It absolutely makes sense for the Treasury to generate new bills with technology/features that stays ahead of counterfeiters.
But changing bills every several years can also produce unintended consequences. If new bills are constantly arriving while multiple generations of older bills remain in circulation, it's hard to know what exactly what we should be looking for with each bill.
For counterfeiters, the best time to start generating old bills is probably right after the introduction of new ones. I'd like to think the government took this into account…
Your #2 -- every so often there's a news story about some fast food worker that calls the cops on a customer that tries to pay with either a $2 bill, or one of the old 20's that has the small portrait. Hilarity ensues.
I also seem to recall that a lot of each new version gets shipped overseas right away. People there hold onto US dollars as protection against their weak government/banks, but they're used to having their old currency being declared null & void and having to exchange them (with government imposed exchange limits and poor exchange rates). So they want to have the newest bills even though the old ones are still valid currency.
Many foreign banks will only take the latest iteration of US currency.
Thus, holding onto the old bills would create unnecessary friction. You'd have to take the cash to the United States to be guaranteed to exchange them for face value. But cash exceeding $10,000 has to be declared to the customs agent -- which is even more frightening.
Better to exchange it right away, so you know you can use it wherever you go.
I've always wondered what incentive counterfeiters even have for trying to copy these new bills. I have several $100 bills from around 20 years ago that I keep in a safe as an emergency reserve and they're still legal tender as far as I know. Why wouldn't counterfeiters just continue to counterfeit the older bills?
Most one hundred dollar bills are used overseas, where your old ones wouldn't be accepted in most places but a careful bank. Even in the USA, merchants will refuse bills that they aren't comfortable verifying.
I think that the anti counterfeiters are planning decades ahead with each revision.
Even the older Benjis are still very hard to counterfeit - all of these new changes are targeted almost exclusively at North Korea's advanced counterfeiting program.
best plan is generate new bills in a different denomination. Hmm these new $20s look kinda like the $100s but not as good, well, yeah they're only worth 1/5 as much whaddya expect?
This eliminates confusion over someone holding a real new $100 and a fake new $100 and wondering which is which.
It's just marketing...how many people do you know that keep a single Benjamin laying around much less 10+? The fact is that most of what everyone uses as money is "inside money" that banks conjure up and charge interest on in perpetuity.
The world quickly devolves when the ROC on this benchmark goes flat and the social world heads for chaos when it goes negative.
I heard the rumors about the $100 notes but I didn't 't get to try them out. Going into a bank and and changing bills just so I could sniff them would out me as the worst kind of American tourist.
Everything else smelled like maple syrup, though. So it wasn't a total loss.
Rubbish. They don't melt in a clothes dryer. They're designed to withstand temps of well over 100 degrees Celsius (Ps why do Americans not air dry their clothes?). I've never heard of anything going wrong with the notes here in Australia. You can also get them wet without any issue, a far more common occurrence. The Maple Syrup thing is a joke.
The 1000 CHF is quite a bit bigger than the other ones. Keep in mind that this is worth more than $1000 now, extremely useful for transporting lots of money the old fashioned way.
1) We had the same bills from my grandpas age till mine, and suddenly over the past 20 years we're up to revision 4.0 or so. Confusing the endusers to no end. Although the API has remained constant what you get per bill has dropped quite a bit over those 20 years. Maybe the new 4.0 version should get me more groceries for my $100 rather than less each revision.
2) Same spokesman for each revision confuses upgraders. You got Franklin? Yeah I'm using Franklin. No dude thats the old version of Franklin, has some security bugs, you gotta upgrade before the economy gets powned. Can't they put something contemporary on it, like the Miley Cyrus bill or the 'Bama Bill? Or embed the year, like I got me an "2013 buck" because it has 2013 written in big ole automotive style letters?
3) They're doing a great job at rollout of focusing on the new features, but ignoring the old features. I need to know the API to verify the new bills are legit. A smart counterfeiter would focus solely on the new features and just print on toilet paper or something, half the public would probably buy it. A REALLY smart counterfeiter would start producing a run on version 5.0 $20 bills and most of the public would assume its actually upstream's product, seeing as upstream ships a new version about as often as Detroit ships a new model car now.
4) I'm not kidding around here, why do they use sequential serial numbers when a pub-key crypto signed serial number with a VERY private key would let us look at a bill and verify its a genuine signed serial number? Maybe not prove the bill is legit and uncopied, but at least you'd know its a copy of a good signed bill. They could publish a list of destroyed currency and rotate aggressively such that counterfeits would only circulate for awhile.. Unless of course the destroyed currency was the counterfeit and the cancelled one in your hand is the legit one... maybe thats why they don't do this.
