'The second question is whether consumers will use just one electronic wallet on their phones, choosing between, say, Google, PayPal and their own bank, or whether they will have several. Most analysts think that consumers will gravitate towards a single electronic wallet which will hold many cards. This is because there may be significant benefits to be gained from aggregating transactions and the data associated with them. For example, PayPal’s wallet will allow consumers to use various stores of value besides money when paying for goods or services. These could include coupons, loyalty points from stores and banks and air miles from airlines. PayPal stands to profit from steering customers into shops, perhaps by reminding them that they have unused coupons. It could also tell shopkeepers about the tastes of their customers, allowing retailers to make targeted shopping offers (“this would look great with the black skirt you bought last week”) or extend credit on the fly. -- Google, too, is hoping to do far more with its wallet than process payments, which it sees as akin to queries typed into its search engine. In the same way that it sells advertisements that are precisely targeted to a user’s search, it hopes to be able to deliver offers matched to people’s spending patterns.'

'What social benefit does humanity derive from gold bricks sitting in bank vaults? What social benefit does humanity derive by diverting tremendous amounts of resources into the mining of gold, just so that after the gold is mined it can sit in bank vaults, completely unappreciated for its aesthetic beauty. Those same resources could have been used to mine iron and make steel for the production of consumer goods. The argument might be made that humanity needs money to trade with, so therefore the social benefit is derived from the existence of a money. However, I would argue that is not true. Humanity needs a money that cannot be arbitrarily inflated and is created through the free enterprise system, but this does NOT necessitate that the money be backed by anything in particular. ...we can say that a “socially optimal” money should have the following characteristics, in addition to those already laid out by the Austrian School: #A socially optimal money should not precipitate the mass diversion of physical resources into the production of money. #A socially optimal money should be infinitely divisible to deal with deflation over the long term. #A socially optimal money is one in which the units of account are prevented from being inflated or co-opted by the state. Gold does not meet any of those characteristics. As we have seen from our past history, the state can easily co-opt a gold money supply and inflate the units of account. -- Bitcoin addresses all of gold’s shortcomings. Bitcoin is clearly a more “socially optimal” form of money than gold. Further, since Bitcoin is entirely digital, it can be transmitted across a wire transaction, thereby eliminating the need for expensive insurance and shipping costs. These costs needed to be accounted for under free banking, where banks would accept notes issued by other banks at a discount to cover the cost of transporting the gold between banks. With Bitcoin, this is not an issue. In fact, since Bitcoin is a global network, it would retain its full value between banks on differing continents! While I appreciate the gold standard and Herbener’s address to Congress, I think it is time we stop advocating for Roman era money and start advocating for a 21st century upgrade.'

'We are fast approaching a time when currencies will be serious differentiators and competitive wedges for companies simply because customers demand a particular payment type. The virtual gaming environments will be forced to adapt in order to survive. Gamers and virtual world avatars don’t want the corporations controlling their money anymore than they want central banks debasing the value of their real world money. Contrary to utopian social planning, free-market virtual economies will emerge spontaneously rather than through design and the ultimate victorious currency will be a market-based competitor that can move seamlessly across multiple grids. The virtual world is the perfect crucible for launching unrestricted currency competition and that competition will enable further opportunities for transporting virtual world earnings to real world value. This bridging of the two worlds could be the sought-after “killer app” for open-loop digital cash. Now, there will be three different mega-places for income and wealth generation — the traditional taxable economy, the informal shadow economy, and the virtual world economy. However, with the virtual world bitcoin wealth being selectively anonymous and practically untaxable, it may just decide to stay there.'

'Casascius Bitcoins are physical coins you can hold - and each one is worth real digital bitcoins. The "private key" is on a card embedded inside the coin and is protected by a tamper-evident hologram. The hologram leaves behind a honeycomb pattern if it is peeled. If the hologram is intact, the bitcoin is good. The 8-character code you see on the outside of the coin is the first eight characters of the Bitcoin address assigned specifically to that coin.'

'#Trust as Currency: Consider this example: Condie, who has no rep good or bad, posts a $1,050 escrow bond. The bondsman mints $1,000 worth of “trust Condie” coins and exchanges them for Condie's money. Condie then offers to paint your house for $100. You agree on terms and chop a contract. She gives you a $100 “Trust Condie” coin to back up her commitment of “satisfaction guaranteed for 30 days or your money back”. If Condie does good work you pay her. A month later you return her coin. If she spills paint on your driveway you redeem the coin from the bondsman with a copy of the contract and a photo. The coin is your proof that Condie is bonded and has not overextended her bond. Likewise she can redeem them all herself at any time for her deposit less fee. This works because the currency is specific to the trustee. It's not the same as Condie giving you a $100 coin of more broadly negotiable currency. You can only redeem it from the bondsman and only with evidence of misconduct.''

'In response to the US dollar's declining value some citizens and states are making moves to mint their own alternative currencies. At least one has been convicted on counterfeiting charges and labeled a domestic terrorist by the US attorney. More are still trying to get their currencies circulating. With the Fed talking about more quantitative easing and the country facing trillions of dollars in mounting debt - who is terrorizing the US economy and dollar?' -- Competition is a sin!

'The average life expectancy for a fiat currency is 27 years, with the shortest life span being one month. Founded in 1694, the British pound Sterling is the oldest fiat currency in existence. At a ripe old age of 317 years it must be considered a highly successful fiat currency. However, success is relative. The British pound was defined as 12 ounces of silver, so it's worth less than 1/200 or 0.5% of its original value. In other words, the most successful long standing currency in existence has lost 99.5% of its value. Given the undeniable track record of currencies, it is clear that on a long enough timeline the survival rate of all fiat currencies drops to zero.' -- 'As you scroll through the currencies below, you’ll see some long-ago casualties. What’s shocking, though, is how many have occurred in our lifetime. You might count how many currencies have failed since you’ve been born.' -- http://www.washingtonsblog.com/2011/08/average-life-expectancy-for-fiat.html

'...decentralisation has actually achieved defensibility against State confiscation since any other non-digital type of intrinsic value would be subject to confiscation via its centralised location. ...as the as the State-dominated monetary world inevitably expands, the value component assigned to a cryptocurrency for its survivability, or ultimate longevity, features may be greater than what the market assigns to its exchange value component. It may even be greater than what the market assigns to its value component for user-defined anonymity and untraceability. Without a world reserve fiat currency and the massive exponential debt from the centrally-planned monetary system, early leaders of Austrian economics probably would not have considered the disproportionate importance of mere survivability for a currency competitor. It was only slowly dawning on them that the power of the monetary monopoly was the most insidious monopoly of all and the most fiercely protected.'

