{"id":24675,"date":"2022-01-20T17:52:43","date_gmt":"2022-01-20T17:52:43","guid":{"rendered":"https:\/\/kinesis.money\/?p=24675"},"modified":"2023-08-04T14:45:05","modified_gmt":"2023-08-04T14:45:05","slug":"this-is-why-cash-is-dying-out","status":"publish","type":"post","link":"https:\/\/kinesis.money\/pt-br\/nao-categorizado\/this-is-why-cash-is-dying-out\/","title":{"rendered":"This Is Why Cash Is Dying Out"},"content":{"rendered":"\n<p class=\"is-style-default\">Preserving the use of cash at first seems like a project doomed to fail, and one that exists in opposition to the progressive, accelerating use of digital currencies, such as crypto.<\/p>\n\n\n\n<p class=\"is-style-default\">So, who is it that\u2019s seeking to prevent the supposed \u201cdeath\u201d of cash?&nbsp;<\/p>\n\n\n\n<p class=\"is-style-default\">You would be surprised to know that it&#8217;s not just traditionalists or technological Luddites, but there are many with diverse agendas determined to keep their cash firmly in hand.<\/p>\n\n\n\n<p class=\"is-style-default\">In this article, we explore the beginnings of money, its evolution and whether cash will survive in the wake of fintech, and digitised monetary solutions.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-the-beginning-of-money\"><strong>The Beginning of Money<\/strong><\/h2>\n\n\n\n<p class=\"is-style-default\">Before the existence of money, the bartering system was firmly in place. This system of trade worked if both parties were interested in exchanging for what the other had to offer. While this clearly functioned well when individuals were trading like for like (i.e apples for oranges), this didn\u2019t work if one party clearly benefited more than the other.&nbsp;<\/p>\n\n\n\n<p class=\"is-style-default\">Replacing the bartering system, came with the intention to overcome this issue. As a result, the idea of commodity money was born, in which the valuation of money was determined by the commodity it was made from.&nbsp;<\/p>\n\n\n\n<p class=\"is-style-default has-link-color wp-elements-e92c1fef8b4caf64924522e67a3bacb0\">Commodities like precious metals, acted as <em>the <\/em>monetary solution for a time, being an effective store of value and unit of account. However, the numerous qualities of <a href=\"https:\/\/kinesis.money\/blog\/is-gold-a-good-investment\/\" target=\"_blank\" rel=\"noreferrer noopener\">physical gold<\/a> or silver, for example, were greatly outweighed by a major quality inherent to money: its portability.&nbsp;<\/p>\n\n\n\n<p class=\"is-style-default\">As a physical bar or coin, it was not practical nor logical to trade gold in this way, especially when making frequent daily trades. This signalled the need for an alternative &#8211; although, as we will uncover, one which carries significant flaws.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Paper Money Was Born<\/strong><\/h2>\n\n\n\n<p class=\"is-style-default\">The normative system of money that currently operates today is known as <strong>representative<\/strong> money, in which money is just that: a representation of value that is universally accepted by all who use it. It began with certification issued by a central authority, which enabled the exchange of a \u2018note\u2019 for commodities, such as gold or silver.&nbsp;<\/p>\n\n\n\n<p class=\"is-style-default\">China was the first known country to begin issuing IOU certificates on paper for trading on a global scale. This category of money is also known as \u201cfiat currency\u201d, which would set the tone for the current banking model.&nbsp;<\/p>\n\n\n\n<p class=\"is-style-default\">Banking became mainstream in the 19th century, and more specifically <strong>fractional reserve banking &#8211; <\/strong>a protocol on which most developed nations operate. This protocol dictated that banks only need to keep a small portion of the money they issued, and the rest could be issued via loans, for example.&nbsp;&nbsp;&nbsp;<\/p>\n\n\n\n<p class=\"is-style-default\">However, the major pitfalls of the fiat system came to light most recently during the 2007-8 financial crisis, which created shockwaves still felt today. After excessive lending, governments had to borrow billions of taxpayers&#8217; money to bail out the banks, which increased the total supply of fiat money, and led to their overall depreciation in value.