*guest post by Sheila Kurdinger
Physical money is a concept that is prevalent in the society from the time humans realized the need to purchase products. The practice initially started with the exchange of goods in return for other products of immediate requirement. Gradually with the increasing demand of humankind the need to develop a much more convenient way of buying and selling products became mandatory. Doing transactions demanded a physical medium which resulted in minting of the first kind of coins.
Precious metals used to make coins years and years ago:
Years ago when the first coins were minted precious metals were used to make coins. These metals were carved with stones to produce standardized coins. So we can clearly see that since the advent of the concept of physical money its cost has always been very high. Precious metals that were used to manufacture these coins were sometimes even costlier than the products they were used to purchase. It sounds strange but such was the demand of a physical medium for meeting the requirements of people. Nickel pennies manufactured were often much costlier than their worth.
Since historical times the cost of minting coins and cash has been an issue of concern. Economists are trying hard to find out a substitute, but the impact of physical money is so deep rooted into our society that it is almost impossible to remove its dominance. According to some research scholars more than 200 million dollars are spent every year in minting coins and printing money on paper. This is only with respect to economy of The United States. If the whole world is considered into the estimation the figure will be unimaginably enormous.
Recently some countries stopped minting pennies because of financial issues. Other underdeveloped countries cannot think of such a scenario as they are too dependent on pennies for survival. People often fail to notice how much physical money costs as it is unknown to them and not highlighted much. Printing money on paper and minting coins on a macro scale costs a lot. Even if we ignore the costs of printing machines, labor, employees, paper, running such a huge administration , then also the cost of printing in such a large scale is itself is too high.
Will there be a day without physical money?
The internet has been able to reduce the demand of physical money to some extent. A person who is well connected can use a debit or credit card to perform a lot of transactions online. This not only saves time but from a global point of view it has slashed the need of physical money by a huge margin.
With the increasing dependence of this generation on the internet, banks, ATMs and various other similar commodities, there has been a reduction in the need of physical money but its traces have spread way beyond measurable limits. Thinking of a generation where physical money will be history is a dream of every economist but it is vague to keep faith in such a dream as physical money has made an unshakable and robust place in the society.
Sheila Kurdinger has worked with some major real estate brands like Dwellus.com. WIth a background in digital media communications, she has had a strong learning curve in the internet marketing world. At the moment, she is obsessed with interesting infographics and how data visualisation is carving a niche for itself altogether.