'...even in the worst-case scenario where a government decides to back its currency with Bitcoin and all Bitcoin reserves flow to a central bank, Bitcoin’s power is its non-uniqueness. Change a few parameters of the cryptographic functions and you have an identical replacement for Bitcoin. Despite the demonstrated beneficence of a gold monetary standard, it’s all too easy to centralize reserves and “cheat” the system for political gain. Bitcoin, though it behaves economically very similarly to gold, is by nature institutionally much more robust, because it is more replaceable. There are clear reasons to prefer gold over silver, or one physical commodity over another, but there are not necessarily any such reasons to prefer one cryptocurrency over another. This very fact makes it very easy to “escape” should the cryptography of a series of currencies be compromised, or should a government attempt to monopolize or centralize reserves.'

'This is the reason why Bitcoins are valuable. There is no service like it anywhere. #You can get started with them instantly. #You do not have to identify yourself. #You can use them from any location. #You can send them to any location. #You can fund them with any currency. #You can spend them immediately. #Your transactions are private. #There are no taxes on transactions. #Transaction fees are so small as to be irrelevant, and if you are a miner, you get the fees back from other users. All of these features and more make Bitcoin a tool with a very high level of utility. Bitcoins are scarce, and you need them if you want to make purchases without the onerous and illegitimate predations of the State. No one who uses Bitcoin is going to accept GoldMoney as ‘digital currency like Bitcoin’. This does not, obviously, invalidate the immutable, irrefutable idea that the best money is gold. All it means is that on the internet, if you want to spend money, the best way to do it is Bitcoin.'

'Cypherpunk Fellow Traveler on the “Open-Transactions Financial Crypto System and Bitcoin Integration”. Traveler gives an intro to where this system came from from, motivations behind it, history. How to look at this system and what it does. Accounts transfers, Vouchers, Checks, Digital Cash, Basket Currencies, the Integrated Stock Exchange type Market features. And drum roll… Integration with Bitcoin… to fulfill the other need for Bitcoin: Anonymous and Instant transaction settlement.' -- Part 2: http://agoristradio.com/?p=246 -- “A bitcoin *is* backed in value, it's backed in real value, it’s backed in the unique properties it has… they cannot be confiscated, counterfeited, or shut down. People can still sit on gold and use bitcoin for transferring while they are doing some kind of untraceable thing…”

'This video is a short animated introduction to Bitcoin, made possible with donations from the Bitcoin community.'

'It is the very stability of the cash flow that allows a business to form around it. In fact, most cash flows are older than the businesses that grow around them. Buyers and sellers alike see markets as an illegible and turbulent churn of transaction opportunities. But really, they are landscapes carved out by great, ancient rivers of money and their tributaries. These rivers change course rarely. Cash flows are also among the most basic financial ideas. Some rivers of money are very old and very stable. You can at most fight to displace others from prime positions along the banks. Organizations are like riverbank communities. They are as old as the last significant course change or waterfront battle. The stability of the river, not the attitudes of people, is what makes old organizations seem set in their ways. Perhaps people resist new ideas not because they have specific personalities, but because they have settled on the banks of a river of money of a certain age.'

'We will not have an equitable nor a healthy economy in an information age, until we have information technology which empowers us equitably -- that is decentralized, peer-to-peer and operates by mutual agreement. We are building those technology tools, protocols and platforms. To fully meet our criteria, people need to be able to transact directly with each other with no segment of that interaction relying on a centrally controlled system. #Non-centralized rules (like the rules for money today) #Non-centralized database (as 99.99% are today) #Non-centralized namespace (like DNS) #Non-centralized address space (like IPv4 or IPv6) #Agreements are made by mutual consent #All levels of participation are sovereign -- Currency: a formal system used to shape, enable or measure currents. "If we measure different flows, we start behaving differently."'

'Here's a list of sites that accept Bitcoin.'

'Why is gold such a mystery? Why is it, along with silver, kept such a mystery? Gold particularly is kept such a mystery because it is the key to unlocking the currency markets, which long have been the most efficient mechanisms of imperialism. ...you have heard about the looting of Europe that was undertaken by the Nazi German occupation during World War II. But most of that looting did not take place at the point of a gun. No, it took place through the currency markets. ...the Nazi occupation simply printed for itself and spent huge new amounts of the regular currency of the occupied country. This control of the currency markets drafted every resident of the occupied countries into the service of the occupation and achieved a one-way flow of production—a flow out of the occupied countries and into Germany. For a few years Nazi Germany had one hell of a trade deficit. But being in the position to print the currencies for occupied Europe, Nazi Germany never had to cover that deficit.'

'What are young adults thinking about money and value? How can we create new systems of wealth generation and abundance? What does the future hold for banks and other financial institutions in the wake of massive peer to peer exchange?'

'If Amazon helps Facebook figure out how to make malls-with-walls and consequently make real shopping money, I have no doubt other e-tailers will follow. If PayPal’s 2009 revenue was $2.8 billion with 87 million active accounts, it’s not a stretch to predict that five years from now Facebook too will have 100 million to 150 million active Credits accounts (at least!) bringing in $5 billion in revenue from this business unit alone. Commerce is the grease that accelerates everything, so it seems like it’s just a matter of time before Facebook can acquire PayPal (for its volume, its risk management, and its fraud detection expertise) and fold it in together representing let’s say $12 billion in annual revenue five years from now, creating a true new currency for the world economy.'

