ATM machines are a familiar part of our financial landscape, giving millions of people access to their money daily. Toronto has just obtained a new kind of ATM, however, one which accepts cash instead of a card, and in return gives users ownership of an unusual new currency called Bitcoin.
New Money, Old Principle
Much has been written about Bitcoin since last year when it came to public attention as part of a huge sting on Silk Road, an online marketplace for all kinds of illegal goods and services. Bitcoin has only existed since 2008, and it is a form of digital currency which is not administered by any government or bank. Its proponents say that it is the future of money, and will eventually be used to make all kinds of payments; detractors raise numerous points of caution, primarily because it is such a new idea, and there are many questions about how it will be used in the real world and what kinds of problems it may raise.
Whether or not Bitcoin becomes widely recognized and used, though, in some ways reflects the value of our most traditional form of money, physical currency. Bitcoin's own FAQ site says that it is "pretty much like cash for the internet."
Security and Privacy
There's a reason why Bitcoin was required to shop on the Silk Road's black market clearinghouse. It’s the same reason cash is still used for all kinds of illicit goods and services. Cash transactions are untraceable, or at least much more difficult to track than electronic transactions involving credit or debit cards. Using cash offers security and privacy that card transactions simply can't match.
Of course, the fact that cash can be used in illegal transactions isn't a strong argument in its favor. It simply serves to illustrate the point that for whatever reason, people may have privacy or security concerns, and cash is one way to serve those needs. The degree to which our actions are tracked and recorded is coming into question by some people, and using cash is simply one way to avoid some scrutiny.
Here to Stay
The fact that Bitcoin acknowledges its value as "cash" for the internet highlights the continuing value of cash in our society. Not only is it secure and private, it is also more convenient in many cases than electronic payments. Small transactions, especially, still transpire to a large degree in cash. Using cash gives people more options for tracking and controlling their spending, whether they give themselves a cash allowance to spend every week or month, or avoid having to review and reconcile so many transactions on their bank or credit statements. Unlike Bitcoin, cash is also highly familiar and accepted practically everywhere for in-person transactions.
Whether or not Bitcoin becomes an established currency used by the general public, it points back to the physical currency which is familiar, and has been with us in different forms for a long time. Even as online and electronic transactions become more prevalent, cash is still here to stay.