Jeffrey Tucker

I’ve just left the Liberty Forum in New Hampshire, a three-day gathering of hundreds of people who are trying to find ways of living freer lives in times of despotic control. Among many things, this might be the world center for exhibiting monies of the future.

I leave as the proud owner of three types of nonpaper, nongovernmental monies. They operate in competition with the government’s dollar. Yes, these include Bitcoin, the mind-blowing digital currency that has techno-geeks, edgy global traders, and even the World Bank buzzing about its potential to finally separate money from the state.

Why are people working on alternative forms of money? It’s all about escaping a 100-year-old trend. Back in the day, the dollar was a name for gold, not just a paper ticket manufactured by a government-chartered central bank.

Depression, war, and deliberate debasement have left us with a dollar that is a mere shadow of its former self. It keeps losing value, of course, rather than gaining value as it would in a free market.

Just as critically, the dollar today serves as the enabler of all regulatory control over our economic lives. Using the dollar means dragging a gigantic and burdensome machinery along with you. It means tens of thousands of regulatory controls, government spying, confiscatory taxation, and endless burdens that are bad for businesses and individuals.

Ideally, the dollar would be totally reformed, made good as gold, and restored to its former integrity. How likely is that to happen? The whole idea depends on the wisdom, good will, and public beneficence of the political and elite class of banking moguls.

Is there any wonder that there is a clamor for the private sector to come up with something new? It’s been going on for several decades now, this discovery process we might call “monetary entrepreneurship.”

People in ancient days had to discover the best commodities to get progress beyond mere barter. What would best serve as money: something to acquire not to consume, but to trade for other things to consume? Is it salt? Shells? Silver and gold? Many options are available, and only the best money can win the market competition over time.

Something like this is taking place again today. Government money is risky, carries too much cost, and has an uncertain future to it. People put up with it for convenience and because nothing better seems to present itself.

There is a real opportunity here for monetary entrepreneurs to get to work coming up with something new and letting the markets try it out. Over the last 10 years, governments have shot down a number of experiments in private money that used digital networks to monetize gold and silver. It’s been a brutal job to retain the government’s money monopoly.


Entrepreneurs have learned. New monetary instruments have to protect themselves against government attempts to shoot them down in obvious ways. There are three general ways to do this: back to the basics with precious metals, onward to the future with purely digital money, and some combination of both of these.

My first acquisition is an innovative way to save and spend smaller units of silver. The tiny bars are pretty and clearly mark their weight. Today, each one is worth about $1. In the future they could be worth much more. For daily spending needs for cabs, food, and water, these would work quite well.

It’s true that they are pretty small and might get lost in your pocket. You have to have some pretty nimble fingers to handle them in a hurry. And even young eyes might need reading glasses to discern the weight.


A solution to this problem comes from Shire Silver and entrepreneur Ron Helwig. It’s a simple, but ingenious idea, one he is very anxious to share with others. He takes various strands of gold and silver of many weights and laminates them in a credit-card size monetary instrument.

The result is convenient and easy to carry and spend. He is not the only maker of these cards. Many others are picking up the idea — a fact that makes Mr. Helwig very pleased (he is the last one to attempt to gain a government monopoly through a copyright, patent, or trademark).

Shire Silver cards are commonly accepted all over New Hampshire. But they are in use all over the world. Helwig gets orders from New Zealand, Brazil, and even Japan. Some orders are valued as low as $6, but he receives orders valued at $5,000 too. At the Liberty Forum, he couldn’t keep up with the demand, so he brought his machine to the booth. He even let me make a 1-gram card myself!

Jeffrey Tucker making a Shire Silver card with help from the company’s founder, Ron Helwig.

While I sat at the Shire Silver booth, people were also purchasing cards with Bitcoins. This is the first time I had seen Bitcoins in operation as real money. In fact, most things were available in Bitcoins. Here we have a currency created only in 2009, and already it is making possible global transactions every one or two seconds with someone somewhere in the world.

I downloaded a smartphone application called Blockchain that gave me a wallet of Bitcoins. I’ve been curious about this whole phenomenon, but there is nothing like owning the currency yourself to underscore the point.

I was able to sit and talk with some of the major players in this emergent industry and gain a clearer understanding of what it is and what it is about. As a result, I’m pretty confident that this is the real the thing and has a spectacular future.

I went over to the Bitcoin ATM machine and loaded up while I could. Of course, you can also buy them online (there are many options, but try bitstamp.net or buy them locally from localbitcoins.com), but in person, you can get digits for cash, which is especially nice. The trading relationships between Bitcoin and government currency are always in operation, so there is never a doubt about the value of your portfolio.