5) As far as .coms go this startup needs a new art director. I'm not asking for kittens but lose the eye in the pyramid and flowery decorations and inkwells and eagles and try a QR code in one corner for vending machines (hey when the 70s stagflation hits and you want to buy a condom for $100 from the local vending machine, you'll be sorry...).
6) This seems to be the only branch that hasn't sold out naming rights. I halfway expect to see "Larry Ellison Bucks" and "HP 20s" at some point in my life. The "3com three dollar bill". As a startup they're leaving money on the table by not selling naming rights. At the bankruptcy Oracle will probably pick up the product for pennies on the dollar and freak out the GPL linux guys who'll fork into a bitcoin implementation on mariadb.
7) I don't think they're getting the tech news buzz they need. They need to send out fat stack of free samples to hacker news readers like me to create buzz. They should send out so many free samples that I can freely share them with friends.
8) Open source the code to generate? Why can't I print some at home to pay my debts, just like .gov does? Information just wants to be free. Speaking of which it needs a license I'm guessing not BSD or GPL not some CC:SA variety?
9) Is the new API compatible with existing players like "wheresgeorge.com" (are they still around?)
Regarding 4), as a thought experiment, I was wondering earlier how you'd authenticate the "trillion dollar coin."
Hypothetically, it's possible to mint a one trillion dollar coin to get around the debt ceiling crisis[1]. It's an absurd idea anyway, but what if that coin was made and then lost. Someone says they've found it, but how do we know they're not lying and have just made a forgery?
Assuming that all details of the coin (its exact elemental composition, dimensions, etc.) are publicly known, I thought a possible solution would be to take an electron microscope and image the grain structure[2] of the coin in a specific region (e.g. the eye of the statue of liberty? if that were on the coin). Then hash that grain structure (in a similar way to how one "hashes" fingerprints), sign that hash with a very-private-key, and laser etch the signature onto the coin. Since it's not possible to recreate exact grain structures, it'd be impossible to forge your coin :)
Alternatively, you could probably introduce some specific radioactive isotope to definitively age the coin, such the time since the coin was minted could be definitively measured, and any attempt at forgery revealed, though I'm not sure how to make that work in practice. There are probably other solutions too, though I can't think of any off hand. There must be things people do already to authenticate high-value "natural" objects such as gemstones? Like a laser-etched serial number? I don't know...
An absurd scenario I know, but an interesting thought experiment.
Not really attacking the problem from the direction you indicated, but authenticating the coin is a non-problem. There's only one and everyone knows where it's supposed to be and who owns it. Carmen Sandiego stole the empire state building by carrying it away, but that doesn't work in the real world; the actual way to steal it is to forge change-of-ownership papers.
insert hypothetical hack proof perfect RFID cryptocard into a cavity of the coin and solder it up except for a small hole for RF to pass thru? Unless someone knew the secret private key they'd be unable to replicate it the crypto code?
Hey crypto card, if you actually know the correct private key, you can hash this HN article number "6511347" OH OK dude here is the signed hash "342351315215154" OK let me test that... holy cow it worked.
The real hack would probably be a legal one to embed some kind of national treasure into the coin to make it seized by .gov, so anyone that walks up with one can have it taken away or is counterfeiting. My guess is a little spec of moon dust in a glass capsule that can't be privately owned. Or a little piece chipped off the Washington Monument.
>insert hypothetical hack proof perfect RFID cryptocard into a cavity of the coin and solder it up except for a small hole for RF to pass thru?
Then, hypothetically, why not have the "coin" be the cryptocard in the first place? and forgo this whole lump of metal thing. Probably because it's not robust in the long term. What happens when the RFID cryptocard, eventually, fails?
Hypothetically, it's because the authorizing statute specifies that the coin must be platinum (or put another way, the statute only authorizes the minting of "platinum coins").
I haven't done much hi-temp thermocouple work... anyone know how easy it is to solder to platinum with "real" or lead-free solder? Electroplate a round cryptocard PCB and solder it together? I know solder sticks very well to gold after some unfortunate accidents (keep the solder away from the plated contacts when assembling, etc) so this would work for a "gold" coin.
You can solder with platinum directly, in a manner of speaking (it won't be 100% platinum, and it also requires much higher temperatures than ordinary solder).
