national currency

Across The World, People Are Adopting Alternatives To Their National Currency

Economic insecurity and technological advances are driving people from across the world to look at alternatives to their national currency.

A national currency is a means of exchange in a specific economic zone; one unit that’s paid out for, say, an hour of labor, is exchangeable for something that is determined to be of equal value.

For instance, an hour of minimum wage in New York state is $15 in 2016, about the same as 4 Big Macs.

The following alternative currencies, however, can be “made,” i.e. not just bought with existing currency, but created through some human activity.

national currency

Cryptocurrency Alternate to National Currency

Currently the rising star of the alternative currency world, Bitcoin is an all-digital, anonymous form of payment that can buy a variety of items online and offline. It can also be exchanged for traditional currency.

It’s made through “mining,” which actually refers to the peer-to-peer network that validates each interaction. For each transaction that’s validated, which happens when computers connected to the network crack a sophisticated math problem, the owner of the computer is rewarded in brand new Bitcoins.

To learn more about how Bitcoins work, check out our in-depth article on the topic. For updated information about the legal status of cryptocurrency in various countries, check this Wikipedia page.

Other cryptocurrencies, which work in very similar ways, include Dogecoin, Anoncoins, Litecoins, Feathercoins, and others.

national currency

Hyper-Local Alternative Currencies

In the Greek port city of Volos, people were struggling to pay for all their necessities in euros – so locals set up a different system: Local Alternative Units, or TEMs after the Greek acronym.

Using the system, local can trade any goods or services they have to offer for the currency, with one TEM being the equivalent of one euro. More than 1,300 people were signed up as of January 2013, the BBC reported.[contextly_auto_sidebar id=”pMSZyzVyTq5xu9aq57PQxy8FtMpc0iIB”]

This system encourages people to spend the money within their local community, encouraging economic activity that benefits your neighbors instead of large conglomerates.

It’s not the first time such a system has been used to circumvent a national currency, however. The Banco del Tiempo, or Time Bank of Barcelona, has allowed citizens to exchange goods and services using a credit system since 1998, and there are hundreds other like it across Spain.

And whereas the Greek TEMs are all recorded online, alternative systems using physically printed cash include Ithaca Hours in upstate New York, Equal Dollars in Philadelphia and BerkShares in Western Massachusetts.

Wikipedia has even more examples of such local exchange trading systems all over the globe.

Virtual Currencies

In the virtual reality game Second Life, there is a variety of ways in which you can earn the game’s Linden Dollars. While they’re ostensibly used to buy items and services within the game, you can easily exchange them for actual currencies, essentially making new money.

The same can be said of many other games that use an in-game currency, such as World of Warcraft, Diablo III, and EVE Online, although it’s frowned upon or in EVE’s case actively fought against by the game companies.

There’s also the VEN, which works on the same principle as the local currencies but can be used globally.

Unlike local currencies, which only derive their value from the trust the community puts in them, the value of the Ven is determined by a portfolio of products on the financial market, in order to make it viable across different national currencies and inflation rates.

Updated. Cover photo images of Dogecoin, Litecoin, Feathercoin, the Ven, Ithaca Hours, Berkshares, and TEMs courtesy of respective websites, Bitcoin logo via Wikimedia.

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Ole Skaar