It isn't fun to lose some money, but isn't it great to find some? We've all found pennies on the ground, and sometimes a coin or two in a larger denomination. And sometimes you might have found some high denomination paper money. Once I found over £50 laying on the street in London and, after looking around for someone who might have dropped it, pocketed the cash and treated myself to a pint of beer.
Finding £50 is great, but in a first-world country that is hardly a life changing amount of money. But what if you did have a life-changing amount of money? What if you found 5 million USD?
That's a lot of money. With 5 million in your bank account you could start a business or retire young. You could pay off your mortgage or buy a new beautiful home. You could live well in your home country or live and travel anywhere in the world. Money is freedom, and a lot of money buys a lot of freedom.
But what if that $5 million USD wasn't in your bank account, but in a bag you've found in the woods? And what if that 5 million USD where in paper fiat money, gold, or Bitcoin Cash? What could you really do with that life-changing sum when found in those different forms?
Can you put it in the bank? Can you buy lunch? Can you spend it online? Can you pay a tradesman like an electrician or plumber? Can you buy a house? Can you travel the world? In other words, will a life-changing amount of money found in fiat, gold, or crypto actually be life-changing?
Note: this is written for my corner of the world, the usefulness of large amounts of fiat, gold, and crypto will vary country to country.
Disclaimer: don't mistake anything in this article for financial or legal advice. It is just a thought exercise for fun.
Fiat
What's in that bag? Hey... $5,000,000 in USD (or your local fiat currency). Gosh... that is a big bag. $5,000,000 USD in $20 bills weighs 250 kilograms, and those bills stacked together are 25 metres in length. I hope you drove your minivan to the woods.
Can you buy lunch or groceries? Yes. Your fiat money is accepted almost everywhere. Some forward thinking shops no longer accept cash payments, but most places still do. Pandemic aside, spending cash on meals and groceries is easy.
Can you deposit it in the bank? Yes... a little. In first-world countries it is most convenient to have your fiat currency in a digital form, not paper, and fortunately you'll be able to deposit a small amount of your paper money fortune into your bank account. However, any significant sum is going to raise questions about its origin, and good luck trying to deposit a mystery $5,000,000 of paper money into your bank account. The best outcome of that will be watching the money be seized by the government while you narrowly escape jail, and the worst outcome is... terrible for you. If you want a larger amount of money in the bank, then maybe you can deposit into your bank account piecemeal... but eventually that amount of money is going to raise questions and have consequences.
Can you spend it online? Maybe. While you can't spend paper money directly online, you can buy gift cards at real brick-and-mortar business and then use those cards online. However, you can't always buy gift cards with cash, so this could be tricky.
Can you buy a car? Yes, sometimes. People like cash, but they don't like massive amounts of cash. A car dealership is unlikely to accept more than a few hundred pounds of cash towards a car because they view large amounts of paper money as a risk and might even have to report large paper money purchases to the government. You might have some luck buying privately and second-hand, though.
Can you hire a tradesman? Yes, absolutely. Tradesmen are notorious for liking to be paid in cash because it allows them to pay less tax. In fact, they like it so much you'll be able to negotiate a cash-in-hand discount.
Can you buy a house? No. Sorry, even though $5,000,000 in your bank account can buy a very nice house, $5,000,000 in paper money can't. You aren't going to find anyone who can legitimately sell you a house for cash. However, if you rent and the monthly amount isn't too high, then maybe you can arrange to pay your landlord in cash.
Can I travel the world? No. $5,000,000 can take you anywhere in the world, but not if it is all in cash. You won't be able to buy plane tickets for cash, but you may be able to carry a few hundred dollars on you while travelling that can be converted to the local currency. Be warned that many governments require you to report if you enter a country carrying a significant amount of cash, and if you fail to report you might be arrested and your cash seized.
Can you pass on your wealth to your descendants? Yes, with caveats. You can definitely hand bags of paper cash to your children and grandchildren, but over time the value of the fiat currency will diminish. Fiat currency is a poor store of value. Also, unscrupulous governments might withdraw the currency from circulation thereby making it unspendable, like the Indian government did to 500 and 1,000 Rupee notes in 2016.
Overall, finding a significant sum of paper money could improve your life as you can use it for small day-to-day spending and can hire tradesmen for home improvements and repairs. However, paper cash is difficult to use for larger purchase because it will be viewed as risky or potential money laundering, and it also doesn't travel well through space (travel) or time (inflation).
Gold
Lucky you, while walking in the woods you stumbled across a hidden stash of gold and it is worth $5,000,000! Less lucky for you is that at the current spot-price of $55,000 per kilogram, that gold weighs just under 91 kilograms (to my surprise, that's less than the fiat!). I hope you drove to the woods, because you're going to need a vehicle to take that gold home.
Can you buy lunch or groceries? No. Your local cafe doesn't take gold. And nor does the supermarket so you also can't buy your groceries. Some countries, like the UK and the USA, mint novelty gold coins denominated in local currency with a low denomination, such as gold £10 coins sometimes issued by the Royal Mint. Maybe you could use one of those novelty coins to buy lunch as they are technically legal tender; however, the value of the coin will be the "face value", not the gold value.