A year ago, there were more skeptics than there are today. And this is because the market is expanding. There are websites that accept only Bitcoins, such as Silk Road. I also met many people who are paid their normal salaries almost exclusively in Bitcoins. There are companies planning to go public in Bitcoins, which thereby means completely bypassing the SEC and the whole regulatory apparatus.

As you can see, we are really talking about the emergence of a countereconomy, a free-market universe that runs parallel to the dollar-based economy.

[Ed. Note: As Jeffrey said, these alternative currencies are still in their early stages. But considering how the Federal Reserve is treating our dollar, it’s only a matter of time before these ideas reach a broader audience and achieve the critical mass they need to become mainstream.

If you’re interested in learning more about alternative currencies in history, be sure to check out Good Money
by George Selgin. Selgin’s book is a lively tale about how monetary entrepreneurs took it upon themselves to solve the problems caused by the Royal Mint, which failed to meet the needs of a growing economy.

Click here to learn more about the book and instantly access an exclusive 20% discount, normally reserved for new members of the Laissez Faire Club.

This discount is just one of the benefits Club members enjoy. Members also have instant access to a growing library of e-books covering a wide variety of engaging topics, with a new book being added every other week. New members also receive Laissez Faire Books’ exclusive Economics in One Library, a complete (yet concise) collection of economic ideas that help define the economic reality we find ourselves in... and offer insights into how to protect what you have. To find out more about the Club and whether it’s right for you, click here. ]

Skeptics say: “But I can’t use any of these monetary instruments to pay rent, buy a car, or get groceries.” Well, that’s because these ideas are all ventures that take time to develop. Money is like any other good: It begins with speculation and goes through a period of gradual adoption until it is universal.

Phones were not universally useful until many people had them. It was the same with email. When I first saw an email address, I thought: That’s the silliest thing ever, because who will even write this guy? Eventually, the network grew and reached the critical mass and the government’s system of mail delivery took a massive hit for the first time ever.

Why wait for monetary reform to come from the top? If the market wants a better-quality money, one that frees markets and makes economic exchange more beneficial, markets will create it out of existing resources and realities. This can even happen when government objects. Government can only defy human desires for so long before people decide that the costs of compliance outweigh the benefits.

The government’s money monopoly is crucial to its control over society. What happens when that comes to an end? Imagine the future.

Sincerely,

Jeff Tucker

Jeffrey Tucker

I'm executive editor of Laissez Faire Books and the proprietor of the Laissez Faire Club. I'm the author of two books in the field of economics and one on early music. My main professional work between 1985 and 2011 was with the MIses Institute but I've also worked with the Acton Institute and Mackinac Institute, as well as written thousands of published articles. My personal twitter account @jeffreyatucker FB is @jeffrey.albert.tucker Plain old email is tucker@lfb.org

Recent Articles

How to Trade October Volatility

Greg Guenthner

When it comes to the stock market, October gets a bad rap. It's true, there have been some major crashes in October (ahem... Black Monday, Black Tuesday, etc.) but on a shorter timeline this month hasn't been nearly as bad as you might think. Today, Greg Guenthner offers an optimistic look at the month investors love to hate. Read on...


What the Reboot of the US Budget Means for Your Money

Byron King

Big government doesn't come cheap. And right now the U.S. government is one of the biggest in history. So far the budget writers have been able to move money around to keep the machine moving. But as Byron King points out, that will soon become much more difficult. Read on for the full story...


Invest Like a Shark in the “New” Stock Market

Wayne Mulligan

In the late '90s, financial TV personalities like Jim Cramer became mega stars - often drawing more ratings the ESPN. But that was over 15 years ago... That couldn't happen again, could it? Today, Wayne Mulligan details the new flock of personalities that are set to cash-in on a different kind of investment boom. Read on...


One Thing to Consider Before You Become a Whistleblower

Chris Campbell

Being a "whistleblower" is no easy task. Regardless of whom you're blowing the whistle on, there's bound to be a fair amount of risk involved... and that's especially true if you're going after the "powers that be." But there's more to it than that... And as Chris Campbell explains, none of it matters if you can't protect yourself. Read on...


The Number One Threat to the US Above Terrorism

Peter Coyne

As conflict with ISIS looms, the Pentagon appears to be in a pickle... They've got all kinds of things on their "wish list", and they're not likely to get all of them. But they may have found a loophole, and that could mean big bucks for a handful of investors who know where to look. Peter Coyne explains...


How to Spot a Market Top

Greg Guenthner

Last week was a rough one for most of the world's markets. Investors saw red almost everywhere they looked. And that's got a few media outlets ready to declare a top in stocks. Greg Guenthner explains why this line of thinking could be dangerous... and why, if you follow it, you could be doing your portfolio a disservice. Read on...