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Author: VitalikButerin; Source: bitcoin.com
Although the utilization rate of cash in modern payment systems is declining year by year and is gradually being phased out, it is still meaningful as an important backup payment method, or its alternative in special circumstances.Ethereum co-founder Vitalik Buterin commented on this, believing that Ethereum needs to have the characteristics of cash to be competent for this role.
Buterin explored this topic on social media, inspired by the recent Swedish central bank’s re-encouraging cash use in the context of global conflict.
While Sweden has one of the lowest cash usage rates in the world, its central bank assesses that cash usage becomes critical in situations where hybrid attacks can affect critical infrastructure.The bank stated in its report:
“Measures need to be taken to strengthen preparation and reduce exclusion so that everyone can pay even in a crisis or war situation.”
Buterin explained that this reflects that these countries are returning from the previously esteemed “cashless utopia” because of the inherent flaws in centralized implementation that make cash a necessary backup in such extreme situations.
“Ethereum needs to be resilient and private enough to play such a role reliably,” Buterin concluded, highlighting the need to hardcode decentralized, offline and private payments capabilities into the Ethereum blockchain.
While development of such systems may face complexity, especially at the design level, Buterin notes that Ethereum has made significant progress in this regard.
“We basically know how to do it, but there are limitations that any solution depends on trusted hardware and/or after-effort execution for dual payers,” Buterin acknowledges the limitations of their current approach and highlights these critical dependencies.