Can you buy a car? Maybe. You won't be able to buy a car from a car dealership, as they will need to deal in their local fiat currency. Interestingly, I suspect you might be able to buy a car if you found the right kind of buyer on "craigslist", one who would take a few gold coins with no questions asked. Be warned, though, such a buyer might be shady.
Can you hire a tradesman? Maybe. Tradesmen like, electricians and plumbers, usually like to be paid in cash as creative reporting to the tax man can reduce their tax liabilities, so perhaps a you can negotiate for their services with some gold. You might be able to negotiate a discount, or you might need to pay a premium to cover the difficulty of dealing with gold.
Can you buy a house? No. 5 million USD in your bank account can buy a nice house, but you will be hard pushed to find a buyer that will take several kilograms of gold.
Can you buy fiat currency? Yes, with limits. You can buy fiat currency with gold, but to sell 91 kilograms of gold will undoubtedly require some invasive "know your customer" checks and proof of your ownership of the gold, which will be hard to provide if you found the gold in the woods. Maybe at small gold shops you can sell a bit here and there. And perhaps that is enough to live well.
Can you spend it online? Ha! No.
Can you pass on your wealth to your descendants? Yes. Any well brought up person will be immensely grateful to inherit some gold, and if history is to be believed the wealth embodied by the gold will still be valuable even hundreds of years from now. However, your 91 kilograms of gold is likely to give your descendants the same problems it gave you.
Overall, finding a significant sum of gold could improve your life, but only in so far as you can convert it to fiat currency. It is not useful for day to day purchases, and is unlikely to be useful for larger purchases, such as hiring a tradesman or buying a car or house. It is also difficult to travel with because of its weight and the eyebrows that will be raised if you are stopped by the authorities will holding any sum of gold. However, historically gold has been valuable and has successfully carried that value through time, so it will probably retain its value into the future.
Bitcoin Cash
What's that envelope on the forest floor? Oh... there is a QR code inside. Let's just scan that with my phone... hmm... it says install the Bitcom.com wallet... WOW! 9,000 Bitcoin Cash was just swept into my wallet--that's $5,000,000! The envelope and QR code fit easily into your pocket, nestled next to your phone.
Can you deposit it in your bank? Maybe. If you are willing to complete invasive "know your customer" and "anti-money laundering" checks, then you might be able to sell your crypto and have fiat money deposited into your bank account. Careful, though, as many bank have closed customer accounts for touching crypto currencies.
Can you spend it online? Yes, with caveats. Bitcoin Cash is "magic internet money"--but only with those websites that accept it. Fortunately, there are services like purse.io that allow you to pay with cryptocurrencies for products sold by Amazon and other websites.
Can you buy my lunch or groceries? Maybe. Some towns and cities have markets and shops where you can spend Bitcoin Cash in person to enjoy a fine meal, but many towns and cities don't. Many towns and cities have restaurants that you can order food online from using a third-party service which accepts Bitcoin Cash. If your very lucky you might be able to find a grocery shop that takes Bitcoin Cash.
Can you pay a tradesman? Maybe. Like with gold, you'll need to shop around, and introduce the idea and negotiate a price. Perhaps suggest the idea the next time a tradesman says he'll accept cash?
Can you buy a house? Maybe. A quick Duck Duck Go search produces a few articles about homes being sold for Bitcoin. And in Spain a property recently sold to investors for Ethereum. So... maybe at some point a home could be bought for Bitcoin Cash?
Can you travel the world? Yes. Some airlines now accept Bitcoin Cash for ticket purchases and some places, like Thailand, Antigua, and the "Bitcoin Cash City" of Australia, offer many locations to spend Bitcoin Cash. Bitcoin Cash is also very easy to transport because it really lives on the blockchain and not in the wallet you use on your phone. If you trust your memory, you can memorise 12 or 24 words and travel without a wallet and then "restore" a wallet with all your wealth when you arrive at your destination--no port authorities will ever know you are mentally transporting $5,000,000 across a border!
Can you buy fiat currency? Yes, with caveats. Unfortunately you'll need to go through an invasive "know your customer" process before you can sell your Bitcoin Cash. Unfortunately, if you have to provide evidence for how you acquired the Bitcoin Cash before selling, then you might be out of luck. Good thing you never plan to convert your Bitcoin Cash to fiat, right?
Can you pass on your wealth to your descendants? Maybe, if you make a plan. It is trivial to transmit wealth and value using Bitcoin Cash... but only if you are alive and well enough to do so. To pass on crypto wealth you must either do it while still living, or make sure the seed phrase for your wallet is available to your descendants, otherwise upon your death your Bitcoin Cash is forever lost.
Summary
In a first-world country it is more valuable to have money in a digital form than in a physical form. Visa and Mastercard are near universally accepted in the USA, UK, Europe, and Australia.
Paper fiat currency for any given country is legal tender, but in practice businesses are suspicious of large amounts of cash being used for purchases and will not accept it. Gold, despite its history of being "real" money, is even less accepted than fiat.
Crypto currency is far less accepted than fiat, but more widely accepted than gold. It holds an advantage over both fiat and gold by being digital, peer-to-peer, and borderless. It is the only real option for transporting large amounts of money when travelling.
Fiat, gold, and crypto to all have their upsides and downsides. If one of fiat, gold, or crypto does cross your path and enriches you, be grateful whichever it might be.
I know which I'd rather find in the wood. Which would you prefer?
