Feb 15, 2013 Cash has been taking a beating lately.
Last week, Canada minted its last penny. Eurozone countries are working to restrict cash payments. Bitcoin is all the rage.
But like forecasts of flying cars, predictions of a cashless future have a history of failure.
This is in part because progress is incremental, and in part because physical money is a time-tested technology.
It's fast, widely accepted, anonymous and useful for old-school budgeting and when the power goes out.
Yet powerful forces are aligning against cash.
Together, they provide a glimpse of what a cashless or mostly cashless future might look like, and illuminate the promise of digital money, irrespective of whether cash is ever kaput or just increasingly marginalised.
Faster and cheaper
The battery against cash is coming from three fronts - new technologies, scepticism about the stewardship of sovereign currencies and increased enthusiasm for alternative currencies, and greater scrutiny about cash's myriad costs.
(Think anti-counterfeiting cops and armoured trucks, bank security, tax evasion, terrorists using 200-euro or $100 notes to buy explosives, and every cash-related crime ever.)
David Wolman Using an ATM or chequebook will be alien to many people, Mr Wolman says
Digital money innovations, particularly tools anchored to mobile phones, offer faster and cheaper ways to pay bills, buy and sell goods, send and receive money and make bank transactions.
Alternative currencies, meanwhile, are moving from the fringe to the centre, as more and more people worry about the long-term value of coin of the realm.
Angst about government currencies has traditionally sent people flocking to gold, and for many devotees of the shiny stuff, gold remains the one and forever answer.
But gold is not value incarnate. It's just another commodity, albeit a historically pivotal and impressively hefty one.
Those who grasp that fact, yet still distrust central bank-issued currencies, are turning to local and online options, barter exchanges, and the crypto-currency Bitcoin.
But the most consequential aspect of this monetary revolution is growing recognition that the costs of cash fall disproportionately on the poor.
When was the last time you saw a wealthy person patronise a cheque-cashing service, use Western Union or visit a payday lender (for an above-board transaction, I mean)?
Cash is expensive not merely because of the risk of being robbed at the cash machine or losing your savings to a fire, flood or abusive spouse.
It's also expensive because of steep prices paid in time, fees and opportunity costs. For you and me, those costs are, by and large, nominal.
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