'...a real-life currency accepted by local businesses and a corresponding set of rules where players collaborate to get the currency: The organisers distribute special symbol-coded bonds, each redeemable for an unknown denomination in Macon Money, $10, $20, $50 or $100. But they only distribute half of a bond per person. In order to redeem it and get paid (in full - each player gets the denomination, they don't split it), players have to find their opposite half, and go together to redemption areas. They can then spend the special Macon Money at participating local retailers. Distribution of the bonds will be orchestrated to achieve maximum mixing of Macon's various social sets, age ranges and races, hopefully 'changing the social fabric to make people feel more comfortable in their communities'. The game, which launches on 10 October, will use everyday events as well as new channels to help bondholders unite.' -- http://www.maconmoney.org / http://youtu.be/OT91aQTFHiY

'The new currencies have new measurement metrics for monetization such as awareness, influence, authenticity, reach, action, engagement, impact, spread, connectedness, velocity, participation, shared values, and presence. As market principles become the norm for intangible resource allocation and exchange, all market agents are starting to have a more intuitive and pervasive concept of exchange and reciprocity. Reputation has always been an important intangible asset, and was one of the first alternative currencies cited; however it was not really monetizable other than as an attribute of labor capital. Now, there are more alternative currencies, such as social currency, that are directly monetizable through social economic networks.'

'Physical cash is not the actual value, it is only a transfer mechanism. YOU have to trust your government that your physical cash is BACKED with real value. (Whether that is gold, or silver, or “their full faith and credit” or whatever they claim that their currency is backed with.) Digital cash is ALSO NOT actual value, it is ONLY a transfer mechanism. YOU have to trust the issuer of that cash, and the contract he used to issue it, [has backed it] with real value. And that is why Open-Transactions is designed as best possible to distribute risk across multiple issuers (through basket currencies) as well as distributing risk in other ways (across multiple transaction servers, etc). In OT, anyone can issue a currency. But the users still decide what they want to trade and who they want to trust. -- With Bitcoin you can’t choose to issue a currency based on gold, or silver, or based on a basket of dollars, bitcoins, and gold. You are restricted to one backing: computing power.'

'A solid, easy-to-use, CRYPTO and DIGITAL CASH LIBRARY. #UNTRACEABLE DIGITAL CASH: Once cash is withdrawn, the server has no way of tracking it or linking it back to its next deposit. #ANONYMOUS, NUMBERED ACCOUNTS, secured by public key cryptography. Your PGP key is your account, and the hash of it is your User ID. No other information is stored. #ANYONE AN ISSUER. Any user can design and issue his own currency: Simply upload the currency contract to any server. Anyone else with a copy of that contract can open an asset account in the new currency type. The currency contract is just an XML file with your digital signature on it. Hashing that file produces the currency ID, which is therefore unique and consistent across all servers. It’s impossible to change any details of the contract, including the URL, the signature, or the public key, without entirely changing the contract’s ID. #SEPARATION OF POWERS. The entities operating the servers are not actually issuing any currencies.'

'100 trillion Mark Note, Nov. 3 1923'

I owe no debt to JOHN SMITH. Said account having been adjusted in public policy to zero balance. There is no evidence to the contrary. I do not believe any evidence exists. The record is made and uncompromised. I therefore deny being subject to the jurisdiction of the UNITED STATES (etc) or any UNITED STATES vessels (etc) -- In the public, you have to expressly waive benefit/privilege -- you have to say so and do so. -- Whoever creates the liability must bring the remedy. -- Blue ink: When you sign something, you add credibility to it. -- Accepted For Value: Anyone who sends a bill, but doesn't also send a cheque to pay the bill, has created a liability in the public (in bankruptcy) without providing remedy. -- A coupon/remittance is a cheque. Accept it as valuable: write across it: "Accepted for value. Exempt from levy." Provide exemption ID number (your SIN/social insurance number). "Deposit to the treasury and charge to [your PERSON's] account." Sign and date. Send to the treasury.

'We define an electronic coin as a chain of digital signatures. Each owner transfers the coin to the next by digitally signing a hash of the previous transaction and the public key of the next owner and adding these to the end of the coin. A payee can verify the signatures to verify the chain of ownership. A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution. Digital signatures provide part of the solution, but the main benefits are lost if a trusted third party is still required to prevent double-spending. We propose a solution to the double-spending problem using a peer-to-peer network. The network timestamps transactions by hashing them into an ongoing chain of hash-based proof-of-work, forming a record that cannot be changed without redoing the proof-of-work.'

'"The total eventual circulation of Bitcoins will be 21,000,000 coins. There will never be more coins than that. The coins are entering circulation gradually, at a steady pace over many years, to nodes supporting the network in proportion to the CPU time they contribute." -- Bitcoin is an open source peer-to-peer electronic cash system that’s completely decentralised, with no central server, trusted authorities or middle men. The availability of bitcoins can’t be manipulated by governments or financial institutions. Each running instance offers a small amount of processing and storage resource to the network so that it can deliver the services it was designed for... The network is able to pay the users for the resource they offer by making the coin-creation process part of the network protocol itself instead of being handled by a central trusted authority. This creates a natural and incorruptible link between the supply of currency in the network and the demand for it.'

'If Facebook continues its growth on mobile platforms, then Facebook Credits will have the opportunity to become the default mobile payment currency accepted worldwide. Half a billion people would not have to sign up for an account to use them, because they already have the account. The data, learning, market research, and point-of-sale advertising implications are potentially limitless. The opportunity for Facebook Credits is to reward people for engaging with brands and retailers. If using Facebook Credits more often, or sharing information about their purchases results in discounts or even the earning of more Facebook Credits, you can count on consumers to reveal more to their friends and Facebook, as long as the value exchange is clearly identified. This kind of access to purchase habits and behaviors may finally be able to help justify using Facebook as a true CRM tool for brands, allowing for the tracking of sales back to influence and relationships...'