On your point 1), I'm obligated to point out that over the last 20 years, inflation has been very low by historical standards. We were only above 4% (historical average) for a couple years in the late 90s and from about 2006-2008, if I recall correctly.
If those fake rates were true, I'd only be paying about $2.10 for a gallon of gas and a new 2014 car like my old '97 would be about 7 grand cheaper than it actually was. I'd be able to buy ground beef for $2.25/pound, I could go on and on for days with this stuff.
There's actually a whole science to this that you're completely disregarding (which, generally speaking, is the cause of a lot of dumb thinking in this world).
Look up BLS inflation measures and the 'basket of goods'. You could spend years coming to an informed conclusion, and people have. Then look up the costs of patio furniture or computing equipment compared to 20 years ago. They decreased in price. It's an average, yo.
Also, if you don't trust broad consensus across economists, take a look at the free market. People are buying gov't treasuries. If they thought that inflation was higher than the interest rate, they wouldn't be buying them, right?
Energy and food prices are volatile, as they depend on exogenous factors. Try reading about droughts and wars. Your new car is more expensive in 2014 because it's safer, more fuel efficient and technologically superior in every way to your 1997 version.
Only the ignorant think the CPI reports are fake. Perhaps you should read up on the methodology of how it's calculated.
There is a whole world of finance that depends on a reasonable calculation of inflation rates. I suppose we are to believe the best financial minds on the planet are wrong in their bets, and you are right?
If you look at energy, there isn't really a big shift, depending on what energy sources you use. Oil prices have gone up substantially, due to a change in supply vs. demand. But natural gas prices have gone down, for the same reason. So it costs more to fill up your car, and less to run your furnace. Things do change real price, so the fact that gasoline and beef cost more now can just mean that gasoline and beef are actually more in demand relative to supply, just like natural gas is now more in supply relative to demand.
There are good fiscal reasons for the price rise of some goods. You're confusing fiscal factors with monetary ones, while ignoring all the stuff you can get cheap today that cost a small fortune in 1997.
No. Lots of goods get cheaper through technology and economies of scale rather than through subsidies. Your ideology is causing you to miss the forest for the trees.
Does anyone have an argument better than an appeal to coincidentally self-serving authority or claiming it doesn't matter? No? I guess that's settled then.
I've seen better arguments in the "bible says the earth is flat" threads.
I like how you simply ignore the economic arguments that you were offered, such as increased demand for energy or the behavior of market actors who are perfectly happy to buy bonds.
Local slang for credit card has occasionally been "plastic" so plastic money would result in infinite bad jokes about already having plastic debit/credit cards?
The old "light a bill on fire and then light your cigar on fire with the bill" thing isn't going to work well as well anymore.
Another local peculiarity is the locals (more or less correctly) don't trust the local plastics industries so we'd get all kinds of push back because the .gov is only trying to switch to plastic to get more BPA in our diet to control our minds and stuff.
TSA agents can't figure out how to make a deadly weapon out of a paper dollar bill, but if they figure out how to ban cash from flights, its going to be a mess. Presumably they'd be smart enough to use self-fire-extinguishing plastic. Despite the fact there's no way you'd confuse C4 with regular plastic, I guarantee you'll have an infinite number of stupid hollywood movie plots about plastic explosive counterfeit bills taking down airliners because they hate our freedumb or something equally idiotic yet politically powerful.
My examples above sound pretty dumb, because they are, yet they're also serious, which is sad. So thats why we're stuck with paper.
You get all this fearmongering every time there's a currency change, but the people who do it are very much a vocal minority; a 'paper tiger' might be the apt term here :) Usually people are really curious about the new format and pass it around to be seen. There's some cachet in being one of the first to get a new -foo-.
In hindsight, the only real currency change criticism in Australia that had substance was a coin change. We replaced our $1 and $2 notes with a heavy 'gold' coin, and there was a criticism from blind lobby groups that these coins didn't 'ring' when you dropped them. They still make a particular sound, but it's much less obvious if you're not looking for it. Every other criticism I've seen, while sounding momentous before the change, dies pretty quickly after introduction.
As an aside, I was buying a train ticket in LA in 2009. Handing over a $50 note, the cashier marked it with a felt-tip pen. At this stage, I'd been using polymer notes for nearly 20 years, so I was puzzled and asked what it was for. She explained the marker was to test for counterfeit notes - and I had to stop myself from inadvertently muttering 'oh, how quaint!'. The pro-to-con ratio for polymer notes is just so strong, it's hard to see how a government can seriously reject it... it genuinely seems backwards.
