Given that I'm on a cryptocurrency driven space I feel I need to state in advance that I definitely don't think that cash (fiat currency) is inherently more valuable than digital methods but the points I want to make are more to do with the psychology of physical exchange.
Saving is easier using cash
I always find when I draw out a set amount of cash as a budget I become far more conservative in my spending and I think the reason for that is quite simple, you actually feel like you have to give away something to get something in return, making the loss of finance far more "real" than just swiping a piece of plastic which in it's form remains unchanged whether it contains no value or a vast fortune. We obviously know the difference if we know our account balance and the value of cash is just as technically arbitrary but I think because we are conditioned socially to understand the utility and value of cash, a big wad of notes feels more valuable than a plastic card but of course that's just my generalised opinion.
I think the difference really is just the basic concept of exchange, when you pay with cash you actually give something away, when you pay with a card, the card remains the same after the transaction on the surface, although obviously in both cases you are equally aware of the expenditure, I think that the physical handing over of resources evokes greater consideration in transactions.
I think it's down to the human capacity to handle abstract value, because virtually stored value is far more abstract than the intrinsic (if still abstract) value of fiat money. It seems to me that the value of abstractions it determined by utility, that which has the greatest utility appears, at least on the surface to be of the greatest value.
I think that the biggest barrier cryptocurrency needs to overcome if it is to become the future of financial exchange is the fact its immediate utility is only a conceptual abstraction rather than something of obvious material value. It's an uphill battle; credit cards while more of an abstraction than cash, represent cash, which has its inherent value whilst cryptocurrency even if it worked as universally as a credit card doesn't have the same inherent sense of value. This is changing with BTC cashpoints and payments popping up in London and given the actual true market value of cryptocurrency as something that really isn't valued right now (in the mainstream), I think that it's still very early days from an investment standpoint.
(This is just a collection of random thoughts after a few beers)
