro nombre, puesto que unos y otros aseguran venerar los procesos mercantiles. Pero eso es como decir que Martín Lutero y el papa tienen más cosas en común que elementos que los separan’ Curiosa analogía y también curioso como reparte las mayúsculas el autor (¿Desvelando su puritanismo vestido de progresismo?).
P.214 Bitcoin vs Bitcoin Cash ‘La bifurcación es una práctica fundamental en la cultura del código abierto.(...) Bitcoin Cash comparte el mismo código subyacente que bitcoin y pasó sus años de formación en la misma blockchain del bitcoin, pero se separó de ese pasado común para crear una realidad paralela bajo una nueva marca.’
P.223 Ethereum ‘No hay necesidad de una policía humana porque el código imparable es como la física y sirve de ley y policía a la vez.’
P.234 Monedas estables ‘Un token de Tether era un ‘criptodolar’respaldado por dólares bancarios, parcialmente avalados a su vez por los dólares estatales de la Fed. Estas promesas descentralizadas a cambio de dólares bancarios pasaron a denominarse ‘monedas estables’.
P.241 Euro digital ‘Lo que llamamos ‘dinero en efectivo’ es una moneda física anónima de curso legal emitida por los estados, lo que sugiere que las instituciones estatales están en la mejor posición para emitir una versión digital de este. Esta versión digital del dinero estatal (llamada ‘reservas’) es como la moneda interna de un club privado, mientras que los demás utilizamos la versión física pública.’
P.242 ‘La perspectiva de tener dinero de un banco central sin riesgos podría llevar a decenas de millones de personas a hacer cola para abrir cuentas en dicha entidad.(...) Podría animar a la gente a huir de los bancos comerciales y causar un ‘pánico bancario digital’. Un pánico bancario digital supondría que la gente diera instrucciones a su entidad bancaria comercial correspondiente para que transfiriese dinero digital del Estado a la cuenta recién abierta en el Banco Central, lo que agotaría las reservas de dichas entidades.’ Hace poco leí una noticia sobre el Euro digital en la que se decía que cada persona podría tener un número limitado de € digitales (la cantidad todavía estaba en estudio) precisamente para evitar la quiebra de los bancos comerciales.
P.252 ‘Aceptémoslo. La nube de IA espiritual y trascendente a la que se refieren Kurzweil y sus colaboradores es el conglomerado financiero-corporativo que he expuesto.’
March 31, 2024
It did have some good points in it on describing the push to digital, strong beginning weaker ending.
December 31, 2022
Scott makes the issues understandable and doesn't bore one to death.
December 1, 2024
The war on cash is progressing better than Russia’s war on Ukraine. It is a battle that the banks and state actors are winning, and it’s not a sort of proxy war that exists under our doormats and right under our noses — It is one of which we are active and willing participants. In the war against cash, without us knowing, we are the soldiers armed with banking apps. Having been living in South East Asia, where cash is supposively still king, cash is losing ground even at the level of streetside stalls to admittedly, very convenient QR codes. Cash, it seems, is a nuisance.
But Brett Scott thinks otherwise. Whether we like it or not, cash is a representation of our financial freedom and privacy. And in this light, it is difficult to contradict him. Reading Cloud Money terrifies me more than reading any Stephen King novel. Perhaps it is one of the first books I’ve read which explores our fragile privacy in more detail than I’d like, and it is a stark reminder that in adopting new and convenient ways, we lose the comforts and security which the old ways provided (in this case, our good mate cash).
Scott here uses an apt analogy:
And as much as I fucking hate entitled cyclists taking up the lane and going through red lights, as though they’re not using the fucking road, there are benefits of having bicycles around: they’re green, they’re beneficial for fitness and they’re another avenue to reduce congestion. Living in Kuala Lumpur, where there are more cars than adults, having the option of pedestrian-friendly streets and bike lanes make a lot of sense.
But the banks are trying hard to replace cash to get that precious data of yours: to know what you’re spending your money on, to know when you spend, what sort of customer are you and if you’re worthwhile enough to get a loan. It is also a very profitable information in a digital age becoming increasingly more fragmented and more customised. Cash is king, perhaps, but data is the emperor.
In explaining the importance of cash, Scott also touched upon how money works. This is a subject that I’ve had read about for a long time now, since the 2008 financial crisis when I was still in university. And to tell you the truth, if you ask me to explain how money works, I’d still feel fucking lost. My knowledge wouldn’t be perfect, and I’d have to rely in books like these to pick up information here and there which may be useful, which may not be. Money is elusive as it’s ever been, and like the devil, it is the most dangerous and most tangible fiction humanity had ever created.
What’s money anyway?