'Mutual credit is a type of alternative currency in which the currency used in a transaction can be created at the time of the transaction. Typically this involves keeping track of each individual's credit or debit balance. Although the effect is like a loan, no interest is charged, and since mutual credit allows for trading and cancelling balances with others, debts can be paid off indirectly. -- One economic advantage of mutual credit is that the currency supply is self-regulating--the money supply expands and contracts as needed, without any managing authority. The availability of interest-free loans is a great advantage to members of the system. The problem of exploiting the system by running up a negative balance is often addressed by caps on negative balance which can be raised as balances are paid off, or by limiting the system to a small, close-knit community based on trust, where the community holds people accountable.'

'Japan won’t be the only country to dollarize. Get ready…the dollar love you are going to feast your eyes on will be the next Black Swan in and of itself. -- Dollarization is nothing new under the sun: just an extreme from of exchange-rate pegging that strips a state of its monetary authority but leaves unchanged its fiscal authority. At its essence, dollarization is just another riddle of globalization. In one way it centralizes power; in another, it devolves it. -- #Creditors initialize dollarization and make it nearly irreversible, because they anchor their claims independent of government intrusion, and well in advance of any potential inflation increases. #The world interest rates and asset prices will be even more tightly correlated going forward -- People decentralize away from localized nation-state influence, but the increased interconnection of all people and places dramatically reduces the variance of possible behaviors at the global scale.'

'On the world horizon looms a new global currency that could replace all paper currencies and the economic system upon which they are based. -- The new currency, simply called Carbon Currency, is designed to support a revolutionary new economic system based on energy (production, and consumption), instead of price. Our current price-based economic system and its related currencies that have supported capitalism, socialism, fascism and communism, is being herded to the slaughterhouse in order to make way for a new carbon-based world. -- Forces are already at work to position a new Carbon Currency as the ultimate solution to global calls for poverty reduction, population control, environmental control, global warming, energy allocation and blanket distribution of economic wealth. -- Unfortunately for individual people living in this new system, it will also require authoritarian and centralized control over all aspects of life, from cradle to grave.'

Nobody knows.

'North Korean banks on Wednesday formally began a currency exchange aimed at wiping out much of the private savings people have accumulated through market activities. North Korea said Monday that new currency would be issued this week and said it would accept only a strict limit – amounting to around the equivalent of $40 – on the amount of old currency it would accept in exchange. The rest of the money would be scrapped in an apparent effort to make people more dependent on the government.'

'Reluctant to risk their lives by visiting a bank, many subscribers transferred money to each other by passing on the serial numbers of scratch cards charged with credit, like gift vouchers. Recipients simply add the credit to their account or sell it on to shops that sell the numbers at a slight discount from the original. This impromptu market has turned mobile-phone credit into a quasi-currency, undermining the traditional informal hawala banking system. -- Criminal rings are among the parallel currency’s busiest users. Kidnap gangs ask for ransom to be paid by text messages listing a hundred or more numbers of high-value phone cards. Prostitutes get regular customers to send monthly retainers to their phones, earning them the nickname “scratch-card concubines”, while corrupt government officials ask citizens for $50 in phone credit to perform minor tasks.'

'The value of your Whuffie is obtained from your online reputation by tracking your interactions with social networks and the feedback from your contacts.' -- Ponzi rises to the top. All gladhands on deck. Cult of reciprocity. Or is that just me being needlessly cynical?

'Banking is a con that is, not coincidentally, just a little too complicated for the average person to grasp unless they really try... If everyone understood what really goes on, who are the winners and who are the losers, it would be outlawed in an instant. The newest game by the banks is carbon emissions trading. The plan is to manufacture emission credit certificates out of thin air, trade them between big financial companies, and compel the rest of us pay for them by producing real goods and services. The new financial slavery. Carbon emission permits are the latest paper currency, brought to you by the same crowd who profited from the world’s largest financial bubble. Same structure, same modus operandi, same beneficiaries, same exaggerations, half-truths, and tricky government statistics. Banks want carbon trading. They do not make a profit from a carbon tax, which would be fairer and simpler. Governments are not offering a carbon tax, only cap and trade. Ever wondered why?'

'Greens and bankers make strange bedfellows. The bankers know where the Greens are coming from, but the Greens need to find out why bankers, “the paper aristocracy”, are so keen to save the planet. It’s an unholy alliance. Carbon credits are a fiat currency, the market will have the same players and similar rules: governments decree everyone must pay tax in dollars and… trade in carbon credits. The units are worthless without government backing. It’s a “free market” but at the point of a gun. Once we let this system in there is no easy way to back out. The vested interests are already massive. Last year alone $126 billion dollars was traded in carbon markets according to the World Bank. Projections are in the trillions. Literally. It will be the largest commodity market in the world—which is all the more ironic given that there is no commodity to back it—we don’t trade carbon, we trade the right to air that could have had more carbon in it.' -- OBVIOUS FRAUD IS OBVIOUS

'...the SDR is a currency, a form of money, that is rooted in the lending of the major creditor economies such as China. It is no wonder that China is seeking to have the basket include the RMB, as the RMB is the real funder of a large proportion of the SDRs. In effect, what a country like the US can do, is borrow money from China, lend the same money into IMF funding, and as a result can multiply access to even greater credit. Furthermore, the more money the US lends, the greater the control that the US has in the disbursement of money, as voting rights are tied to the amount of funding that is provided. What we are actually seeing in the issuance of SDRs is an illusion. There is, in reality, very little that might support them going forward, at least as long as their value resides in currencies that are being debased by their own central banks, as well as by the issuance of the SDRs themselves.' -- The insanity.