<\/p>\n\n\n\n<p class=\"is-style-default has-link-color wp-elements-3681c9ea5dff26b14b4c4800d3efc5e9\">What\u2019s more, this crisis was enabled by the fact that the dollar, at the heart of the crisis, was not tied to any commodity, and hence, held no intrinsic value. Prior to the crash, Nixon saw an end to the<a href=\"https:\/\/kinesis.money\/blog\/50-years-anniversary-bretton-woods-agreement\/\" target=\"_blank\" rel=\"noreferrer noopener\"> gold standard in 1973<\/a>, which meant that American citizens could no longer trade their dollars for gold bullion.&nbsp;<\/p>\n\n\n\n<p class=\"is-style-default\">From this moment onwards, the world continued trading in dollars (USD), British pounds (GBP), and other fiat currencies, but without the backing of anything with intrinsic value or being pegged to any commodity.<\/p>\n\n\n\n<p class=\"is-style-default has-link-color wp-elements-f21b159b3dad61b083a1e134515abe77\">Today, countries such as America and the UK, are now seeing the devastating effects caused by a reliance on fiat currency, and the cataclysmic issue with the current economic model as a whole. As of the latest inflation data, the CPI index currently rests at <a href=\"https:\/\/www.swfinstitute.org\/news\/90647\/u-s-inflation-is-the-highest-in-40-years\" target=\"_blank\" rel=\"noreferrer noopener\">7% in the US<\/a>, which is the highest level of<a href=\"https:\/\/kinesis.money\/blog\/protect-your-savings-from-inflation-guide\/\" target=\"_blank\" rel=\"noreferrer noopener\"> inflation<\/a> America has seen in the last 40 years.&nbsp;<\/p>\n\n\n\n<p class=\"is-style-default\">The very fact that money, or cash, can be manipulated and injected into the economy, means that fiat currencies are losing value day by day, especially when they are kept in the bank. Another point worth mentioning is simply the belief people still have in the value of these currencies, even when the only differentiator between the banknote you hold and any other paper is <strong>trust<\/strong>!<\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-full\"><img width=\"960\" height=\"529\" src=\"https:\/\/kinesis.money\/wp-content\/uploads\/2022\/01\/Bodyimage_evolution_of_money-1.png\" alt=\"evolution of money\" class=\"wp-image-24704\" srcset=\"https:\/\/kinesis.money\/wp-content\/uploads\/2022\/01\/Bodyimage_evolution_of_money-1.png 960w, https:\/\/kinesis.money\/wp-content\/uploads\/2022\/01\/Bodyimage_evolution_of_money-1-300x165.png 300w, https:\/\/kinesis.money\/wp-content\/uploads\/2022\/01\/Bodyimage_evolution_of_money-1-150x83.png 150w, https:\/\/kinesis.money\/wp-content\/uploads\/2022\/01\/Bodyimage_evolution_of_money-1-768x423.png 768w\" sizes=\"(max-width: 960px) 100vw, 960px\" \/><\/figure>\n<\/div>\n\n\n<h2 class=\"wp-block-heading\"><strong>Evolution of Money<\/strong><\/h2>\n\n\n\n<p class=\"is-style-default has-link-color wp-elements-fa9e8282ecb27166c39a9ec9e9ad6a78\">In most developed countries, traders are happy to accept card payments, while in uncertain times, people tend to hold cash more often. As a result of the pandemic, many retailers globally shifted their sales online, with <a href=\"https:\/\/www.bcg.com\/en-gb\/publications\/2020\/demand-centric-growth-compass-for-retailers\" target=\"_blank\" rel=\"noreferrer noopener\">one study<\/a> showing that around US$5 trillion had shifted to online purchases.<\/p>\n\n\n\n<p class=\"is-style-default has-link-color wp-elements-70b9268f01616fb8c241172986fe7925\">In the United Kingdom, according to a <a href=\"https:\/\/www.accesstocash.org.uk\/\" target=\"_blank\" rel=\"noreferrer noopener\">major report in 2019 on access to cash<\/a>, only about 30% of the population used cash. However, due to safety and convenience, many people are switching to other payment methods.<\/p>\n\n\n\n<p class=\"is-style-default has-link-color wp-elements-88e825e06f5bede0e039a928589ab456\">We\u2019re now seeing significant growth in the blockchain industry and digital wallets. At the end of 2019, there were <a href=\"https:\/\/www.statista.com\/statistics\/647374\/worldwide-blockchain-wallet-users\/\" target=\"_blank\" rel=\"noreferrer noopener\">40 million wallet users<\/a>, while that number almost doubled to 80 million in 2021.