Reflecting on the need for cash as a fallback for more modern payment systems, Buterin stated that ethereum should be prepared to fulfill that role, retaining all the properties of physical money, such as privacy and resiliency.
Vitalik Buterin States Ethereum Should Be Ready to Substitute Cash
While cash is being phased out, with its involvement in the payment system decreasing each year, some still believe that cash, or a cash substitute, remains relevant as a fallback. Vitalik Buterin, one of Ethereum’s co-founders, commented on the need for ether to mimic the properties of cash to fulfill this role.
Buterin referred to the subject on social media, inspired by the recent call by the central bank of Sweden to incentivize the use of cash again in the context of a possible global conflict.
While Sweden is one of the countries with the least cash utilization in the world, the central bank assessed that cash should be used in the case of hybrid attacks affecting critical infrastructure. In a report, the bank stated:
Measures need to be taken to strengthen preparedness and reduce exclusion so that everyone can pay, even in the event of crisis or war.
Buterin interpreted this as a walk back from the cashless utopia these countries proposed due to the defects of its centralized implementation, propping cash as a necessary backup in these cases.
“Ethereum needs to be resilient enough, and private enough, to be able to credibly play this kind of role,” he concluded, reinforcing the need for decentralized, offline, and private payments to be hardcoded into Ethereum’s blockchain.
While the development of such systems might be complex, given the design considerations behind them, Buterin pointed out that Ethereum is quite advanced in this regard.
“We basically know how to do it, but with the limitation that any solution depends on trusted hardware and/or post hoc enforcement against double-spenders,” Buterin stressed, acknowledging the limitations of their current approach.
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