'The Brixton Pound (B£) is a local currency which offers a practical way for local people to vote with our wallets for a strong and diverse Brixton economy. It will be a complementary currency, working alongside (not replacing) pounds sterling, for use by independent local businesses and individuals trading within Brixton. Brixton will be the third Transition Town to have its own currency, following the Totnes Pound in Devon and Lewes Pound in Sussex both of which have been very successful and received national media coverage. Brixton will be the first part of London to have its own currency and the first urban area in the UK.' -- Awesome. Pretty soon, a locale without its own currency won't be worth living/investing in.

Historical overview with videos and interactive visualizations. (There's a positive mention of private, gold-backed. digital currencies in the Chapter IV: Expert Analysis > 'The Monetary System' section.)

'Ann Althouse, left, of the University of Wisconsin Law School and Douglas Rushkoff, author of "Life Inc.," discuss the historical origins of money.' -- Nice

"Physical currency is a bulky, germ-smeared, carbon-intensive, expensive medium of exchange. Let's dump it." -- *sigh* -- "Killing currency wouldn't be a trauma; it'd be euthanasia. We have the technology to move to a more efficient, convenient, freely flowing medium of exchange. Emoney is no longer just a matter of geeks playing games." -- Backed by... ? FFS, Wired, get a fukken clue.

'The dramatic difference in the results of Germany’s two money-printing experiments was a direct result of the uses to which the money was put. Price inflation results when “demand” (money) increases more than “supply” (goods and services), driving prices up; and in the experiment of the 1930s, new money was created for the purpose of funding productivity, so supply and demand increased together and prices remained stable. Hitler said, “For every mark issued, we required the equivalent of a mark’s worth of work done, or goods produced.” In the hyperinflationary disaster of 1923, on the other hand, money was printed merely to pay off speculators, causing demand to shoot up while supply remained fixed. The result was not just inflation but hyperinflation, since the speculation went wild, triggering rampant tulip-bubble-style mania and panic.'

In a "networked, participation based economy: #Network value would describe the access that an individual or organization has to new ideas and opportunities. #Brand value would describe reputation. #Social value would measure influence. #Knowledge would be measured through the number and quality of ideas and, finally, #Meaning measured through engagement. -- The measurable units of currency for networks might be #connections... For brand, reputation would be measured through #ratings... The influence generated through social value might be measured by tracking #conversations... identifying a universal measure for meaning might well be the most difficult... Somehow the stickiness of our experiences ought to be measurable and be an indication of how important to us any given experience might be [#engagement] -- Are these the right things to measure in an economy based on participation--and could their measurement result in some kind of sustainable system of growth and wealth creation?"

"All banks should be financial intermediaries that lend depositors' money, not engines for creating money out of nothing and lending it at interest. If banks can create electronic money at will through the process of fractional reserve banking, why shouldn't a democratically accountable central authority do the same. There is a direct link between the way money is created and the enormous debt bubble that preceded the credit crunch. The objective of monetary policy should be to ensure that the money supply accurately reflects the quantity of real wealth being created in the economy, and is sufficient to provide funds for new investment in real businesses to keep the economy ticking over. This is a difficult calculation to make, but under current arrangements nobody even attempts to make it. Central banks would be better placed than profit-motivated commercial banks to make that assessment." -- This, in the Guardian.

'An alliance of Latin American and Caribbean governments led by Venezuela will create a regional electronic currency that is expected to circulate by 2010, Venezuelan President Hugo Chavez said on Thursday. The leftist Chavez, who has called the global financial crisis the end of capitalism, has frequently urged allies to stop storing currency reserves in dollars and recently proposed creating an international currency backed by oil reserves. He did not offer more details on how the currency would work. In the past, Chavez has said the Sucre could one day become a physical currency. The OPEC nation's finance ministry on Thursday said it hopes countries outside the ALBA trade bloc, including other nations in South and Central America and the Caribbean, will later join in using the currency.' -- Backed by oil

'Super inflated Zimbabwe declared its currency, the Zimbabwean dollar a dead one and is no longer being printed.'

On fixing the money supply and sub-dividing units as price deflation occurs: "Instead of inflating the money supply, as an economy expands, the units of currency at the start simply increase in value. This does pose some practical difficulties, such as a unit of currency increasing in value so much that it becomes difficult to exchange for anything but ever larger items. To illustrate with an extreme example, if there were one thousand units of currency in the year 1066, then each unit of currency today hold nearly enough value to buy a city. The way around this is not to increase the units of currency, but to sub-divide the currency into smaller units. Just as today there are pounds and pence, as the value of a currency increases, it would need to be divided into pounds, pence and 'x'. At no time are any more pounds created such that the pound is never watered down. Dividing a pound into pence does not devalue the pound, it is the increase in supply of pounds that devalues the pound."

'.... a popular form of complimentary currency has grown up around cell-phone minutes. Today Kenyans use a service called M-PESA that helps people swap mobile-phone minutes as cash— you can literally pay for something at the store by transferring mobile minutes to the clerk's phone. Today the M-PESA is used for $10 million worth of trades a day, a figure that translates out to $3.6 billion a year, or about 10 percent of the Kenyan GDP.' -- Damn that's smart. Communications-backed currency.

'... the Federal Reserve Bank and U.S. Treasury issuing U.S. dollars is no different than online game currencies. Both are fiat currencies whose value is tied to over consumption. Online virtual currencies derive value from users spending more time than they should playing games, living above their time means. And the U.S. dollar derives value from U.S. consumers over consuming ’stuff,’ living beyond their budgetary means. Bankers, acting as croupiers of virtual currencies like the U.S. dollar, have been pumping fiat dollars into our economy like casinos in Vegas pumping in oxygen.'

'From dog-walking to rubbish clearance, civic-minded Estonians can now draw on a virtual Bank of Happiness which trades in good deeds. To become a client, an Estonian must register online, listing the useful things that he can do for others and those that he would like done unto him. “We call it a bank because we want to bring forth a new set of values”, says Tiina Urm, a 26-year-old who helped to think up the idea... “At the moment we are glued to other people only through money. But that’s not how we evolved as a society. We used to work as a team.” -- The helper also receives tangible evidence of his kindness: a “banknote” - printable from the bank’s website - offered by the grateful recipient in lieu of money, inscribed on the back with the date and nature of the deed. The note can then be passed on to another good Samaritan. And there is no system of equations to codify how one deed compares with another; the system will be self-regulatory.' -- Great thoughts on happiness.

