How much manpower and energy does it take to make a paper US dollar with nothing backing it up?

[EDIT] Since I'm getting downvoted, I'll answer my own question: $0.042 every 18 months.

I'm guessing that's the cost of printing a single dollar bill. There are also hundred-dollar bills, which presumably cost the same.

It'd be pretty interesting to get the total cost of printing, transport, and storage, and compare to the cost of maintaining a similar amount in bitcoins (which I calculated here: http://news.ycombinator.com/item?id=2602667).

Yes, that's a single dollar bill note, quickly grabbed from here:

http://www.enchantedlearning.com/math/money/bills/one/

I didn't count the $100 because I don't believe they're printed/circulated/destroyed/reprinted as heavily as the $1. Who knows about the 5, 10, 20 and 50.

I also don't think this $0.042 covers the labor cost of distributing, collecting, securely shredding and tracking the movement of all these bills through the system every 18 months.

I was thinking more along the lines of what the total cost might be. There's about a trillion dollars worth of cash circulating, but since it's not all ones we can't just multiply a trillion by $0.042.

In any case, it sounds like the bitcoin cost might be in a similar neighborhood to paper costs.

Printing money has in itself a cost in shifting resources from the market to the government or the central banks (or the financial sector in general).

Unless you live in Ted Kennedy's or Trent Lott's district, where the cotton farms and paper mills are.

For decades these senators continuously sabotaged measures to eliminate the paper Dollar and get the US entirely on dollar coins. The US is probably the last major economy to still be using paper for such small denominations.

...and in most other places, even the notes aren't paper/cotton anymore.

Good point. I have an Aussie bill somewhere in my drawer at home. That's a cool banknote.

Depending on where you draw the line between "major" and "minor" economies, the US can be the only major economy to do anything at all, since its economy is bigger than that of any other country.

However, in my recent and local experience, small-denomination paper is not so unheard of:

    Country   Smallest paper bill     in USD  PPP GDP/year
    Argentina $2                      0.50     $640B
    Brazil    2 reais                 1.26    $2200B
    Uruguay   $5 (now rare; usu.$10)  0.27      $41B

China uses a lot of paper notes - paper 1 jiao (about 0.02 USD) are fairly common. They're also really annoying.

That's not quite true. Bitcoins cost virtually nothing to create, but you are only allowed to create them if you succeed at securing a block of transactions. All of the processing power used in the Bitcoin network is designed to verify the transaction chain and prevent double-spending. The bitcoins generated as a result are just a reward to compensate people for their energy and hardware costs.

I recently looked into generating bitcoins, and that's not really true. Very little power goes into generating a successful bitcoin, true... But a LOT of power is wasted by failing to generate them. That's why it takes days, weeks or months (depending on processing power) to generate a successul bitcoin, on average.

You're confusing solving a block with creating bitcoins. The distinction is important (in my opinion), because it determines the reason all that processing power is needed.

A frequent mistake is to assume that all that processing power is used to make bitcoins hard to create. This is incorrect; the processing power is used to verify the block chain. The bitcoins created as part of each block are just a reward to make it profitable to participate in the network.

You're trying to win a lottery. With everyone racing to create a "solution" that fits the difficulty criteria there's no guarantee that you'll even win a block if you throw enough horsepower at it. A newcomer with a 900Mhz Pentium could find the correct solution on his first cycle.