The Ukraine-Russia War has shaken the world in many ways. For Nordic countries, two of them share boundaries with Russia (Finland and Norway), a military invasion is no longer thoughtful. For Sweden, it can also motivate second thoughts about “no cash society.”
According to In a recent report to The Guardian, Sweden reminded of hybrid warfare attacks from Russia, including Cyberwarfare. It can overthrow critical infrastructure such as electrical grids on which digital payment networks depend. The Swedish government even advised its citizens to put aside some “cash” – just in case.
“The Nordics walks back to the Cashless Society initiative because their centralized concept implementation is too fragile. Cash turns out as a backup,” Ethereum co-founder Vitalik Baterin Na -Post On May 25, the Guardian’s story is referred to.
The Sweden payment market is almost completely digital. Debit and credit cards are the most common form of payment, and mobile based on payment apps such as Swish are also widespread.
But digital payment networks such as Sweden depend on access to the Internet, which requires electricity, and infrastructure can be vulnerable to natural disasters as well as terrorist actions and foreign military interventions.
A response to this weakness is the formation of a Version of offline Electronic Cash – So economic life can continue even if the internet drops or the country’s electric grid is damaged. This ability will be made more involved in Sweden’s Society, remember others, because not everyone now has a bank card or a smartphone.
Related: Trump’s consumer protection reforms can leave crypto users in a lurch
But it raised other questions. Is the offline electronic cash can be made? Is the required hardware in hand? If so, how long before a solution is implemented?
Also, is there a potential role that blockchain developers will play, as Baterin suggested in his May 25 post?
Government Advisory: Save cash for emergency
Sweden, along with Norway, has the lowest amount of cash in circulation as a part of the GDP in the world, According to In a recent report from Sweden’s Central Bank, Riksbank. But the Swedish government never had a clear approach to be without cash, Jonas Hedman, a professor at the Digitalization Department at Copenhagen Business School, told Cointelegraph.
This occurred as a result of market forces; Banks, merchants and consumers turned away in cash in favor of more conveniently digitized exchange forms, but now, according to Hedman:
Due to the Russian invasion of Ukraine, people began to maintain more money for a potential crisis. In addition, the government and Riksbank encouraged people to have cash in hand in the event of an emergency.
Offline e-paying a “absolute need”
The need for an offline digital cash option seems to get traction around the world. The Bank of England and the European Central Bank also explore offlines at E-Cash, Rohan Gray, assistant professor at Willamette University College of Law, told Cointelegraph, while Visa and MasterCard have been looking at an offline electronic cash alternative for many years. China has developed a Wallet Hardware Wallet that supports offline Digital Yuan’s offline payments.
China has many rural communities with no easy access to the Internet, and it realizes that “if it wants digital yuan, it needs to develop an offline capacity at the lowest level,” Gray said.
“The possibility of military and cyberwarfare, natural disasters and authoritarian shutdowns – all can have a significant impact on critical infrastructure, including the Internet and the industries that rely on it, such as banking and financial services,” Yash Kalash, Director of Digital Economic Research at the international governance Innavation (Cigi), said the international governance innovation (Cigi), Cointelegraph, adding:
This possibility plays the offline transaction capability of a full need and not just a convenience.
Sweden policy manufacturers are thinking more now about how their society works under durability, Kalash continues, and currently, they cannot move to a full digital payment system because offline payment technology is unavailable.
How long will it take to find a feasible solution? “I will say that three to five years from Scalable, privacy-maintain offline digital payment models,” Kalash said.
Until then, “hybrid” models that combine preloaded wallets, secure chips and communications based on the proximity-like NFC or Bluetooth-will dominate, he added.
Another problem with “double spending”
Keir Finlow-Bates, CEO and founder of the chainfrog-a research and blockchain research firm-has written about some of the challenges in designing an offline transaction ability. “I live in Finland, which is just as fast moving towards being a cashless society – and closer to Russia,” he told Cointelegraph. “But both issues apply when it comes to offline digital cash.”
Technical challenges are no different from those faced by years ago by crypto developers, Finlow-Bates explained. “In the end, it all drops to the double-spend problem.”
Related: Bitcoin’s new treasury can cracked under price pressure
Doubleing in the digital world is easy, and Satoshi Nakamoto, the founder of Bitcoin, remembers people who just copied Bitcoin. As finlow-bates write On a blog last year:
How can a digital construction work such a physical thing so that only one person can own it every time? That is the main problem when designing and implementing the offline digital cash.
Nakamoto solved the problem with decentralized cash systems and a proof-of-work validation protocol, but his model still requires access to electric and internet.
A paper for blockchain?
In his post, Baterin suggested that Ethereum could play a role in making more stable payment systems.
Cigi’s Kalash agreed that the blockchain would help. In an attack, blackout nodes will not be with transactions, but:
Blockchains can be potentially used to pre-authorize or pre-mint balance and credentials when a user is online and then allow safe, offline transactions through cryptographic proof.
These offline transactions will probably be located locally and then will be broadcast later on the blockchain when the connectivity returns, he explains.
Kalash added the caveat that technologies that enhance privacy, “such as zero-knowledge and secure Enclave hardware, promise but not yet ready to work for widespread civilian use.”
According to For Blerin, “We usually know how to do this, but to the limit that any solution depends on the trusted hardware and/or post the HOC implementation against the double-time sellers.”
“Worst” suffer more when cash is lost
Aside from the risk of a Russian revanchist, there are other factors that Sweden can recall its cashless society again. A significant component of people in Sweden still depends on cash, and their condition worsens when public transport, shops and services do not accept cash as payment.
“There are no public car parks receiving cash,” for example, Hedman explained. In practice, “it is very difficult to live in Sweden” today without a debit/credit card or Swish account, holding 80% of the population, Reported.
MOA Petersén, Associate Professor at Sweden’s Lund University, told Cointelegraph:
The continued disappearance of cash that does not affect socioeconically vulnerable groups, pushing them to margins.
A “no cashless society” is not realistic?
Perhaps a completely “cashless society” is just a dream of pipe, and Sweden and other digital advanced countries are just waking up to the fact that they will always need coins and paper bills as a backup – especially in times of geopolitical tensions.
“The answer to whether the cashless society is too utopian is ‘yes,'” Petersén replied, though not in the way some would expect. This led to a less inclusive and less democratic society, in its view, “where large groups feel disenfranchised and cannot participate completely.”
It’s not like the citizens of Sweden are clamoring for digital payments from the beginning, either. Technology has become available, and people are only exploited. It has been maintained since the time “of Sweden’s desire to maintain its image as a global leader in digitalization,” opinted Petersén.
That reason, in his point of view, is not a good basis “for changes in a deep social impact.”
Magazine: Older investors are at risk for a crypto -funded retirement
