More often than not, when it comes time to pay the bill at a restaurant, the waitress already has the debit machine in her hand, and is inputting the amount before I can tell her "actually it will be in cash", or "do you take Bitcoin?"
Tapping a machine with a plastic card is the easiest way to make a payment. There's no need for the worker to count the exact change from the cash register, nor search for the misplaced smartphone that has a Bitcoin wallet installed on it.
Although convenient, there are potential risks associated with plastic card payments.
Disadvantages of Plastic
The "money" in your bank account is not safe from inflation. The purchasing power of your bank deposits is being eaten away on a daily basis as more money is printed via commercial banks and government spending.
Your bank account is not immune to suspension or cancellation either. If you were to protest against a draconian government policy, for example, the bank could use their power to block access to your account.
Emergencies such as bank holidays or other financial crises could result in long line-ups at ATMs, strict spending limits placed on your account, or a total disruption of access to your funds.
Also consider the push for CBDCs happening in most countries. At some point, your bank balance could be forcefully converted into digital credits that only allow you to purchase things like electric vehicles and protein-rich cricket powder.
A lot of Bitcoiners end up depositing their Bitcoin with a custodian, who then provides them with a plastic card to make the payment process easier. However, this is defeating the purpose of Bitcoin. Namely, to eliminate the need for payment intermediaries.
Breaking The Habit
Breaking out of a habit is a difficult thing to do, because it requires the use of will power and consciousness to instill new behaviors. That said, breaking the habit of paying with plastic could give you the upper hand if and when our traditional banking systems fail.
Aside from inflation, paying with cash can eliminate most of the risks mentioned above, as well as offer you more privacy. While only a temporary solution, if more people paid with cash, the habitual use of plastic cards would be diminished.
I believe the long-term solution is self-custody cryptocurrency. That said, I don't think the majority of the population is ready for it, and will likely continue to use plastic cards. What is more likely to change is the value of the bank credits behind those cards, in downward direction.
Until next time...
Despite the risks of inflation, debanking, and financial crises, the majority of the population will continue to pay by plastic card. However, those who break the habit and use cash or crypto will have an advantage when traditional systems fail, or are replaced entirely.
If you learned something new from this article, be sure to check out my other posts on crypto and finance here on the Hive blockchain. You can also follow me on InLeo for more frequent updates.
Further Reading
- The Uncertain Future Of Bitcoin in El Salvador and Other Nation States