Scott’s analogy of the casino is also quite apt — when we trade in our cash money for the casino chips, the chips are not exactly “real” money, but it works as such. It is not something that can be used outside of the casino, but it can be changed for real cash at anytime. PayPal and other payment providers work the same way, as we trade our own money for their proprietary sanctioned method of payment, we are practically using “fake money” to do real cash payment.
“Real money” is sanctioned by the central bank, or the government which backs up the promise of the value of the currency. Without the military behind it, it all is just smoke and mirrors (though we can argue in the first place that the concept of money is no better than said smokes and mirrors). In effect, the cash that we traded in for PayPal cash, or whatever they’re using now, is merely third-rate cash, if we think the money issued by central banks as first-rate.
This distance is important. Private banks would have a direct agreement with central banks in order to change, store and supply money. The question of money supply had flabbergasted economists since the term “economist” existed. Think Keynes and his intellectual battles with Hayek, and the prodigious successor, Friedman. Though banks have these agreements with the government, much of the money is still conjured out of thin air and passed on as credit. Money begets money, until it doesn’t.
The 2008 financial crisis really taught us how thin the ice was, and how heavy the load is, and still is. Yet, in a world getting accustomed to the ice getting ever-thinner, we’ve barely learned our lessons. The collateral debt obligations from banks which assassinated the global economy graduated into more packaged loans which would break the camel’s back when this bubble pops. And if you’re not scared already, you should be.
What are the outs? Should you be taking your cash out of the bank?
Looking for the messiah in the blockchains
With the potential collapse of government backed currencies, we turn to techies for other avenues. The enigmatic Satoshi Nakamoto drafted a new method in constricting the supply of a digital currency by having fixed amount and seeping the supply overtime into circulation. If you haven’t heard about Bitcoin, then you must’ve been living under a rock in the last ten years.
Bitcoin is ruled by mathematics, run on a blockchain which requires immutable consensus of all network and users, yet it also fulfils the conditions of privacy. At a glance, this was an attractive solution to the plights of state-backed currency, and for a while it was. The early adopters of Bitcoin profit exponentially overnight when it hit $20,000 in 2017. Other coins follow suit in its skyrocketing stardom: Ethereum, Neo and Dogecoin (facepalm) just to name a few.
Shortly, anybody with an idea of running a currency in the blockchain could copy its ideas, adjust a few lines of code and sell off their own fictional currency as a road to profitability for willing buyers. And in there lies the issue: that there is no purpose save for short-term gain instead of the belief that the tool is the solution to the long term problem. Anybody seeing these early adopters and crypto-entrepreneurs as the currency messiah would be mistaken.
Overtime, the crypto billionaires, those who had been at the right place at the right time, are themselves converging with the old enemy: the banks and state governments. It wasn’t long before the banks figured out that there is profit to be made and benefits to gain in the blockchain, which led to a situation where countries like Singapore and Kazakhstan fostering cryptolabs to play matchmaker between state, private and cryptocurrency providers. There are no heroes in this story.
Back to basics: back to cash that is
What we are left is perhaps something a bit more innocuous: the possibility of state actors managing the digital finance of its citizen end to end, thus removing the banks as middlemen altogether; or CBDC for short (Central Bank Digital Currency). The implications of this is terrifying, though it is already happening in some countries, that governments will be able to take away privileges based on your spending habits and financial health.
Another potential solution is community-led credit systems, or mutual credit. But these also come with many disadvantages: who’s going to be responsible for collecting pledges? who’s bearing the risk? is anybody going to develop an app for it? And I’ve seen these mutual credit system in countries like Cambodia and have known those who had been burned by borrowers who are unable to repay their credit. I don’t think that this is a great solution either.
The lack of ready solutions if we want to combat the dominance of banks of our end to end financial information means that cash is still the best alternative. The demand of cash is not going away, even though the usage of cash is:
The wealthy, we know, have been stocking up on cash like crazy. Images of piles of cash languishing away in pallets a la Walter White comes to mind. But I don’t know many people now storing their cash under their mattress. The argument for cash is a compelling one: my transaction accounts expose my habits and flaws (or strengths, for that matter), but as Scott mentions, having cash allows us to keep our imperfections more discrete.
---
Adapted from the Medium Blog, which you can find here along with my other rants on other books.
But Brett Scott thinks otherwise. Whether we like it or not, cash is a representation of our financial freedom and privacy. And in this light, it is difficult to contradict him. Reading Cloud Money terrifies me more than reading any Stephen King novel. Perhaps it is one of the first books I’ve read which explores our fragile privacy in more detail than I’d like, and it is a stark reminder that in adopting new and convenient ways, we lose the comforts and security which the old ways provided (in this case, our good mate cash).
