Paul Glover felt dissatisfied with the way our current monetary system failed at providing fair trade and allowed for exploitation of people and resources. Therefore in 1991, he created his own currency to be used in Ithaca, New York in order to aid the local economy. The currency, called the Ithaca HOUR is not back by the federal government and cannot even be easily converted to the dollar. However, its value is set by one hour of labor approximated to be 10 US dollars. Residents of Ithaca who chose to believe in the value of this new currency benefited locally because of the stimulation of the surrounding economy.
While Ithaca dollars have fallen out of use, the idea of fair trade in combination with technological advancements has given rise to new forms of currency and financial dealings today. The recent creation of the new currency Bitcoin and new way of managing money through Venmo that arguably in some uses is its own new currency provide different pathways for exchange.
Bitcoin is a digital currency created by an anonymous person with the name of Satoshi Nakamoto. By using cryptography, bitcoins eliminate the need for a middle man like a bank or a government. Hence, there is no regulation on what individuals are spending their bitcoin on, but on the positive side there is no room for fraud or embezzlement because every single bitcoin is kept track of and checked by a series of computers and cryptography that I have failed to understand even after watching multiple documentaries and videos on the subject. Bitcoin is controversial because of its close relation to and perfect use for the Silk Road, an encrypted black market website. If the bitcoin is unregulated and promotes free trade, then what is to inhibit people from buying guns, drugs, and other things illegally.
Another new development is the creation of Venmo. While Venmo is not its own currency because it operates using US dollars, one does not have to link their card in order to operate the app and “pay” others. If one never links their venmo account to one of their bank accounts, then essentially they are operating in a new currency and have trusted that a venmo dollar is worth something and that others will think it is worth something too.
In all three of these systems, people put their faith into something essentially pulled out of thin air. Maybe in the future, the Bitcoin will rebrand itself into a currency that promotes free trade without also enabling illegal actions. If this is successful, maybe venmo will readjust so that you can either send dollars or bitcoins to each other.
