Either something like paypal, or alternately something like a private enterprise that absorbs a lot of money from people – like a large web-gambling business. Where did this five hundred dollars go, Mister Jones? Lost it at the tables.

MMOs and other arenas where one buys considerable numbers of intangiable goods are also potential hotbeds for this.

This is also not to mention the wide, wide variety of other ways of spending your money – if your local corner newsagents happens to deal a few grams on the side, who the hell is going to know that you bought yourself something illegitimate rather than a few top-shelf glossies?

The real issue is not whether or not the currency is virtualized, it’s in the accounting practices of businesses.

great post… there is more than the black economy at stake, however. government will also use e-cash records to chase down its enemies.

I’m very intrigued by the idea of negative interest rates. By eliminating the need for interest rates to remain at or above zero, the economy would not require the irrational growth that makes it so incompatible with sustainibility. Consumption could be reduced across the board, and the economy could continue to opperate smoothly.

Is my logic correct here?