'Users can gift Facebook Credits to other users, use them to purchase virtual gifts, or spend real money to obtain more from Facebook. Users in the beta test can give Credits to those not currently in the beta network, essentially inviting them into the test. At the current exchange rate, $1 is worth 100 Facebook Credits and new credits may only be purchased with credit cards. Other users, for example, cannot see how many Credits others have. Individuals can't even see their own Credits balance until they're trying to give Credits or spend at Facebook Gifts. Right now Facebook doesn't allow users to "cash out" Credits for real money, so if a user does get a lot of Credits, all that can really be done with them is to give them to friends or to use them to buy virtual gifts for friends. The currency is, quite literally, social.'

'The Twollars idea was conceived by Internet entrepreneurs Eiso Kant and Mac Taylor. They noticed that there was an enormous amount of 'social energy' on Twitter that goes unmeasured. They realised that if this energy could be converted into a symbolic standard, it could then be passed around like a currency. They came up with Twollars as that standard. Twollars passes all the tests. It is positive. It is social. It is a measure of energy that can be exchanged like money. It's a way to convert your 'good deed', your knowledge, your energy, your generosity it into a new form of money. By converting your Tweet into Twollars you can now pass that value on to others. You can reward others for their Tweet. And they can do the same. And soon you have new way of valuing and rewarding all the people you like, admire, and appreciate.'

'A majority of the money earned under our current currency system is earned by people who don't actually do anything. As such, all this speculation is a drag on the system. Speculators just bet on various companies' ability to pay back what they have borrowed. Thanks to interest, everyone must pay back two or three times what they have borrowed in the first place. The central bank loans money to a big bank at one rate of interest, that big bank lends to a smaller one at a higher rate of interest, and so on until it gets to the actual person or business using the money – who pays the highest rate. As a result, businesses can't be merely sustainable – they must grow. And a world accepting this economic model as reality must submit to the incorrect assumption that this is just the way things are.'

'... “sovereign currencies” play no beneficial role in a globalized world. “National monies and global markets, simply do not mix.” In the old days, the authors explain, countries could survive in their national fortresses with paper money sustained only by public trust, or occasionally by domestic force of arms. In a global world, they say, no country can. It is not enough that citizens dutifully accept the rise and fall of their own sovereign currency. Now a currency must be acceptable to foreigners, too. “In the [gold standard] past, governments made some effort to make their money acceptable to foreigners, and capital flows were enormous even by contemporary standards,” the authors say. “Currency crises were brief and shallow – wholly unlike today. The money flowing around the world [in recent years] has been a claim on – well, on nothing at all. These monies are conjured by governments as pure manifestations of sovereignty. The vast majority of such monies are unwanted.”'

Egill Helgason's interview of Gunnar Tómasson, a former IMF economist, on February 1, 2009 -- "#Egill: Is the system not salvageable? #Gunnar: It is not salvageable. #Egill: And must then a new world monetary system be created? #Gunnar: That's where the British party, Professor Patrick Minford, who was an economic advisor to Margaret Thatcher, comes into the picture. I wrote to him in January 1997 and that's where you have the answer to your question. The last sentence of my letter to him was as follows: "This [post-Bretton Woods] system is certain to come crashing down." You cannot put it any more clearly. I just wanted to have it documented. #Egill: And there is this enormous production of … #Gunnar: …money and paper wealth. Money and paper wealth out of all proportion to the national economy's output or that of the world economy. #Egill: And now we are facing this problem in the world, having to unwind this devilish mess … and people are completely at a loss about what to do."

Peter Schiff: "The Chinese are now talking about trying to move away from a dollar-based international monetary system, they're talking about maybe using special drawing rights from the IMF, which is a currency they issue that is backed by a basket of currencies – that's a step in the right direction, but it's still missing the point that currency has to be backed by something, to back one fiat currency with another fiat currency is tantamount to having no backing at all! The only reason that the dollar is the reserve currency is because the WAS backed by gold, if it wasn't backed by gold it never would have been the reserve currency." -- Gold.

'Lewes in East Sussex has introduced its own trading currency - the Lewes Pound. But will this alternative money help it to survive the recession? One Lewes Pound is equivalent to one pound Sterling. They can be bought at various places in the town, and can be used to pay for goods at over 130 local shops and pubs and they are given in change too. One local shopkeeper, Susan May, says that use of the pound has actually grown, not tailed off. For Susan, the scheme's benefits lie in the fact that it inspires loyalty to the town: locals are less likely to shop in Tesco, she claims, and will stick with the local retailers.'

'A number of west Wales towns are looking to launch their own currency in a bid to boost local businesses. The idea has come from the Transition Towns movement, which aims to make towns self-sustaining, to encourage people to spend their money locally.Helen Humprhys, clothes shop owner and joint secretary of Llandeilo chamber of trade said it would rely on all shops and businesses taking part but it had appeal. "Doing something that's taking us back to our roots, being more organic and helping each other out is old fashioned and a lovely way of living."'

"A south Devon town has taken a step towards having its own currency after a month-long experiment. Three hundred Totnes pounds were printed in March for circulation only in local outlets. Eighteen shops joined Transition Town Totnes (TTT), a new group campaigning for a more self-sufficient community. The experiment, which has just finished, could be followed up by another print-run of 3,000 notes later this year. TTT based the idea on a similar scheme in the Southern Berkshire region of Massachusetts, US. There the alternative currency, Berkshares, can be swapped for dollars in banks."