As another aside, before polymer notes were brought in here, we had the dumbest bank note possible. The Australian paper $100 note was black and white with subtle colour shading. You could (coarsely) counterfeit it with a photocopier - and you'd occasionally hear stories of people giving such a crumpled-up note to a sleep-deprived 7-11 employee and walking away with nearly $100 change...
The "marker" test checks for starch, which wood pulp paper has, but currency rag pulp paper doesn't. But it's security theater: minimally competent counterfeiters would just buy $5 worth of rag pulp resume paper from office depot...
I don't know that polymer bills last any longer. Canada's old dollar bills used to last ~1 year [1], and polymer bills are said to last two to three times longer [2]. (I can't find a more precise estimate.) But US dollar bills are made of linen and last much longer, 56 months [3].
The high durability of US "paper" money is another reason that switching low denominations to coins makes no sense in the US.
They smell nicer too, speaking from a constant user from Australia. Just have to be careful not to iron them, otherwise they shrink to a tiny tiny postage stamp and you have to embarrassingly take it to the bank to have it replaced.
A hidden number would defeat the purpose, I'm thinking of something like the (sort of) well known social security death index, where if you try to get credit using a known dead psuedorandom serial number, the bank gets all wound up, and you get lots of attention from cops.
So try to buy a soda with a known shredded $1, the vending machine doesn't accept it, you'll have a strange conversation at the bank. Of course we're rapidly nearing the point where a smartphone could just hold the numbers in its memory, which is a strange form of digital cash but it could kinda work.
With regard to #5, I'd say they're actually doing a pretty good job in terms of art direction, though it's definitely an iOS 7 sort of thing – there's an emphasis on highly functional security elements that are rendered with unabashedly high contrast, giving it an updated look to compete with the Euro, but it's still very much the same old green-and-black Federal Reserve Note underneath the new colors and geometry.
How much money do counterfeiters cost us, anyway? Even if they have, to date, inserted only $70,000,000 of counterfeit bills, the impact to inflation is minimal, and really it only hurts a few individuals here and there who aren't able to circulate the bills. But how can you measure this impact, and, if we don't fight it, what would its projected potential impact be?
Then I'm curious about these questions:
1. Is this the most cost efficient method to deal with it? It seems a bit silly, to me, as this is a game of cat and mouse, and those tend to be very expensive in the long run, if you want to win.
2. Would it be worth investing in a digital solution such that a bill could be copied, but only one copy of that bill can ever be recirculated, so you could "back up" your money, digitally, then re-print it somewhere else, but you could never spend it more than once, as a general solution to counterfeiting?
3. Would either of these actually save more money than just ignoring the problem?
4. 100% digital? Maybe not online as a requirement, but definitely tap your card to transfer funds to someone? Why do we still have paper bills anyway, with multiple demonstrated cryptographic protocols that could replace them entirely?
I don't understand why we still mint a $100. It's the prime counterfeiting target, is mostly used overseas, and is too big for real commercial value. It seems like just having the $20 be the largest bill would overcome all these problems.
The article says: "The most recent statistics from the Fed show that as of Dec. 31, there were 10.3 billion $1 bills, in circulation, 8.6 billion $100 bills and 7.4 billion $20 bills, followed by $5's, $10's, $50's and $2's. A little more than 75% of the more than $1 trillion of currency in circulation is in $100 bills. Much of it is held outside the United States." If we switched to 20s, we'd need 43 billion more 20s.
$100s have plenty of commercial value. Any time you're exchanging physical things of high value, cash is key. Cashiers checks, etc., can and are forged. Also, gamblers regularly walk around with 10s of thousands of dollars on them.
That's one thing I like about Danish money; the 500 kr note (~$90) and 200 kr note (~$35) are both common and regularly used. Makes it much more convenient to use cash for things like groceries or restaurants without having to carry around a thick wallet full of wads of $20s. Sure, many people use cards too, but you don't have to if you prefer cash.
I don't find much difference in CoL between the Bay Area and Copenhagen. If anything it's slightly cheaper in Denmark (more expensive restaurants, but cheaper rent). If you're comparing median U.S. CoL, sure, but even in high-CoL areas like San Francisco and New York City, $100 bills seem rare, despite the fact that >$100 tabs at NYC restaurants are not exactly rare. The difference seems to be that Americans are wary of larger amounts of cash, so use a card for anything nontrivial (or among older people, a personal check), while Danes can go either way, depending on personal preference. I'd blame it on the difference in mugging rates, probably.
