Funny Money Roundup

While IMTFI remains firmly focused on the intersection of novel and not-so-novel technologies and monetary practices (payments, value storage, and so on)—and, in particular, on the world of mobile money—we are also interested in money, finance, and the economy more generally. As a part of our new blog, we are initiating a recurring feature that will highlight, with a list of entirely noncomprehensive and thoroughly idiosyncratic links, interesting debates, developments, and other tidbits about money from around the Internet. The goal is simply to draw some attention to the diverse worlds of money, its meanings and uses. We’re calling it the Funny Money Roundup. If you have come across something interesting that you think we might like, send it to IMTFI research assistant Taylor Nelms at tnelms@uci.edu. For our inaugural link list, we've got a set of stories about bitcoin, everyone's favorite crypto-currency. Enjoy!

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Remember bitcoin? Yeah, us too. Some seem to think that the bubble has burst,and, indeed, the value of a bitcoin has dropped over the past several months to under US$2 from a high of over US$30. But the bitcoin phenomenon offers a fascinating window onto debates about the value of money, the role of government, as well as complementary, alternative, and crypto-currencies. Here’s a few links from our archive (remember, this is wholly noncomprehensive):

• The original paper by the elusive creator of bitcoin, Satoshi Nakamoto, outlining the technical parameters of the crypto-currency.
• Several overviews and critiques of the crypto-currency emerged over the first six months of 2011, including this well-circulated piece (calling bitcoin “potentially revolutionary”); two responses by Timothy Blee; this fascinating post by Adam Rothstein at Rhizome; and podcasts with Gavin Andersen (a technical lead of the bitcoin ) at the Mercatus Center at George Mason University and Russ Roberts’ EconTalk hosted by the Library of Economics and Liberty. The bitcoin story really tookoff after a sensationalist piece was published on Gawker suggesting thatbitcoin’s true purpose was to facilitate trade in illegal goods. Some labeled bitcoin a “libertarian dream.”
• A useful essay in The Economist and short pieces in The Atlantic and The Daily Beast marked the arrival of bitcoin hysteria.
• From one of our favorite online resources, the folks from NPR’s Planet Money team try to buy bitcoins. Later, they report on a story by Joshua Davis in the New Yorker (subscription required), in which Davis tries to track down Nakamoto.
• One of the questions the bitcoin phenomenon prompts is about how money—any money, not simply digital currencies—gains currency among its users. Derek Thompson at the Atlantic asks about “How to Start Your Own Private Currency” and suggests that it all boils down to trust.
• Another question has to do with how value enters the system. Bitcoin users gravitated towards Dwolla, a PayPal alternative, as a way to deposit and withdraw fundsfrom bitcoin exchange websites like Mt. Goxor Tradehill. In two measured articles, Dwolla founder and CEO Ben Milne answered questions about bitcoin, hype, online payments and Dwolla’s role in thephenomenon.
• But then in June someone stole a bunch of bitcoins worth about $500,000 at the time, the value of the currency plummeted, and articles appeared questioning bitcoin’s viability or simply declaring the bitcoin experiment over, even as bitcoin supporters rallied.
• Recent takes include those by Paul Krugman and James Surowieki, both interesting as moderately mainstream responses.

At IMTFI, we are as interested in the material, visual, and monetary cultures that have grown up around bitcoin as we are in its possibilities as analternative or complementary digital currency.

• The bitcoin forum washacked earlier this month and transformed into an advertisement for “Cosbycoins,” including links to a website (cosbycoin.com, which no longer seems to be working) and this picture:

• A variety of bitcoinmerchandise emerged in the wake of all the discussion, mainly for purchase withbitcoins: a whole bunch of t-shirts, “nerd merit badges,” mugs, bumper stickers, custom license plates, and so on.
• And, amazingly, here you can buy ฿1(brass) and ฿25 (gold-plated)coins:

Once upon a time, Bitcoins were completely virtual and youcouldn't hold or touch them. Not anymore. Each Casascius Bitcoin is a collectible coin backed by real Bitcoins embedded inside. They come intwo denominations: 1 bitcoin, and 25 bitcoins. Each piece has its own Bitcoin address and a redeemable "private key" on the inside, underneath the hologram.

Finally, be sure to also check out IMTFI Director Bill Maurer’s short essay on “Money Nutters” in the European Economic Sociology Newsletter, as well as this blogpost, which argues, referencing a recent interview with Professor Maurer, that bitcoin relies on public and government-supported infrastructures to a much greater degree, perhaps, than most realize.