You would be hard pressed to find someone who didn’t deal with money at least once during the day. It seems so essential in our lives, but in reality, money has only been around for a short period of humankind. Modern humans have been around for 200,000 years yet the basic concept of money only began around 700 BC.
Fast forward a few thousand more years and we find the American Dollar beginning on February 3, 1690. Cash made it easy to buy and sell, allowing commerce to grow quickly. But as useful as cash has been for our growing country, a new trend is creeping across America that spells doom for greenbacks.
Technology, or more specifically, the internet is slowly killing cash. The change is happening slowly, but it is happening. The advantages of online currency are just too valuable compared to pieces of paper in your wallet.
Why Is Cash Dying?
We already store a significant portion of our money digitally. Banks no longer hold our savings as cash, instead they invest our money in stocks or bonds. The problem with cash is that it devalues over time thanks to inflation. Every day that dollar bill in your wallet loses its value a little bit more.
While inflation is intersting, the real reason cash is dying is more granular. The only time we use cash is for day to day spending. We use it to buy bagels, pay back friends, and a billion other things. This would have been enough to keep cash around but in the 1950’s a little piece of cardboard card changed everything.
The Credit Card
Credit cards were superior to cash in so many ways. They were worthless to thieves, they take up less space in your wallet, and you can earn money back on your spending. The list of reasons why credit cards are valuable goes on and on. The only downside to credit cards was the fee they charged, our lack of control with unlimited funds, and the lack of businesses that accepted them.
As good as credit cards were, cash did one thing they couldn’t. Moving cash from person to person is completely free. You don’t charge a friend 3% when they give you the $50. The credit card transaction fee pretty much guaranteed that cash would still be needed.
That is until a new company appeared in 1998 that would change everything again. Paypal brought a safe way to connect our bank accounts with the world around us. Customers could buy things online safely with Paypal, much like a credit card but without the excess charges. It started off slowly but grew exponentially.
Paypal and other services like Cash, Venmo and Google Wallet filled the niche that credit cards couldn’t. They allowed us to exchange money safely without paying any fees. Paypal will let me pay back a friend with the click of a button, saving me from going to the bank to get cash out.
So What Is The Future Of Money?
Cash in its current form is on the way out. Every year technology makes it easier to us to pay or share money safely. Robbers will soon find empty wallets full of plastic whenever they mug people on the street. Paying back friends will be done electronically, from anywhere in the world. Since none of our money will be physical cash, we can always have it invested.
Yes, cash is dying, but that only means good things if you embrace the concept. For now, physical cash is still an integral part of our society, but I recommend starting the transition to digital. After all, who knows where that dollar bill was kept before you received it.