&nbsp;<\/p>\n\n\n\n<p class=\"is-style-default\">Since blockchain payments don\u2019t require centralised authority, as cash does, there now exist many partnerships between blockchain companies and big enterprises like Circle, Visa, and MicroStrategy. Facebook (now Meta) making huge steps towards adoption in the crypto space. Not to mention, Bitcoin is now officially legal tender in El Salvador.&nbsp;<\/p>\n\n\n\n<p class=\"is-style-default\">While this is occurring in developed nations, cash is still a primary form of money in developing countries, despite various technological advancements. This is partly due to bank fees and taxes, which are often too high for citizens to pay.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>A Question of Privacy<\/strong><\/h2>\n\n\n\n<p class=\"is-style-default\">Privacy is another key reason why people are still using cash. When two people meet in person and make a cash transaction, nobody knows about that besides them.&nbsp;<\/p>\n\n\n\n<p class=\"is-style-default\">This is a major reason why governments have an interest in eliminating cash payments, as a way to seriously combat criminal activity. Although it would be naive to suggest that the abolition of cash would equate to the complete eradication of crime &#8211; it could simply lead to further creativity in that department.&nbsp;<\/p>\n\n\n\n<p class=\"is-style-default\">Aside from this, it seems the new generation of consumers is now already swapping out privacy for convenience, which is creating a greater demand for cashless payment systems that prioritise efficiency. After all, a cashless payment system can be more time-efficient, whereas physical cash is less so and can be lost or stolen.<\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-full\"><img width=\"960\" height=\"529\" src=\"https:\/\/kinesis.money\/wp-content\/uploads\/2022\/01\/Bodyimage_future_of_money.png\" alt=\"future of money \" class=\"wp-image-24682\" srcset=\"https:\/\/kinesis.money\/wp-content\/uploads\/2022\/01\/Bodyimage_future_of_money.png 960w, https:\/\/kinesis.money\/wp-content\/uploads\/2022\/01\/Bodyimage_future_of_money-300x165.png 300w, https:\/\/kinesis.money\/wp-content\/uploads\/2022\/01\/Bodyimage_future_of_money-150x83.png 150w, https:\/\/kinesis.money\/wp-content\/uploads\/2022\/01\/Bodyimage_future_of_money-768x423.png 768w\" sizes=\"(max-width: 960px) 100vw, 960px\" \/><\/figure>\n<\/div>\n\n\n<h2 class=\"wp-block-heading\"><strong>Future of Money<\/strong><\/h2>\n\n\n\n<p class=\"is-style-default\">Today coins and cash have been partially forgotten, seeing a massive decline in transactions, especially during the pandemic. Nowadays, most transactions are completed via card and e-banking, and due to that, we can now send money globally in a matter of seconds.&nbsp;<\/p>\n\n\n\n<p class=\"is-style-default\">However the issue with cash, and more widely fiat currency remains. They are wrapped up in the same overarching problem, whether in physical form or digitised, cash money is still vulnerable to the economic fallacy of the system as a whole. In a monetary sense, it successfully functioned as a medium of exchange but has failed to store value effectively over time, leading investors to seek more efficient stores for wealth.&nbsp;<\/p>\n\n\n\n<p class=\"is-style-default\">Many are now turning back to the original commodities that stored wealth, that being gold and silver, as well as cryptocurrencies such as Bitcoin. Commodities like gold, when digitised, can be spent as digital currency. What\u2019s more, gold-backed digital currency could now have all the prerequisite qualities vital to being effective, sustainable and secure money. <\/p>\n\n\n\n<p class=\"is-style-default\">While the outlook for money is yet unclear, what we can be sure of: the future is not fiat.&nbsp;<\/p>\n\n\n\n<p class=\"has-text-align-center is-style-default\"><strong>Thinking about gold investment?