[FAQ] Alternative Currency : Introduction & References
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Alternate Currency
An alternative currency is any currency used as an alternative to the dominant national or multinational currency systems (usually referred to as national or fiat money). Alternative currencies can be created by an individual, corporation, or organization, they can be created by national, state, or local governments, or they can arise naturally as people begin to use a certain commodity as a currency. Mutual credit is a form of alternative currency, and thus any form of lending that does not go through the banking system can be considered a form of alternative currency.
I owe my soul to the company store
In 1955 Tennessee Ernie Ford had a No. 1 hit with the song “Sixteen Tons,” which described the hard life of a Kentucky coal miner in the early years of the 20th century. Besides their backbreaking work, such workers often had to deal with being paid in company scrip rather than cash. They thus were forced to spend their pay in stores owned by their bosses, which meant saving money and shopping around for good deals were not options.
That kind of system is not just a relic of America’s distant past. Mexico’s Supreme Court ruled in 2008 that Wal-Mart’s subsidiary in that country was violating the constitution by paying workers, in part, with vouchers good only in its own stores.
TEMs - Cash for a Greek crisis
The economic crisis in Greece has made euros scarce in parts of the country, forcing many Greeks to barter for what they need or find other ways to pay for everyday goods and services. In the port city of Volos, 200 miles north of Athens, locals developed an alternative currency called TEMs. People earn them by doing jobs for one another; instead of being paid in euros, they get credits called Local Alternative Units (TEMs in Greek) for their labors. The credits are stored in an online account and can be used to buy goods and services from others in the town.
G.I. banknotes
In an effort to keep their dollars from destabilizing local currencies, military personnel in some countries were paid with colorful paper notes called Military Payment Certificates or MPCs. The practice began after World War II in Europe and continued until just after the end of the Vietnam War.
The idea behind the MPCs, also known as scrip, was to avoid disrupting the local currency with a flood of U.S. dollars. In Vietnam, however, local merchants began accepting MPCs, and a healthy black market blossomed. To stymie the black market activity, U.S. military authorities would conduct surprise currency exchanges, requiring soldiers to convert their existing MPCs into a new style of scrip. Black marketeers and others left with the old MPCs would suddenly find the currency worthless.
L.E.T.S (local exchange trading system)
A local exchange trading system (also local employment and trading system or local energy transfer system; abbreviated to LETS or LETSystem) is a locally initiated, democratically organised, not-for-profit community enterprise that provides a community information service and record transactions of members exchanging goods and services by using the currency of locally created LETS Credits.
Bristol Pound
The Bristol Pound (£B) is a form of local alternative currency launched in Bristol, UK on 19 September 2012. Its objective is to encourage people to spend their money with local Bristol businesses. As of September 2012 it is the largest alternative in the UK to the official sterling currency.
The Bristol Pound was created after over three years of development as a complementary booster for the local economy, and is used primarily between local businesses.
Printed notes are available for tender, being printed by an independent company. Efforts have been made to make the notes very difficult and expensive to forge.Liberty Dollars
The U.S. dollar went off the gold standard practically in 1933 and completely in 1971, but from 1998 to 2007 some Americans were using a precious metal-backed currency called the Liberty Dollar. It was the brainchild of Bernard von NotHaus, who for years made collectible coins in Hawaii. In 1998 he began producing the Liberty Dollar as an alternative currency, and by 2006, millions of dollars worth of Liberty Dollars were in circulation across the country. They included coins made from actual gold and silver and notes said to be backed by silver reserves.
The operation ran afoul of the U.S. government, and in 2011 von NotHaus was found guilty of minting and distributing his own currency.
Mountain money
BerkShares, an alternative currency used in the Berkshire region of western Massachusetts, was launched in September 2006 with the aim of promoting local businesses. More than 1 million BerkShares were circulated in the first nine months, and more than 400 area businesses accept the paper currency, which bears the likenesses of prominent figures from the region’s past, including Herman Melville, W.E.B. DuBois and Norman Rockwell.
The currency is available through five area banks, which have 13 branch offices that serve as exchanges. Customers can buy $100 in BerkShares for $95. Because local businesses accept the currency for purchases as if they were dollars, paying with BerkShares means getting an automatic 5% discount.
Ithaca Hours
The alternative currency in Ithaca, N.Y., provides a different twist on the idea that time is money. Ithaca Hours are paper bills worth $10 each, because when the currency was launched in 1991 by community organizer Paul Glover, $10 was the average hourly wage in Ithaca and surrounding Tompkins County.
Currently more than $100,000 worth of hours are in circulation, supporters say, and more than 900 businesses and individuals in town accept the scrip for goods and services. Bills are available in quarter-, half-, two- and four-hour denominations. Proponents say the main value of a local currency is that it stays in the community.