'It's the root of all evil: Azerothian gold. The irony is that the players never actually see their gold — no piles of virtual treasure to roll around in, just an icon in their backpack with a number next to it. This number is the key to the finest mounts, good equipment, life-saving potions, power-enhancing elixirs, food and drink, ammunition, armor repair bills, and everything needed to play more World of Warcraft. to continue earning gold, to play more WoW, to make more gold, to play more WoW, and on into infinity.'

'The next great leap of the digital age is ... toward cryptographically sealed digital streams [of money] ... Who is going to create the monetary value? In other words, who will back up the money, assuring trust. Will it be government? Banks? Visa? "A dollar bill is a piece of paper - what's the difference between that and another piece of paper?" asks Sholom Rosen of Citibank. "It is the ability to present that piece of paper and get assurance of a return. It's not backed. There was a time when it was backed, but those times are gone. What gives it value? The banking system. The paper is the liability of the banking system. The supply of money is grown and disappears in the banking system." Yet others seem to think that, if universally trusted, a digital currency system can, in effect, float on its own momentum. "If you have money on the network, you can make private money on the network," says Eric Hughes, a co-founder of the privacy champions, the Cypherpunks.'

"Currency specialist Avinash Persaud has long argued that the dollar would give way to the Chinese yuan as a global reserve currency within decades. A shared reserve currency might negate this move, he said, but he believed that China would still like to take on the role."

Analysts said the new Kremlin proposal would elicit little excitement among the G20 members. "This is all in the realm of fantasy," said Sergei Perminov, chief strategist at Rye, Man and Gore. "There was a situation that resembled what they are talking about. It was called the gold standard, and it ended very badly.' -- How could it not end badly??! -- '"Alternatives to the dollar are still hard to find," he said. The Kremlin's call for a common currency is not the first in recent days. Speaking at an economic conference in Astana, Kazakhstan, last week, Kazakh President Nursultan Nazarbayev proposed a global currency called the "acmetal" -- a conflation of the words "acme" and "capital."' -- Erm...

"This is the sound of the other shoe dropping; it’s what happens when the chickens come home to roost; it’s justice, equilibrium reasserting itself, and ultimately a good thing. The thing that is dying—the corporatized model of commerce—has not, nor has it ever been, supportive of the real economy. It wasn’t meant to be. We do not live in an economy, we live in a Ponzi scheme. Using future tax dollars to give banks more money to lend out at interest is robbing from the poor to pay the rich to rob from the poor. The current financial crisis is the best opportunity we have had in a very long time for a bloodless revolution against the faceless fascism under which we have been living, unaware, for much too long. Let us seize the day." -- Brilliant explanatory rant. Recommended.

"GoldMoney for the iPhone enables you to exchange units of digital gold and silver. It's quick and secure, allowing you to make transactions with ease. Check your balance, make payments and review your transaction history all from one easy to use interface. GoldMoney has established a patented currency, goldgrams® (1 goldgram = 1 gram of gold), to give customers the ability to make gold payments to each other electronically." -- Gold

"Essentially, China has expressed awareness of the delicacy of the position of the $US, but has still suggested a commitment to $US assets. The US government is clearly nervous of the situation, as can be seen in Hilary Clinton's begging bowl mission to China, which took place with unseemly urgency. Whilst China is making reassuring noises, this does not necessarily indicate China's actual intentions. ...it would be likely that, even if selling treasuries, China would still make reassuring noises to prop up the value whilst they were undertaking the sales. ...the current US policy might be summarised as an expansionary spending binge, with no clear plan on how to pay back the borrowing. This will hardly conform with Chinese expectations of protecting their investments, and the Chinese government will surely not be taken in by Obama's rhetoric." -- "The flaw is that, if China were to follow such a course, it would also risk self-destruction."

Volker: "This is a unique moment in economic history where the world is going on the basis of fiat currencies." -- No shit.

"The essential problem is this. All around the world, economies are in free fall, and resources directed to problems at home will be the absolute priority of each country. In such circumstances, the possibility of countries being able to finance their deficits through overseas borrowing looks to be so unlikely that it remains close to impossibility." -- More on the divisional currency idea..." A few people have suggested that division of a unit of currency into smaller units is expanding the money supply. This is a very different process, as you are not changing the number of units of the actual currency. ...we are not diluting the value of the £1, we are merely allowing it to be chopped up into smaller units, for example coins. Any holder of £1 is not losing anything, as this has absolutely no effect on the £1 that they hold. The important part is that, as the new units are called upon, each 100 pence issued sees the removal of a £1 note. The money supply remains the same..."

Comment: Ben: "A couple more reasons for wanting to avoid deflation; #2. Assume deflation of 2%. Banks need to pay some kind of interest to attract deposits (say 0.5%). To make a profit, they need to be lending at another 1%, say, above what they are paying on deposits. This means lending at 1.5%, a real return of 3.5%. -- If there was inflation of 2%, banks can pay their depositors 2.5% (0.5% real return) and lend at 3.5% and the real return charged on their loans is only 1.5%. -- The numbers are fairly arbitrary but I hope the principle is clear. A potentially profitable, wealth creating business would have to be able to produce a real return of 3.5% in the deflationary scenario to be viable, but only produce a real return of 1.5% in the inflationary environment to be viable." -- See the 'Divisional Currency' model inside for potential solution to this conundrum.

A transcript of Vladimir Putin's speech at the World Economic Forum in Davos, Switzerland: "In the 20th century, the Soviet Union made the state's role absolute. In the long run, this made the Soviet economy totally uncompetitive. This lesson cost us dearly. I am sure nobody wants to see it repeated. Nor should we turn a blind eye to the fact that the spirit of free enterprise, including the principle of personal responsibility of businesspeople, investors and shareholders for their decisions, is being eroded in the last few months. There is no reason to believe that we can achieve better results by shifting responsibility onto the state. -- Excessive dependence on a single reserve currency is dangerous for the global economy. Consequently, it would be sensible to encourage the objective process of creating several strong reserve currencies in the future. It is high time we launched a detailed discussion of methods to facilitate a smooth and irreversible switchover to the new model."