Scott here uses an apt analogy:
“Partisans with anti-cash agenda paint cash as impendiment — blocking the road for the fast cars seeking to overtake it. Yet there is no conflict in maintaining both systems. The closest transport analogy for cash is the bicycle, and ‘going cashless’ is like closing down bike lanes that run parallel in a city of cars.”
And as much as I fucking hate entitled cyclists taking up the lane and going through red lights, as though they’re not using the fucking road, there are benefits of having bicycles around: they’re green, they’re beneficial for fitness and they’re another avenue to reduce congestion. Living in Kuala Lumpur, where there are more cars than adults, having the option of pedestrian-friendly streets and bike lanes make a lot of sense.
But the banks are trying hard to replace cash to get that precious data of yours: to know what you’re spending your money on, to know when you spend, what sort of customer are you and if you’re worthwhile enough to get a loan. It is also a very profitable information in a digital age becoming increasingly more fragmented and more customised. Cash is king, perhaps, but data is the emperor.
In explaining the importance of cash, Scott also touched upon how money works. This is a subject that I’ve had read about for a long time now, since the 2008 financial crisis when I was still in university. And to tell you the truth, if you ask me to explain how money works, I’d still feel fucking lost. My knowledge wouldn’t be perfect, and I’d have to rely in books like these to pick up information here and there which may be useful, which may not be. Money is elusive as it’s ever been, and like the devil, it is the most dangerous and most tangible fiction humanity had ever created.
What’s money anyway?
Scott’s analogy of the casino is also quite apt — when we trade in our cash money for the casino chips, the chips are not exactly “real” money, but it works as such. It is not something that can be used outside of the casino, but it can be changed for real cash at anytime. PayPal and other payment providers work the same way, as we trade our own money for their proprietary sanctioned method of payment, we are practically using “fake money” to do real cash payment.
“Real money” is sanctioned by the central bank, or the government which backs up the promise of the value of the currency. Without the military behind it, it all is just smoke and mirrors (though we can argue in the first place that the concept of money is no better than said smokes and mirrors). In effect, the cash that we traded in for PayPal cash, or whatever they’re using now, is merely third-rate cash, if we think the money issued by central banks as first-rate.
This distance is important. Private banks would have a direct agreement with central banks in order to change, store and supply money. The question of money supply had flabbergasted economists since the term “economist” existed. Think Keynes and his intellectual battles with Hayek, and the prodigious successor, Friedman. Though banks have these agreements with the government, much of the money is still conjured out of thin air and passed on as credit. Money begets money, until it doesn’t.
The 2008 financial crisis really taught us how thin the ice was, and how heavy the load is, and still is. Yet, in a world getting accustomed to the ice getting ever-thinner, we’ve barely learned our lessons. The collateral debt obligations from banks which assassinated the global economy graduated into more packaged loans which would break the camel’s back when this bubble pops. And if you’re not scared already, you should be.
What are the outs? Should you be taking your cash out of the bank?
Looking for the messiah in the blockchains
With the potential collapse of government backed currencies, we turn to techies for other avenues. The enigmatic Satoshi Nakamoto drafted a new method in constricting the supply of a digital currency by having fixed amount and seeping the supply overtime into circulation. If you haven’t heard about Bitcoin, then you must’ve been living under a rock in the last ten years.
Bitcoin is ruled by mathematics, run on a blockchain which requires immutable consensus of all network and users, yet it also fulfils the conditions of privacy. At a glance, this was an attractive solution to the plights of state-backed currency, and for a while it was. The early adopters of Bitcoin profit exponentially overnight when it hit $20,000 in 2017. Other coins follow suit in its skyrocketing stardom: Ethereum, Neo and Dogecoin (facepalm) just to name a few.
Shortly, anybody with an idea of running a currency in the blockchain could copy its ideas, adjust a few lines of code and sell off their own fictional currency as a road to profitability for willing buyers. And in there lies the issue: that there is no purpose save for short-term gain instead of the belief that the tool is the solution to the long term problem. Anybody seeing these early adopters and crypto-entrepreneurs as the currency messiah would be mistaken.
Overtime, the crypto billionaires, those who had been at the right place at the right time, are themselves converging with the old enemy: the banks and state governments. It wasn’t long before the banks figured out that there is profit to be made and benefits to gain in the blockchain, which led to a situation where countries like Singapore and Kazakhstan fostering cryptolabs to play matchmaker between state, private and cryptocurrency providers. There are no heroes in this story.
Back to basics: back to cash that is
What we are left is perhaps something a bit more innocuous: the possibility of state actors managing the digital finance of its citizen end to end, thus removing the banks as middlemen altogether; or CBDC for short (Central Bank Digital Currency). The implications of this is terrifying, though it is already happening in some countries, that governments will be able to take away privileges based on your spending habits and financial health.
