Layer 1 state-issued physical cash
Counterfeit chips are rare. High levels of surveillance, along with staff familiarity with chip design and coloring, make passing fake chips difficult. Casinos, though, are prepared for this situation. All states require that casinos have a set of chips in reserve with alternate markings,[] though they may not be required to have exactly the same number of reserve chips as they do on the floor. The most notable instance of counterfeiting chips was broken up in 2005, when two men were caught falsely converting $1 chips into higher denominations.
TF: We can analyse the differences that occur when the different issuers issue their different layer tokens in digital or physical form
PayPal and Circle are big players, but there are many tiny issuers of Layer 3 money. In the US, this could include pretty much every business that issues dollar-denominated vouchers and gift cards, or gaming platforms that issue online game currencies. If you have an account with any non-bank institution that also has a money balance associated with it (for example, a Euro balance in stockmarket account, a pound balance in a UK online horse-betting platform, or dollar units in your Uber Cash account), they’re probably going to be Layer 3 chips. Some of these get rebranded with a new name - such as ‘Amazon Coin’ - in which case they get called ‘virtual currencies’, but in essence they’re just Layer 3 chips.
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Cashless society: Probably the biggest meta-battle going on right now is between Layer 1 state money issued by central banks and treasuries in physical form and Layer 2 digital bank chips. The ‘cashless society’ debate is really about whether the Layer 2 players should take full control, or whether a balance of power needs to be maintained by protecting the cash system. I’m a big advocate for defending the balance of power.
Denominations above $5000 are almost never encountered by the general public; their use is usually limited to "high limit rooms" where bet sizes are much greater than on the main floor. Casinos often use gaming plaques for these denominations: These plaques are about the size of a playing card, and must be marked with . The greatest value placed on a plaque to date is $10 million, used at the London Club in Las Vegas.
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As the game progresses or blinds increase in a tournament, players may strategically deploy higher-denomination chips. This can be a tactical move to pressure opponents with smaller stacks, forcing them to make tough decisions. It also allows players to take advantage of their stronger position in later stages when the stakes are higher.
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Most Layer 3 systems don’t (at least officially) have a ‘fractional reserve’ element. They’re a normally fully backed, which means every Layer 3 chip is supposed to be matched by a Layer 2 chip somewhere else in the system. If you see 100 dollar units in your PayPal account, you’re supposed to assume that PayPal is holding 100 dollar chips in its bank account somewhere (or at least something that can be easily sold for dollars, like US government bonds).
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