Tips for Traveling while Spending mostly BitCoin

The past weeks have seen India’s Prime Minister Narendra Modi defend his unexpected demonetization effort that began on Nov. 8, causing tremendous disruptions throughout the Indian economy. According to Reuters, “nearly half of India’s 202,000 ATMs were shut on Friday,” after the announcement withdrawing 500 and 1,000-rupee notes. Over 80% of the currency in circulation has effectively been banned.

Hundreds of thousands of people waited outside their banks as “anger intensified” across India. Accounts in Mumbai described prices jumping by a factor of ten in return for accepting the old cash notes. Meanwhile, Finance Minister Arun Jaitley is quoted in Bloomberg as calmly stating that “there are long, but orderly queues” at the banks. “A big regret is that people are getting inconvenienced, ”Jaitley said. It is a vastly different perspective from the countless images of disorder on the streets.

 

A man walks past a display cabinet containing models of Bitcoins in Hong Kong on August 3, 2016.

According to a Credit Suisse report on Securities Research & Analytics from June of this year, “As data becomes the new currency, financial institutions will be willing to forego transaction fees to get rich digital information on their customers.” “The elimination of these fees will further accelerate the move to a cashless economy as merchant payments will also become digital.” Credit Suisse also estimates that at least 90% of Indian consumer purchases are made in cash.

"We can gradually move from a less-cash society to a cashless society," said Modi during his most recent speach on national radio. He encouraged daily wage earners by saying, "This is the chance for you to enter the digital world." He spoke in Hindi, urging them to use mobile banking apps and credit cards. Modi also pushed young people to teach others how to use digital payments. The Indian government has publicly declared its larger concerns regarding tax evasion and the black market. These sentiments can be seen overseas, as well.

UBS analyst Jonathan Mott believes Australia needs to follow India’s example by eliminating Australia’s $100 and $50 bills. According to a note he sent to his clients earlier this month, demonetization would be “good for the economy and good for the banks.” He cites potential benefits as reductions in crime and welfare fraud, as well as a “spike” in bank deposits. Citibank, meanwhile, is one of the first major banks to announce that it was going cashless at some of its Australian branches.

Earlier this year, the Sydney Morning Herald released a series of articles promoting cashless ideologies, some of which appear to be written by officials from Australia’s Department of the Treasury. Alex Hawke, Assistant Minister to the Treasurer, suggests that eliminating cash will “save billions.” Elites within governments, media, banks and academia have formed a unified front that push “cashless” as good for everyone. Legitimate concerns are brushed off through fear-mongering campaigns about fraud and terrorism.

In reality, governments and the wealthiest ranks of society would mainly benefit from a cashless society because all savings would be in the banking system, and they have full regulatory control over the banks. The middle class is already deeply enmeshed in digital technology. With fewer obstacles to impose capital controls or engage in Civil Asset Forfeiture, social inequality could become exacerbated. At the same time, none of these measures actually prevent new underground cash or digital black markets to appear.

It is mainly a cynical move to limit big banks’ exposure from their real efforts involving risky bets with the global economy. Legitimate banks have been caught repeatedly manipulating interest rates, creating fake accounts and predatory lending for profit, compromising trust on an institutional level.

Watch On Forbes: Getting Rid Of Pocket Money

Author Don Tapscott asks, “Rather than re-distributing wealth, could we pre-distribute it? Could we democratize the way that wealth gets created in the first place?” More people need to be engaged in the economy while ensuring that they get fair compensation in the process. Silicon Valley has attempted to do this via digital aggregators of services. Tapscott claims that the so-called “sharing economy” is a lie. New startups Uber and Airbnb have capitalized on old models of centralization to protect billions of dollars from the actual workers who get exploited.

Profits are amassed rather than truly being shared. Another innovation on the blockchain is the concept of smart contracts, which could be beneficial for prosperity by offering fair compensation. Middlemen would be cut out of the loop. Agreements based on reputation and written in software code would self-execute when certain conditions are met, all without the dependence on disproportionately powerful intermediaries.

Money and influence would come back into the hands of such people who offer their services, create music or write independent news, for example. A healthier balance of power could be achieved for a freer society. Technological advances allow for more opportunities, especially in the third world where they are desperately needed. Personal data as a new asset class can enable people to own and monetize their raw data rather than giving it all away in return for “access” to big banks or social media websites.

Customers themselves are actually servicing the companies by providing their information. Corporations rely on capturing everyone’s data to make a profit through the use of targeted ads and more, all of which undermine basic privacy rights. Uneven access to money causes a negative feedback loop in which imagined scarcity leaves billions hungry and unable to make a living. There has been massive wealth creation in the digital age, yet there is growing social inequality because centralization is asymmetrical by design.

It is not just the malcontents who are ideologically bent on defending privacy that stand to benefit from the blockchain. Heavily centralized institutions are also becoming attractive targets because of their size. They are increasingly easier to hack, as well as slow to adapt in an increasingly faster era. Wall Street giants JP Morgan and Citi, as well as Microsoft and IBM, have all announced projects utilizing different blockchains that could smooth internal operations by eliminating whole days or weeks from contract processing times. Their security would also be greatly enhanced. The limited options facing the elites in their respective countries include being replaced or their quiet embracement of decentralized ideologies.

Chuck Reynolds
Contributor