Another potential solution is community-led credit systems, or mutual credit. But these also come with many disadvantages: who’s going to be responsible for collecting pledges? who’s bearing the risk? is anybody going to develop an app for it? And I’ve seen these mutual credit system in countries like Cambodia and have known those who had been burned by borrowers who are unable to repay their credit. I don’t think that this is a great solution either.
The lack of ready solutions if we want to combat the dominance of banks of our end to end financial information means that cash is still the best alternative. The demand of cash is not going away, even though the usage of cash is:
“Overall cash usage has grown, but cash usage for transaction has, in relative terms, declined in almost all countries, sometimes drastically. People still want cash but — often — as a way of keeping their money outside the banking sector.”
The wealthy, we know, have been stocking up on cash like crazy. Images of piles of cash languishing away in pallets a la Walter White comes to mind. But I don’t know many people now storing their cash under their mattress. The argument for cash is a compelling one: my transaction accounts expose my habits and flaws (or strengths, for that matter), but as Scott mentions, having cash allows us to keep our imperfections more discrete.
---
Adapted from the Medium Blog, which you can find here along with my other rants on other books.
December 31, 2023
I concetti del libro possono essere condivisibili, tuttavia non ho apprezzato il modo dell’autore di scrivere, a volte a mio parere cerca di trasmetterti i suoi concetti in modo più “umano” e non portando reali statistiche.
September 1, 2024
這一本《AI時代的現金戰爭》出版於2022年，英文名稱比較能傳達書的主旨(Cloudmoney: Cash, Cards, Crypto and the War for our Wallets)，本書深入探討今天整個金融體系如何運作。先說結論，雖然自己對金融不陌生，這本書依然讓我學到很多新知識，它把零散的金融概念整合在「支付」這個主題上，讓讀者了解整個支付產業鏈的幕後祕辛。金融業是資本主義的成果，它的本質就是「移動資金，抽取手續費，使資本有效率的流通」，可以用一句話概括。但人類社會很複雜，所以一個簡單的動作就會產生各種變形，中間機構想辦法從中收取更高比例的”租金”(經濟學用語叫rent)，害金融消費者付出高昂的成本才能完全一個簡單的支付行為。
原始人類最初的支付是以物易物，後來隨著文明進步，商業行為日趨複雜，就產生了貨幣，用鈔票和貨幣承載價值，隨著科技進展，人們漸漸改用信用卡，現在又變成用行動支付。不管是科技公司或金融機構，他們都希望扮演資金移動的中介機構，中介機構的存在就是建立一個讓陌生人可以互相信任的框架，讓彼此的資金順暢的移轉，金融機構也已經成為社會運作的基礎建設。這個產產業有很誘人的利潤，根據尼爾森統計，三間信用卡公司Visa、Mastercard、UnionPay就佔據全球購物交易量的39%、24%、34%，難以想像全世界的購物金流都要經過少數幾間公司的作業系統，但這種高度集中的支付體系正是當今的事實，所以如果其中一間資安系統有漏洞，可能就會導致數億百筆交易遭受影響，嚴重的話也可能使全球陷入停擺。
2015年開始，Visa公開宣稱要讓世界在2020年以前逐步淘汰現金交易，相信你也有看過廣告，表示現金是一種病毒和細菌的傳染媒介，儘管研究指出日常用品可能比現金還髒，但這個公關宣傳成為歷史上最成功的PR案例研究，適逢Covid-19推波助瀾，它成功讓幾乎全世界的人都相信了現金是一種過時且骯髒的歷史遺留物，進入數位時代理應全面淘汰。它也宣揚現金會導致犯罪行為，例如難以追蹤洗錢的金流等。
這正是本書作者試圖破解的迷思! 本書作者布萊特．史考特以前在倫敦金融城工作過，對於金融體系有第一手的見解，他是金融業的另類人類學家/記者/作家，用白話方式向讀者解釋隱藏於金融體系背後不欲人知的真相。史考特目前是英國金融創新實驗室的高級研究員，這是一間研究金融議題的智庫。他這本書的論點讓人耳目一新，因為他反其道而行，他提倡在益發數位化的時代，更應該努力保留現金這種古老的交易方式，因為現金的存在對於窮人來說很重要，現金是開發中國家和貧窮人口賴以維生的金融工具，若將其廢除，反而會讓他們被排除於金融體系之外，造成更嚴重的資源不均。
史考特的論證非常扎實，他引用了學術研究和多方來源，論述現金的好處。他打了一個比喻，雖然現在已經有高鐵和汽車，你應該不會希望腳踏車徹底消失吧? 腳踏車對很多人來說是最方便的出行工具，對於全球暖化也有好處，只因為汽車的速度最快，就廢止腳踏車，似乎有違比例原則。史考特想要證明一件事，就是將現金妖魔化是大型科技公司和金融機構有意為之，因為當現金消失了，所有人就都要轉而依靠中介機構，這些企業體就能強化對於經濟體系的掌控。在極權國家，政府也在背後扮演推手，因為這樣就可以更容易掌控人民的一舉一動。試想一下，當一間銀行掌握了你每一分錢的動態，就有機會任意的限制一個人的所有行為，例如對中小企業中止借貸，放任其破產，只要它評估這樣可以利潤最大化。
