Fiat money only has value because governments have established its value by decree. And the value of currencies can be reset — such as Brazil’s cruzeiro currency when it was replaced by the Unit of Real Value (URV). Here are just a few quick links on other somewhat “temporary” currencies.
- Long ago, the island of Yap created huge, heavy, carved pieces of limestone as a form of currency. Since moving the stones is pretty difficult, these “coins” are transferred abstractly by just changing who owns the stone. [url]
- Bitcoin is a digital currency based on a cryptographic scheme — preventing fraudulent transactions and allowing for reliable transfers without central banking entities. Interestingly, Bitcoin (briefly) achieved parity with the US dollar earlier this year, but it hasn’t sustained that value. [url]
- The virtual economy of Second Life is based on another digital currency, the Linden dollar. However, the Linden dollar is governed by Terms of Service that explicitly state that the Linden is not real currency or any type of financial instrument. [url]
- To discover more interesting stuff on economics, check out what’s currently floating around the StumbleUpon universe. [url]
By the way, StumbleUpon can recommend some good Techdirt articles, too.