Vitalik Buterin: Ethereum’s potential as “digital cash”

Author: VitalikButerin; Source: bitcoin.com
Although the use of cash in modern payment systems is declining year by year and is gradually being phased out, it still makes sense as an important backup payment method or its substitute in special circumstances. Ethereum co-founder Vitalik Buterin commented on this, saying that Ethereum needs to have the characteristics of cash to be competent for this role.

While Buterin discussed this topic on social media, he was inspired by the Swedish Central Bank's recent encouragement of the use of cash in the context of global conflicts.
Although Sweden has one of the lowest cash usage rates in the world, its central bank assesses that the use of cash becomes essential in the event of a hybrid attack that could affect critical infrastructure. The bank noted in its report:

"Measures need to be taken to strengthen preparedness and reduce exclusion so that everyone can pay even in crisis or war situations."

Buterin explained that this reflects that these countries are retreating from the "cashless utopia" they had previously promoted due to the inherent flaws of their centralized implementation, making cash a necessary backup option in such extreme situations.

“Ethereum needs to be strong and private enough to reliably play such a role,” Buterin concluded, highlighting the need for decentralized, off-chain, and private payment capabilities to be hard-coded into the Ethereum blockchain.

Despite the complexity that developing such a system may face, especially at the design level, Buterin noted that Ethereum has made significant progress in this regard.

“We basically know how to do it, but there are limitations, namely that any solution relies on trusted hardware and/or post-hoc enforcement of double spenders,” Buterin acknowledged the limitations of their current approach and emphasized these key dependencies.