本書後半段也有介紹加密貨幣，區塊鏈是一種去中心化的機制，它帶動了2010年代至今的另一波”貨幣戰爭”，各國中央銀行也開始研擬央行數位貨幣的可行性，這些很前緣的趨勢都可以在書中讀到。作者對未來持謹慎的態度，他提醒區塊鏈雖然理論上有顛覆的潛能，但他看到的是既有的金融體系正在積極將這項技術納入旗下，國際級的金融機構希望用這項技術進一步擴充版圖，因此換湯不換藥，金融體系有可能終究仍為少數的公司或機構所掌控。正因如此，現金的重要性不言可喻，他希望讀者能夠理解現金的地位，並呼籲政府當局保護好現金的存在，才能讓人民享受更全面的金融服務。
若你想讀比較技術性的分析，可參考〈In defence of cash: a review of Brett Scott's 'Cloudmoney'〉一文，評論者是一間英國的智庫Autonomy Institute，專門研究經濟政策，希望透過報告和諮詢打造更理想的社會，讓世界離烏托邦更進一點。
原始人類最初的支付是以物易物，後來隨著文明進步，商業行為日趨複雜，就產生了貨幣，用鈔票和貨幣承載價值，隨著科技進展，人們漸漸改用信用卡，現在又變成用行動支付。不管是科技公司或金融機構，他們都希望扮演資金移動的中介機構，中介機構的存在就是建立一個讓陌生人可以互相信任的框架，讓彼此的資金順暢的移轉，金融機構也已經成為社會運作的基礎建設。這個產產業有很誘人的利潤，根據尼爾森統計，三間信用卡公司Visa、Mastercard、UnionPay就佔據全球購物交易量的39%、24%、34%，難以想像全世界的購物金流都要經過少數幾間公司的作業系統，但這種高度集中的支付體系正是當今的事實，所以如果其中一間資安系統有漏洞，可能就會導致數億百筆交易遭受影響，嚴重的話也可能使全球陷入停擺。
2015年開始，Visa公開宣稱要讓世界在2020年以前逐步淘汰現金交易，相信你也有看過廣告，表示現金是一種病毒和細菌的傳染媒介，儘管研究指出日常用品可能比現金還髒，但這個公關宣傳成為歷史上最成功的PR案例研究，適逢Covid-19推波助瀾，它成功讓幾乎全世界的人都相信了現金是一種過時且骯髒的歷史遺留物，進入數位時代理應全面淘汰。它也宣揚現金會導致犯罪行為，例如難以追蹤洗錢的金流等。
這正是本書作者試圖破解的迷思! 本書作者布萊特．史考特以前在倫敦金融城工作過，對於金融體系有第一手的見解，他是金融業的另類人類學家/記者/作家，用白話方式向讀者解釋隱藏於金融體系背後不欲人知的真相。史考特目前是英國金融創新實驗室的高級研究員，這是一間研究金融議題的智庫。他這本書的論點讓人耳目一新，因為他反其道而行，他提倡在益發數位化的時代，更應該努力保留現金這種古老的交易方式，因為現金的存在對於窮人來說很重要，現金是開發中國家和貧窮人口賴以維生的金融工具，若將其廢除，反而會讓他們被排除於金融體系之外，造成更嚴重的資源不均。
史考特的論證非常扎實，他引用了學術研究和多方來源，論述現金的好處。他打了一個比喻，雖然現在已經有高鐵和汽車，你應該不會希望腳踏車徹底消失吧? 腳踏車對很多人來說是最方便的出行工具，對於全球暖化也有好處，只因為汽車的速度最快，就廢止腳踏車，似乎有違比例原則。史考特想要證明一件事，就是將現金妖魔化是大型科技公司和金融機構有意為之，因為當現金消失了，所有人就都要轉而依靠中介機構，這些企業體就能強化對於經濟體系的掌控。在極權國家，政府也在背後扮演推手，因為這樣就可以更容易掌控人民的一舉一動。試想一下，當一間銀行掌握了你每一分錢的動態，就有機會任意的限制一個人的所有行為，例如對中小企業中止借貸，放任其破產，只要它評估這樣可以利潤最大化。
本書後半段也有介紹加密貨幣，區塊鏈是一種去中心化的機制，它帶動了2010年代至今的另一波”貨幣戰爭”，各國中央銀行也開始研擬央行數位貨幣的可行性，這些很前緣的趨勢都可以在書中讀到。作者對未來持謹慎的態度，他提醒區塊鏈雖然理論上有顛覆的潛能，但他看到的是既有的金融體系正在積極將這項技術納入旗下，國際級的金融機構希望用這項技術進一步擴充版圖，因此換湯不換藥，金融體系有可能終究仍為少數的公司或機構所掌控。正因如此，現金的重要性不言可喻，他希望讀者能夠理解現金的地位，並呼籲政府當局保護好現金的存在，才能讓人民享受更全面的金融服務。
若你想讀比較技術性的分析，可參考〈In defence of cash: a review of Brett Scott's 'Cloudmoney'〉一文，評論者是一間英國的智庫Autonomy Institute，專門研究經濟政策，希望透過報告和諮詢打造更理想的社會，讓世界離烏托邦更進一點。
November 8, 2022
I read this book with the curiosity of what the author's perspective is on the various means our monetary transactions are conducted. Just midway into it, I realised he is just trying to make his point that he is against techno based methods in transacting especially when oligopolies and states control dominate the system. I suppose there are similar minds belonging to the same flock, which I respect as individual choices. Nevertheless, the global monetary system which is similar to a nervous system connecting to different parts of the brain, with more network-based media (cash, cards, tokens etc) regulated by banks and intermediaries, is undeniably efficient and applicable to the advancement of human society and needs.
Comparing the author's utopia of the monetary system to mankind's transportation system ... I doubt the preference for horse and cart riding as a means of transport is definitely not popular compared with transport on motor vehicles or air planes.
Comparing the author's utopia of the monetary system to mankind's transportation system ... I doubt the preference for horse and cart riding as a means of transport is definitely not popular compared with transport on motor vehicles or air planes.
January 5, 2023