<\/strong><\/p>\n\n\n\n<div class=\"wp-block-buttons is-horizontal is-content-justification-center is-layout-flex wp-container-core-buttons-is-layout-499968f5 wp-block-buttons-is-layout-flex\">\n<div class=\"wp-block-button\"><a class=\"wp-block-button__link has-white-color has-primary-600-background-color has-text-color has-background wp-element-button\" href=\"https:\/\/kinesis.money\/gold\/\" target=\"_blank\" rel=\"noreferrer noopener\">Learn More<\/a><\/div>\n<\/div>\n\n\n\n<p><\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p><\/p>\n\n\n\n<p><em>This publication is for informational purposes only and is not intended to be a solicitation, offering or recommendation of any security, commodity, derivative, investment management service or advisory service and is not commodity trading advice. This publication<\/em> <em>does not intend to provide<\/em> <em>investment, tax or legal advice on either a general or specific basis.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Preserving the use of cash at first seems like a project doomed to fail, and one that exists in opposition to the progressive, accelerating use of digital currencies, such as crypto. So, who is it that\u2019s seeking to prevent the supposed \u201cdeath\u201d of cash?&nbsp; You would be surprised to know that it&#8217;s not just traditionalists [&hellip;]<\/p>\n","protected":false},"author":5,"featured_media":24676,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[296],"tags":[],"class_list":["post-24675","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-nao-categorizado"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v27.3 (Yoast SEO v27.3) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>This Is Why Cash Is Dying Out | Kinesis Money<\/title>\n<meta name=\"description\" content=\"With many now turning to digital assets and payment methods, the case for cash is wearing thin. 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Is the death of cash now on the horizon?\" \/>\n<meta name=\"twitter:label1\" content=\"Escrito por\" \/>\n\t<meta name=\"twitter:data1\" content=\"Douglas Turner\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. tempo de leitura\" \/>\n\t<meta name=\"twitter:data2\" content=\"7 minutos\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/kinesis.money\\\/blog\\\/this-is-why-cash-is-dying-out\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/kinesis.money\\\/blog\\\/this-is-why-cash-is-dying-out\\\/\"},\"author\":{\"name\":\"Douglas Turner\",\"@id\":\"https:\\\/\\\/kinesis.money\\\/#\\\/schema\\\/person\\\/571080b449272af2102d3123a84bf6f2\"},\"headline\":\"This Is Why Cash Is Dying Out\",\"datePublished\":\"2022-01-20T17:52:43+00:00\",\"dateModified\":\"2023-08-04T14:45:05+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/kinesis.money\\\/blog\\\/this-is-why-cash-is-dying-out\\\/\"},\"wordCount\":1335,\"image\":{\"@id\":\"https:\\\/\\\/kinesis.money\\\/blog\\\/this-is-why-cash-is-dying-out\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/kinesis.money\\\/wp-content\\\/uploads\\\/2022\\\/01\\\/FeatureImage_cash_dying_out.png\",\"articleSection\":[\"N\u00e3o categorizado\"],\"inLanguage\":\"pt-BR\",\"copyrightYear\":\"2022\",\"copyrightHolder\":{\"@id\":\"https:\\\/\\\/kinesis.money\\\/#organization\"}},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/kinesis.money\\\/blog\\\/this-is-why-cash-is-dying-out\\\/\",\"url\":\"https:\\\/\\\/kinesis.money\\\/blog\\\/this-is-why-cash-is-dying-out\\\/\",\"name\":\"This Is Why Cash Is Dying Out | Kinesis Money\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/kinesis.money\\\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\\\/\\\/kinesis.money\\\/blog\\\/this-is-why-cash-is-dying-out\\\/#primaryimage\"},\"image\":{\"@id\":\"https:\\\/\\\/kinesis.money\\\/blog\\\/this-is-why-cash-is-dying-out\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/kinesis.money\\\/wp-content\\\/uploads\\\/2022\\\/01\\\/FeatureImage_cash_dying_out.png\",\"datePublished\":\"2022-01-20T17:52:43+00:00\",\"dateModified\":\"2023-08-04T14:45:05+00:00\",\"author\":{\"@id\":\"https:\\\/\\\/kinesis.money\\\/#\\\/schema\\\/person\\\/571080b449272af2102d3123a84bf6f2\"},\"description\":\"With many now turning to digital assets and payment methods, the case for cash is wearing thin. 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