Yes, every bill has a serial number. Do the ATM's actually record this ? What if you scratch the bill, so the serial number is difficult or impossible to read, have you twarted the tracking then ?

So, if I take a 100 USD bill out of a bank in NY, then this leaves my hand, and then finally 2 weeks later, a coffee shop owner deposits it in his bank account, how do we know where the bill was between the time it was withdrawn and the time it wa deposited ? Was there 1 intermediary, 10, 20 ? We can't and won't know at all. We do not know where this bill travelled.

And do the bank register the serial number when bills are deposited ? I'm not sure about that. Seems like loads of work, for little benefit. And as we know, the banks are all for profit making, and if a task doesn't contribute to that, they don't do it.

I think that serial numbers of bills are only used in certain cases, for instance when ransom money is paid, and law enforcement want to attempt to track it.

Now, how could you possibly create money out of thin air? If you're the govt. you could of course just print it, or go to a pc and select add 10 million usd to the economy. The processes are more complicated than that but you get the point.


Now if you and your friend wanted to risk becoming criminal to make a lot of money, what you could do is to somehow make the bank accept a loan application. They will create the money out of thin air, on the promise that you will later pay it back (ie. backed by depth). So if this money is transferred to another bank, and withdrawn there, the original bank loses nothing. Because they never had the money in the first place. It's quite the intriciate system. See money as debt documentary to learn more.

But yes, bitcoins are more traceable by default than cash. You can see every hop bitcoins do through the public ledger, the block chain. Once the USD bills leave a bank, there's no way of tracing them.