Incredibly disappointing, especially given the rave reviews by Stephanie Kelton and Kate Raworth, two economists I have immense regard for (perhaps less so now, given their reviews of this truly terrible book). Brett Scott has no skill in writing, and makes everything far more complicated by resorting to absurd metaphors that you have to try to map back on to the concepts he's trying to describe.
July 7, 2024
3.5
reiterates two statements that i feel strongly about:
- cash is king :)
- not everything needs to be an app
pretty sweet introductory and accessible text on the fusion of big tech and big finance. the crypto section was a clear explanation that didn't get tangled up too much. on the other hand, the author does love his metaphors, parables etc. perhaps a bit too often. a touch repetitive at times as well.
reiterates two statements that i feel strongly about:
- cash is king :)
- not everything needs to be an app
pretty sweet introductory and accessible text on the fusion of big tech and big finance. the crypto section was a clear explanation that didn't get tangled up too much. on the other hand, the author does love his metaphors, parables etc. perhaps a bit too often. a touch repetitive at times as well.
August 21, 2022
I give this book 2 stars moreso for my rating system of if I’d reread it rather than the contents of the book. I’m in the financial world everyday as interest and work, so to me, this just felt like a really long intro that didn’t quite get anywhere.
September 27, 2022
His ideas needed at most 10 pages. The rest is rambling and simpleton allegories to make it to 175 pages. Very frustrating to read and I found myself skipping countless paragraphs when he bragged about his travels, encounters and uninteresting stories that are more or less related to the topic.
April 16, 2024
A good introduction to financial systems, he does a good job of explaining complex concepts in simple terms using metaphors. Potentially too many metaphors and not enough actual substance about the war on cash
November 26, 2024
"Cloudmoney" tells people with fears of overreach and powerlessness: You're not alone. Brett Scott has identified "cash" as worthy of preservation, threatened by an ominous them. They never bodes well for journalism.
They encompasses credit card companies, banks, central banks, and Big Tech. Scott isn't against FinTech, or capitalism, or any technology in particular that the poor are getting lured into against their own best interest. Scott goes to great lengths to imply darker motives, such as disdain for the poor up to outright racism founded in colonial roots.
The arguments are one-sided and veer into personal preferences and anecdotes. See this typical quote: Generalizing, then launching into an unrelated grievance and insinuating a racist conspiracy:
One star for good explanations - Scott is a gifted user of metaphors. Unfortunately, he uses them neither objectively nor constructively.
They encompasses credit card companies, banks, central banks, and Big Tech. Scott isn't against FinTech, or capitalism, or any technology in particular that the poor are getting lured into against their own best interest. Scott goes to great lengths to imply darker motives, such as disdain for the poor up to outright racism founded in colonial roots.