The highest denomination in China is 100 yuan (you can think of it like a $20, though it's worth slightly less). People here pay rent in cash. It drove me nuts when I had to pay 12000 yuan of rent in 120 small bills. My landlord even asked "is it the correct amount?" -- I have no idea; I'm trusting the bill-counting machine at the bank!
Obligatory stories of a Taco Bell employee refusing to accept a $2 bill and a Best Buy employee having a guy arrested for paying with $2 bills.
(plus more currency anecdotes linked from the bottom of the article)
As someone who lives in a western nation outside the US, I never use non electronic currency. Why do you still carry around so much easy to steal paper money when a debit card is so much more secure?
Presumably the old one will be taken out of circulation as they go through banks, so in a few years anyone with a large quantity of "old" bills will be heavily scrutinized for fakes. Canada's old bills had a pretty big forgery problem, and nobody will accept old 50s/100s.
This is particularly true outside the US. In much of Asia, banks (and anyone else who might accept dollars) strongly prefer crisp, new US bills, and heavily scrutinize or reject old bills.
Presumably the old one will be withdrawn from circulation at a later date when most old bills has been vacuumed up. The Swedish Central Bank will stop accepting a couple of older bills at the end of this year, for example.
Yes, they can be spent forever. But when the reach the bank and get sent to the federal reserve, they can be withdrawn and replaced with newer bills. You'll be able to keep spending the old ones you have forever, but once you've spent them and they hit the Fed, they'll be removed from circulation.
After some cut-off time all the moneyhandlers will send those old bills to Fed to be shredded and exchanged for new ones, instead of releasing them back in circulation - exactly how it's happening right now with the pre-1996 bills.
I have to disagree. The potential downside for a flaw in the new bill could be rather catastrophic damage to the economy. The downside of a failure with the Mars rover is that the rover just doesn't work. Thus, it makes sense to be dramatically more conservative in designing a new currency.
Alright, I was quick to judge and there is no way of knowing how many people worked on it or what technology is included. However, 10+ years is a heck of a long time to work on the bill and I'm not sure taking more time on something necessarily insures that it is the best. But I will concede on the grounds that this is one of those situations that you can't just iterate on. It works or it doesn't and the consequences of failure are incredibly high.
There are many definitions of "work on". Perhaps the first 5 years was just a couple of people spending a couple of hours a week keeping up with the latest state of the art since they knew that eventually they'd probably be replacing some bill in the next decade or so.
There's no denying that Franklin was a genius, but should our society honor a slave owner by putting his face on currency?
That's a serious question. I think Franklin's legacy is clouded by some moral ambiguity: his innovations were incredible, he fought for abolition and yet he didn't walk the talk.
Is that a mistake we should overlook in remembering him?
This is the same country that put "in god we trust" on a coin honoring Jefferson of all people, I don't think mere shame is sufficient to force logical thinking.
When fundies tell me our highly religious founding fathers (LOL) would want bibles in our classrooms, I always suggest the Jefferson Bible which either confuses them or freaks them out if they actually know what I'm talking about.
We should be careful to avoid presentism, applying modern moral standards to somebody who lived over 200 years ago. By the standards of his time, Franklin was unquestionably a great man.
You can justify almost any instance of slavery or genocide by arguing that the perpetrators acted according to the standards of their time and communities.
He's not justifying Franklin's slaveholding, he's justifying Franklin as a person. It's silly to discount everything great Franklin did because he held a position on slavery that was no worse than the prevalent opinion of the time.
Most of the "bad" people in history (e.g. Hitler, Pol Pot) acted worse than the standards of their time. Nobody's justifying them or their actions with this logic.
I agree that no one should discout Franklin's inventions and great ideas. That's why I was careful to mention them in my comment.
But I take issue with forgetting about this one aspect of Franklin's character because he was simply following the standards of his time.
The question is, standards for whom? Affluent white people? The standards certainly weren't acceptable to black Americans.
I know that I may sound nit-picky, but I think it's important to apply our current sense of morality to this period in American history. When we gloss over the uncomfortable details, we gloss over some of the lessons.
But changing bills every several years can also produce unintended consequences. If new bills are constantly arriving while multiple generations of older bills remain in circulation, it's hard to know what exactly what we should be looking for with each bill.
For counterfeiters, the best time to start generating old bills is probably right after the introduction of new ones. I'd like to think the government took this into account…