An Alternative System

None of these systems has become a standard method of buying and selling to replace the existing monetary system. Yet many are finding larger and larger audiences as the crisis that began in 2008 deepens and evolves, allowing more people to do more business outside the "normal" economy.

Heather Schlegel, an organizational futurist for SWIFT, the group that coordinates international transaction standards on behalf of the world's top banks in the world, believes that all of this innovation at the level of local communities is completely logical, and will likely increase in the years to come.

"Obviously, in the wake of 2008, there are flaws to the international monetary system which must be corrected by innovation," Schlegel explained to me. "You have this flawed dichotomy that either the whole system is working great, or the whole system collapses suddenly. In reality, complex systems evolve over time, and new players and behaviors emerge. That's what we're seeing all over the place now."

One facet of the global economic system especially prone to disruption, according to Schlegel, is the somewhat monochromatic set of values we imbue in our currency. "All money transmits the values of the people using it, along with considerable amounts of ancillary information. The U.S. dollar, the yen, and the euro all are 'values' currencies. It's just that the values are primarily in globalization, shallow relationships, high velocity, and free markets. That has a lot of benefits to it, as we saw during the explosive economic growth of the 20th century. It's just that such a currency has a lot of drawbacks, and those are being addressed by these innovations."

Consumers, she suspects, are looking for a way to express more control over their local economies, rather than having the one massive, global economy expressing control over them. "People want fast, free, secure transactions, and the dollar and euro are great at that," she conceded. "But what about supporting local communities or encouraging certain types of agriculture? You need innovation if you want those. That is why we are seeing so many examples of people trying new methods of payment."

Thanks largely to information technology, these systems of payment can be decentralized and democratic rather than tied to big, central institutions. Some innovations are truly spontaneous, based around the needs of communities more than policy makers or investors. Said Schlegel, "The one thing you see with BitCoin or local currencies is that people rarely ask permission from the central organizations. They just start behaving in new ways, and they do so by expressing their values through money."

These micro-currencies aren't meant to knock down the globalized economy, but rather to exist along side it. "This isn't going to be about BitCoin taking the place of dollars or something, or even becoming the standard for digital currencies. As communities begin to realize the possibility of expressing themselves through money, I expect you'll see hundreds of BitCoins, or something similar -- or something we haven't even thought of yet," she said. But unless the world's big economies turn some corner and suddenly becomes quite stable, more of these smaller systems are likely to continue appearing, to meet the needs of communities.

With all this innovation going on, one big question remains: what does this mean for paying the tax man, who wants a single currency to represent all of the activity so he can measure it and take his bite? The national revenue services of the world may need to start innovating themselves if they want to come up with the answer.

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