Virtual currency
Second Life is an online virtual world where you can see through walls, teleport yourself or even fly. Participants also do some of the same kinds of things people do in real life, including buy things, start businesses, travel or hear live music. As in the real world, these things cost money, and the virtual currency is Linden dollars. A virtual motorcycle for your avatar to zip around might set you back 900 Linden dollars, while an oak gazebo for your Second Life apartment is L$10. As with the currencies of the big multiplayer roleplaying games, you can earn your money within the virtual world, or you can just spend some real money to buy some. What’s different is that the purchase of Linden dollars is perfectly acceptable, and can even be done from within Second Life. A dollar will buy about L$250, although like other currencies the value of the Linden dollar fluctuates. You can track the exchange via Twitter.
Gift cards
Gift certificates and gift cards are considered a form of scrip, or alternative currency, and have become a major way consumers pay for goods and services. Sales of gift cards were projected to top $110 billion in 2012, according to CEB TowerGroup research, which predicted in mid-December that 85% of the U.S. population would exchange gift cards during the holiday season.
One of the problems of using gift cards as currency is that some of the money is never spent. That residual value – what the industry calls “spillage” – was about $1.7 billion in 2012, down from about $8 billion in 2007. Restrictions on expiration dates have helped, as has the emergence of gift card exchanges like Plastic Jungle.
Cryptographic Currencies
Bitcoin – billed as an open source, peer-to-peer digital currency – looks to some enthusiasts like the latest stage in the evolution of money, a journey that included the first coins in Greece or Persia in 700 to 650 B.C., the first paper money in China in the seventh century and the first credit cards in the U.S. in 1950. To skeptics, the volatility of the Bitcoin, which has fluctuated wildly in value, shows the danger of using a currency not issued or backed by any government.
The Bitcoin protocol allows for other cryptographic currencies to be developed, such as Feathercoin and Litecoin, as part of it’s algorythm it acts as self aligning system evolve an ideal currency system. The early adopter bonus automatically finances the development of the network. It is the proof of work of the Bitcoin protocol that prevents forgery of this form of currency.
Conclusion:
Money is worth what we believe it’s worth, and there have always been mediums of exchange beyond the government-minted variety.
Ref:
url=http://en.wikipedia.org/wiki/Alternative_currency
url=http://en.wikipedia.org/wiki/Bristol_Pound
url=http://money.msn.com/personal-finance/10-quirky-alternative-currencies
url=http://en.wikipedia.org/wiki/Local_exchange_trading_system
url=http://bristolpound.org/faqsList of alternative currencies
American Open Currency Standard (AOCS)
Barter clubs or corporate barter organizations.
BerkShares
Bitcoin and other similar cryptocurrencies
Bristol Pound
Brownie points
Calgary Dollars
Community Exchange System (CES) global exchange network
CyberCredit is a complimentary digital currency used in CCmoney banking system.
Detroit Community Scrip
Digital gold currency
Dinar Coins
Euronote
Eko at Findhorn Ecovillage
Fair4All. Developed in The Netherlands.
Favabank. UK Favour exchange, based on mutual credit.
Fourth Corner Exchange
Horse Money
Ithaca Hours, Ithaca, NY
Kelantanese dinar (gold) and dirham (silver) in Malaysia
Local Exchange Trading Systems (LETS), an example of mutual credit, used worldwide.
Liberty Dollar is a private currency backed by silver, alternative currency in the United States.
XRP in the Ripple monetary system
Stroud Pound
Time Dollar is a state-sponsored alternative currency in the U.S, to penalise welfare recipients.
Toronto Dollar is another example of a backed local currency.
Tumin: alternate currency used in the Espino, Mexico state of Veracruz.
Valun system proposed by E.C. Riegel
Ven is a digital currency used in Hub Culture, a private social network
WIR Bank - One of the oldest founded in Switzerland, 1934, 62,000 members. -
Made an interesting bit of reading, thanks for putting the time in to write it
UM
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It’s mostly references, I just put it together from background information about currency development, I’ve been reading.
I’m just researching penny shares and causes of market volatility now. It would also be interesting to see “A brief history of money”.
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Good writing :)
+1 :)
can you add the countries for the different currencies?
Could be interesting to know where those curencies are circulating -
[quote name=“Wellenreiter” post=“43437” timestamp=“1386854757”]
Good writing :)+1 :)
can you add the countries for the different currencies?
Could be interesting to know where those currencies are circulating
[/quote]Good idea, if anyone want to do that, I’ll update later. Rep, available, need rest.