The arguments are one-sided and veer into personal preferences and anecdotes. See this typical quote: Generalizing, then launching into an unrelated grievance and insinuating a racist conspiracy:
Almost all financial inclusion initiatives present digital technology as a great leap forward, that will enable unbanked to get banked. Not mentioned, however, is that the economic risk-return equation is only half of a bigger equation: while banks may not like poor people unless they can dealing with them profitable, poor people had no practical reason to like banks either.
One part of the reason is practical: Historically, the average size of their transaction was so small as to make writing a cheque or requesting bank transfers an unnecessary or even embarrassing process, especially in situations where they might only buy essential goods within a small radius from where they live.
Another part is political: I was a boy at the tail end of the apartheid regime in South Africa, notorious for its discrimination. At this time, my parents opened a special children's account for me at the "Standard Bank", one of the country's most prominent financial institutions. I remember the branches full of white people, while the black people stood outside. Gradually, as South Africa moved into its post-Apartheid phase, the number of black customers increased. But those who were illiterate were treated with condescension. For an elderly Zulu man, who had spent his formative years as a laborer for a South African mining corporation, there was no reason to feel trusting towards financial institutions. This same pattern is found the world over.
One star for good explanations - Scott is a gifted user of metaphors. Unfortunately, he uses them neither objectively nor constructively.
January 6, 2023
This is a clearly written introduction to digitalisation of money. The author writes from a left-wing perspective and is explicit in his support for cash as state money, as opposed to other digital forms (maybe except potential CBDC). Scott sees cash as a way to hide from the all-seeing eye of the corporate capitalism that is increasingly merging big tech with big finance and tries to encourage moving away from cash.
The book clearly explains differences between cash, deposits, and reserves. These types of money are then compared to recent crypto innovations like Bitcoin or Ethereum, eventually moving to the potential crypto killer app (i.e. stablecoins) and state-issued CBDCs. This is not a dry technical read, but it is written in a journalistic manner with interesting characters and events being portrayed. I found lots of interesting nuggets of knowledge in this book that are hard to find in other literature on the topic. One of those was a quote from the The Handmaid's Tale about removing cash as a precursor of totalitarian state. Also, quite interesting to read about conspiracy theorists embracing the case for cash, thus leaving this area increasingly in the sphere of interest of the (far) right.
The book clearly explains differences between cash, deposits, and reserves. These types of money are then compared to recent crypto innovations like Bitcoin or Ethereum, eventually moving to the potential crypto killer app (i.e. stablecoins) and state-issued CBDCs. This is not a dry technical read, but it is written in a journalistic manner with interesting characters and events being portrayed. I found lots of interesting nuggets of knowledge in this book that are hard to find in other literature on the topic. One of those was a quote from the The Handmaid's Tale about removing cash as a precursor of totalitarian state. Also, quite interesting to read about conspiracy theorists embracing the case for cash, thus leaving this area increasingly in the sphere of interest of the (far) right.
June 23, 2022
Brett Scott has written a timely and absorbing book on money, how it is being used by banks and fintech organisations to harvest the consumer and why cash seems to be the only obstacle in their drive for supremacy.
This is a well-written work that excellently describes the numerous forms of digital 'money', how the banks (including Central Banks) are working to make cash obsolete and why they are doing so.
I particularly liked the chapters on cryptos (I don't like the term crypto currencies as they are not) and blockchain developers. It properly shows cryptos are just numbers but hyped beyond reality by those (mainly libertarians) who wish to substitute their agenda and power structures for the nation state and their fiat currencies.
It is a book I can recommend to anyone interested in how the world is fast becoming dominated by the massive corporations from USA to China that exploit the power of the internet and collectivisation of information for massive profit and control over individuals that become mere fodder.
It is not a heartening book - reality is not that heartening in this context. Cash appears doomed and wishful thoughts do not abound as the power of the corporation in advanced nations seems too strong.
I learned a lot from David Graeber's book - Debt: The first 5000 years - and it is good to see him so revered by Brett.
This is a well-written work that excellently describes the numerous forms of digital 'money', how the banks (including Central Banks) are working to make cash obsolete and why they are doing so.
I particularly liked the chapters on cryptos (I don't like the term crypto currencies as they are not) and blockchain developers. It properly shows cryptos are just numbers but hyped beyond reality by those (mainly libertarians) who wish to substitute their agenda and power structures for the nation state and their fiat currencies.
It is a book I can recommend to anyone interested in how the world is fast becoming dominated by the massive corporations from USA to China that exploit the power of the internet and collectivisation of information for massive profit and control over individuals that become mere fodder.
It is not a heartening book - reality is not that heartening in this context. Cash appears doomed and wishful thoughts do not abound as the power of the corporation in advanced nations seems too strong.