'"People can see that the only solution to the credit crisis is to devalue all fiat currencies," said Peter Hambro, chairman of the Anglo-Russian mining group Peter Hambro Gold. "The job of central bankers is to allow this to happen in an orderly fashion through inflation. I'm afraid it is the only way to avoid disaster, but naturally investors are turning to gold as a form of wealth insurance." One analyst said the spectacle of central banks slashing rates to zero across the world and buying government debt as if there was no tomorrow feels like the "beginning of the 'Zimbabwe-isation' of the global economy".'

A commonsense: 'Neuroscience is confirming what we all suspect: Multitasking is dumbing us down and driving us crazy. -- The Multitasking Crash. The Attention-Deficit Recession. -- Our freedom to stay busy at all hours, at the task—and then the many tasks, and ultimately the multitask—of trying to be free. This is the great irony of multitasking—that its overall goal, getting more done in less time, turns out to be chimerical. In reality, multitasking slows our thinking. It forces us to chop competing tasks into pieces, set them in different piles, then hunt for the pile we’re interested in, pick up its pieces, review the rules for putting the pieces back together, and then attempt to do so, often quite awkwardly. ...What has the madness of multitasking cost us? (Six hundred and fifty billion dollars...) The better question might be: What hasn’t it?' -- Hehe. NO BAILOUTS FOR THE ATTENTION ECONOMY!

"The only real solution to the endless and distorting tinkering of these central banks is to actually remove from them their facility to create money from nothing. In practical terms, that means to go back to a commodity based standard - whether gold, platinum or silver really does not matter. As it is, we can see that these tinkerers are not really to be trusted, and that their current tinkering in each individual economy can only set up new ripples and distortions in the world economy, whilst all the while the ripples and distortions of the activities of other central banks will only serve to confound their own plans."

"Virtual reputational economies show that reputation can be gained, lost, traded, protected, and shared, all in property-like fashion, without regard to whether it has independent economic value. In other words, reputation is not merely valuable; it is the new New Property. Having defined status as a kind of property, it is possible to further subdivide the virtual reputational economies: social networking platforms like Facebook and MySpace present one model; anonymous blogging and commentary another. In at least one important way, the former are more like online economies than they are like virtual world economies—the status they create and destroy exists both online and in the real-world reputational economy. Individuals use their real identities in these forums and often interact with people with whom they also have off-line relationships. Thus someone whose reputation is ruined in the online reputational economy likely loses it in the real world as well."

'The vigorous culture of guanxi tends to strongly intertwine game activities with real life activities. ...the art of doing guanxi resembles a kind of game play, a skilled activity that is marked as social, not work, amateur not professional, personal not official. ...guanxi [is] quite compatible with online gaming: a place in which to make social connections, feel human closeness, and maintain friendships over time, with a distinct feeling of being apart from the 'non-game' 'official' 'real life' world... Quality guanxi is often associated with a moral and ethical attitude, as well as mutual reliance on each other, which converts into face/status for both guanxi partners when exposed to others... Emotional aspects of the material and instrumental exchanges that come together in guanxi are not easily visible to outside observers, and the combination of instrumentlism and sentiment thus often appears contradictionary and leads to asociations with corruption and bribing.'

"The country is in the grip of world-record hyperinflation which has left the Zimbabwean dollar virtually worthless - 231m% in July 2008." -- Crazy. And now they've got US dollars. Oh, the lulz.

"... the argument against the collapse of the $US is actually a belief that a world in which the $US is not the reserve currency is an impossibility. This is not an argument, but an act of faith... Do the defenders of the $US as a reserve currency think that the creditors have not noticed that they are sitting on piles of paper they can not use? Do they think they are not analysing the US stimulus plan and not going through every detail looking for the time when they will be repaid for their loans? They are sitting on their reserves, and probably wondering if they will ever be of any use, of any value. With more money being pumped out, they will be getting very agitated. When they look at the stimulus plans, all they will see is ongoing deficits, and no plan for return to a surplus. Ever. $US reserve holders [...] must finance the US deficit and trade imbalances, or the $US is junk, and the world economy becomes junk with it." -- The mother of all frauds

"if the $US depreciates, and the RMB does not appreciate, the US will (quite reasonably) howl with rage, and will take protectionist measures. If that is the case, China can say goodbye to one of the major export markets. ...what China has done is accumulate currency that it dare not use as, if it uses the currency, it will destroy the currency. The only solution available will be to try to discreetly sell as much of the currency as it can without 'spooking' the markets. The trouble is that, with so many countries holding these $US reserves, most of whom have their own economic problems, it is likely that everyone is having the same thoughts, and confronting similar problems. What you have is a situation in which there is something like a Mexican stand-off. As soon as one starts selling, then everybody must start selling. They are all, at the same time, terrified of selling, because in doing so, they destroy the value of what they are selling. It is a time bomb just waiting to go off."

"All that has happened is that the reality of the situation has been obscured from us through a series of bubbles. The dotcom bubble, the telecoms bubble, the stock market bubble, the housing bubble and the credit bubble. One after another they have come, but the greatest bubble of all will be the final bubble to burst - and it will explode our complacency. This final bubble is the currency bubble. In the case of the £GB it has been rapidly deflating, but is now set to burst. In the case of the $US, once it starts to deflate, it will pop violently. Of all the factors that have hid our underlying economic fragility, the currency bubble is probably the most significant. In crude terms, those who have been selling all the commodities, goods and services to us have been lending us the money to buy their output. As a result, they have amassed huge amounts of our currencies, and are now starting to realise that the paper they exchanged for goods has no meaningful underlying value." -- = FAIL

"Zimbabwe's central bank will introduce a $100 trillion Zimbabwean banknote, worth about US $33 on the black market, to try to ease desperate cash shortages, state-run media said on Friday. Hyper-inflation has forced the central bank to continue to release new banknotes which quickly become almost worthless." -- @GordonBrown