The United States federal government releases an annual budget report every year. The document compares financial forecasts and expenses from previous years to the actual working budget and the current year’s projected budget.
The data in the most recent accessible report says that US taxpayers spent about USD 801 million printing their new fiat currency (a process which includes destroying the old specimens). The agency in charge of using this money is the Bureau of Engraving and Printing.
Physically transporting the newly printed money around had a cost of USD 24 million. Then another 20 million were needed for quality control and research and development. You’ve heard the expression that it takes a buck to make a buck? Well, this is the case in which that’s painfully literal.
The cost of money
The latest budget plan includes reimbursement for the BEP at the tune of USD 210 million. That’s supposed to pay for the BEP’s facility expansion in Texas as well as to begin work in a new facility that should replace the currency production facility currently in Washington.
The funny thing is that most people don’t even suspect that manufacturing money actually costs money. And the process is actually very complicated technically (and not cheap at all), so it just leaves you wondering why are governments still using the old methods to produce their new currencies.
The world is different now than it was decades ago when fiat currencies were not fiat at all but pegged to gold. Now we don’t have gold-based money, but we also do not need as much cash as in the past because other means of settling payments have appeared such as credit and debit cards, prepaid cards, micropayment systems in your mobile, etc. However, it would seem that cryptocurrencies will end up being the way to go to allow even local legal tenders to avoid most of their production expenses.
The USD and counterfeiting
Counterfeiting is the elephant in the room when it comes to fiat currencies. Just in 2016, USD 82.1 million worth of false notes went into circulation with all success. Not even 12% of all those (USD 10,4 million) were noticed before they were in the world’s money flows.
The 2018 budget overview for the US Department of Homeland Security considers that less than 1% of the circulating currency is indeed counterfeit. This could sound insignificant in the magnificent view of things. But since the USD circulation is so high and used all around the world, that seemingly unimportant 1% equates to USD 10 billion in fake notes that are floating around all over the world and giving the USD a lousy name.
So that problem worth USD 10 billion could be solved quite easily by implementing a blockchain or a cryptocurrency correctly. The cryptographic calculations needed in the creation of new blocks guarantee that you can’t counterfeit even a single dollar.
And it’s not just the cryptographic technology but the decentralization in the ledger. Any of those mechanisms are enough to guarantee authenticity in every coin, but, if you should need more security, then a simple counting operation suffices. If additional coins were being forced into the system, you could notice them right away because they wouldn’t fit into the network’s ledger or the pre-mined coins in circulations.
But you would need a functional, safe cryptocurrency, of course. Not all of them do the trick correctly. Some have recently had attacks that modified the supply data, and nobody noticed from quite some time (Zcash, or ZEC, more recently).
Our point is this: crypto adoption can help taxpayers from all over the world to save a lot of money. They’re cheaper to produce, immune to counterfeiters, and easier to move around. Adoption is inevitable. But not imminent.
Disclaimer: The presented information is subjected to market condition and may include the very own opinion of the author. Please do your ‘very own’ market research before making any investment in cryptocurrencies. Neither the writer nor the publication (TronWeekly.com) holds any responsibility for your financial loss.