I learned a lot from David Graeber's book - Debt: The first 5000 years - and it is good to see him so revered by Brett.
August 2, 2022
Really enjoyed this - lots to take in, and I'd want to read it again to check my understanding, but that's more down to my fuzzy brain and not the author's writing, which is very clear and concise.
The book pretty much turns upside-down conventional understanding of what money "is"; it being, broadly speaking, "debt" (banks lending money into existence), and it being backed by nothing other than government promises. It then moves on to discuss "cash", and how it renders transactions less legible, and the importance of this. Being a big proponent of illegibility, this resonated unsurprisingly hard with me; there's also a long discussion on how we're being "nudged" into using less and less cash, in favour of the convenience of cards, especially contactless - and how much of a boon Covid was to the global financial industry in that respect.
There's also a discussion of cryptocurrency, which I will go back and read again; it's something I don't really understand, but the impression I came away with was that it's not really currency in any form we're familiar with, as it's pegged to "actual" currency - more like a very environmentally-damaging collectible, more like owning stocks than having "cash".
Recommended.
The book pretty much turns upside-down conventional understanding of what money "is"; it being, broadly speaking, "debt" (banks lending money into existence), and it being backed by nothing other than government promises. It then moves on to discuss "cash", and how it renders transactions less legible, and the importance of this. Being a big proponent of illegibility, this resonated unsurprisingly hard with me; there's also a long discussion on how we're being "nudged" into using less and less cash, in favour of the convenience of cards, especially contactless - and how much of a boon Covid was to the global financial industry in that respect.
There's also a discussion of cryptocurrency, which I will go back and read again; it's something I don't really understand, but the impression I came away with was that it's not really currency in any form we're familiar with, as it's pegged to "actual" currency - more like a very environmentally-damaging collectible, more like owning stocks than having "cash".
Recommended.
August 17, 2023
Definitely an incredible read, but missed the mark on the entire premise of the book in my opinion, which was keeping cash in our current economic system, and here's why:
The cash he so passionately defends in his book could so easily be taken away by governments in other ways than by just outright taking it from our possession, they could just outlaw it at any time, and it will no longer be usable.
With that being said, I think his argument against digital cash can be the same against physical cash, so long as that physical cash is issued by the same entity creating and distributing the digital cash.
Any fiat currency whether it be physical or digital is innately confiscatable, so either one would have to use a paper or coin money system that is backed by something of intrinsic value say by gold or Bitcoin in order for the author to achieve his true point that he was trying to make in this book.
I too believe in some form of physical monetary representation, but if both the physical and digital versions of it are created by the same entity... what's the difference?
The cash he so passionately defends in his book could so easily be taken away by governments in other ways than by just outright taking it from our possession, they could just outlaw it at any time, and it will no longer be usable.
With that being said, I think his argument against digital cash can be the same against physical cash, so long as that physical cash is issued by the same entity creating and distributing the digital cash.
Any fiat currency whether it be physical or digital is innately confiscatable, so either one would have to use a paper or coin money system that is backed by something of intrinsic value say by gold or Bitcoin in order for the author to achieve his true point that he was trying to make in this book.
I too believe in some form of physical monetary representation, but if both the physical and digital versions of it are created by the same entity... what's the difference?
August 15, 2024
Maybe you're someone who hasn't put much thought into currency before. I'm talking about currency in the philosophical sense of pondering why we pay for things in the way we do. Or maybe you're someone who has thought a lot about it and you're concerned where it's headed; i.e cryptocurrency. This book provides an exploration through both scenarios. Brett Scott will take you on a journey through the recent history of currency: from cash to crypto (as the title implies). But more than that, he'll make you think about why we do currency the way we do. He does have an agenda with this book; one that takes the form of a warning. Cloudmoney sounds the alarm for a bleak version of a potential future: one where big corporations - not necessarily restrained to finance and tech - are the ones who control our lives in even greater ways than they already do. While I didn't care for some of his examples, I think Scott does a good job at breaking down complex systems that make this book accessible to a wide audience.
December 10, 2022
Do we really want to use credit card or digital cash? Is that motivation coming from implicit big financial institutions’ scheme that invading us without being known as capitalism? What if we are subject to those financial institutions rather than the government protection? This book reminded me of such a kind of conspiracy theory like but the very urgent question, how we can be free from being tethered by inhumane capitalism. If you want to know more about the counteracts or solutions to tackle the system with crypto (to be honest I first thought the title cloud money is the crypto itself, but not. The author explained the definition in very details), maybe this is not the one, not so pragmatic, but still much worthwhile to read. We may need to come back to our origin; can we survive and improve our life without monetary system? Expansion in financial term is not the necessity, but we always forget about that simple fact.
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