Cigarettes were long considered the common currency of prisons. Surprisingly, a study conducted last year actually found that ramen noodles were actually becoming the preferred currency for many prisoners because they were simply hungry. In Kenya, after a government, cellular minutes helped to stabilize the economy and soon became the number one form of remittances for families abroad. Some people are eve so good at couponing that they essentially eliminated the need for actual cash money.
Money is essentially a unit of exchange, and many alternative currencies, ranging from Bitcoin to ramen noodles, have become decentralized alternatives to the vast manipulation and mishandling of currencies issued by central banks and treasuries.
Following are four of the top alternative currencies that are shaping our world and transforming the true definition of money in the modern age.
Bitcoin is a computer-generated crypto-currency that is completely decentralized. A Bitcoin acts as a gold coin would; once you own a Bitcoin, it contains a certain value and has no need to be stored in a bank. All Bitcoin transactions are included within the public ledger or block chain, which are encrypted with transaction information. This has led many to declare that, technically, Bitcoin is forgery proof. Bitcoin has a physical limit of 21 million data files, which provides physical backing for its value—unlike a fiat currency that government declares legal tender.
A Bitcoin wallet can be set up on any user device. A Bitcoin is essentially a digital code attached to the block chain that contains the digital signature of the person who obtained the Bitcoin, as well as the history of everyone who bought and sold the Bitcoin block. Bitcoin’s public ledger does not disclose personal information. Bitcoin is used at many e-commerce stores, Microsoft being one the most notable, and can be used to buy and sell goods to people who accept Bitcoin as a transaction.
Berkshares are a hyper-local form of currency used within the Berkshire region of Massachusetts. Berkshares are traded at 16 local branches across four local banks, and accepted by 400 small business owners. Local currencies grew in popularity during the 1990s throughout the United States, with Berkshares being the most notable today. Berkshares are used for transactions within the local area in order to strengthen affinity and the relationships between businesses and consumers of the area.
Berkshares were originally distributed in 2006, and pictured local residents, such as W.E.B. Dubois. The exchange rate of Berkshares is $95 USD to 100 Berkshares, and exchanging Berkshares for US dollars at a participating bank incurs a 5% fee. Philadelphia’s Equal Dollars was another highly successful local currency experiment that ended in 2014.
In 2012, Nike famously created its #makeitcount campaign to auction off its products. The catch? Users couldn’t pay in cash for auction items but paid with their sweat. Using their Nike + app, digital smartphones would track the workout of a participant and transform these into credits for potential auction items. The auctions lasted 15 days and users could access auctions through their Nike + Auction app.
Nike’s sweat currency represents a reputation-based currency that rewards people based on their particular association to a brand, activity, etc. In 2014, Huge set up vending machines around NYC that distributed Nike products based on the same application credits.
4. Linden Dollars
Second Life made headlines 10 years ago when a number of entrepreneurs and businesses began setting up their own accounts to conduct business with Second Life players. Even Cisco set up its own virtual Second Life stand within the game. The game, created by Linden Labs, possesses its own in-game currency, called Linden Dollars that are easily exchanged for US dollars at an in-game currency transaction.
Second Life allows players to retain their own copyright for inventions within the game, and players have even been known to sublet property to other players. The economy of Second Life is representative of our own, which has led to the rapid boom of Linden Dollars being traded inside and outside the game. This alternative form of currency belongs in a category of its own.
Faith in the US dollar has been descending for years, and alternative currencies have presented great investment opportunities for people. The future of money may not be told in dollars and cents, but based on reputation or even merit-based currencies that completely alter our idea of exchange. A currency is only as strong as our faith in it. Maybe the solution to saving the US economy is to start printing gold Trump coins to make our money great again.