[beefield]

The real benefit to get rid of cash would be to allow properly negative interest rates.[1] At the same time I fully agree with the privacy worries on going cashless.

So, what we really need are anonymous physical tokens whose value can change over time. Easy solution is to just tale the current bills and say that after one year, unless deposited to bank before that, are worth only 90% of the face value. But with current technological capabilities, and if someone would actually be interested, we should be able to come up with way better solutions. Solutions that actually make it easier to pay with these anonymous tokens than current cash.

[1] I know. This is far from intuitive to accept. It took me literally months to accept that negative rates make any sense after the first negative yields popped up. To help you understand, let's say I have a fresh apple and you want to have an apple today. In the textbook case I am willing to give it to you today, if you give me tomorrow two apples, because I prefer also to have an apple today compared to having ot tomorrow. This is fine, but what about me having a big basket of apples about to rot, and willing to have also some apples in the winter? There is no law of nature saying that there should be someone willing to give me more apples next winter if I give them to him today. In this case it is easy to see that a negative interest should apply to lending of apples. And it should be economics 101 to understand that artificially limiting prices will often cause welfare losses.

[throwawayjava]

oh. I always had trouble imagining a mainstream use case for cryptocurrency. Apparently, the use case that it'll finally find is providing infrastructure for negative interest rates set by central banks.

Quite ironic ;-p

[tom_mellior]

Money is not apples, money in a bank account doesn't rot. Why make it rot artificially? You don't explain.

[beefield]

That was to illustrate that it is possible that people prefer consumption in the future. To your question why to make money rot has many answers.

But the easiest one is that if you belong to those who believe that central banks actually have a useful role in managing the economy, then why restrict artificially the main tools central banks have in their disposal, i.e. interest rates?

[tom_mellior]

The difference between nonnegative and negative interest rates is "the central bank is not allowed to steal from me" vs. "the central bank is allowed to steal from me". That distinction is not an artificial restriction.

And yes, I understand that "the economy" might want me to spend money now on crap that I would not prefer to buy right now. I just don't agree that that is a valid reason to legalize stealing from me.

[beefield]

I fully agree that it feels wrong and weird that you would give your money to a bank and get less money back later. But if I stop and think a bit further, that feeling starts to feel less and less justified. Here are a couple of reasons:

1. We talk about nominal values, not real purchase power. You should not care what is the number on your bank account but how many apples you can buy it. And with that measure, banks have been "stealing" your purchase power almost always. (Actually I think it is impossible in the long term to have banks pay more than inflation rate)

2. Assuming you save 100 dollars and expect to have 101 dollars in one year's time, central bank can decide to lower the interest rates so that you have less than 101 dollars one year later. Why would central bank "taking" from your 101 to 100 be any less stealing than from 100 to 99?

3. Finally, you agreeing to lend your money to the bank with whatever interest rate bank offers is completely voluntary action from your side. Not only you can choose to consume the money immediately, there are also practically limitless other opportunities to invest (or "invest"...) your money. Corporate debt, real estate, equity, cryptocurrency, gold, commodities etc. Now, of course, you can argue that these other options are somehow less practical or more risky in certain ways, and that society needs to keep your hand and guarantee you a risk-free and practical way to move your consumption decisions over time. And that society needs to make this guarantee to you completely regardless of the welfare cost (unemployment, recessions etc) delivering this guarantee has. At this point, my nose is starting to detect the repulsive smell of socialism, totalitarianism or something like that...

[tom_mellior]

1. As you say yourself, nominal values and purchasing power are different concepts. So why should we treat them the same?

2. If I have a contract saying I will get that extra dollar, I absolutely expect to get it and will take the bank to court if I don't. If I only hope for that, it's different. But in any case, my contract is with my bank, not the central bank.

3. It's not voluntary if cash is effectively useless and I must use a bank.

The rest of your post is just bizarre. Standing up for property rights isn't socialist. I don't think this thread is going anywhere, so I'm out. I hope you have a great day.