So I turn to the monetary system a la mode: BitCoins. One of the attractions of this cryptocurrency is that as a peer-to-peer system it lacks any central planning, government or otherwise, so I won’t have to worry about a Cypriot-style lockdown on my savings.
Setting up a BitCoin wallet is the easy part. Filling it proves to be much more difficult. If I was a patient man, I could leave my computer to “mine” for BitCoins, using its processing power to slog away at the coalface of the BitCoin economy, crunching blocks of encrypted data in exchange for virtual coins like the world’s most tedious version of Super Mario Bros. But the returns are miniscule, and unless I commandeer a supercomputer or a global botnet to do the legwork, I’d be better off mining loose change from the backs of old sofas. Instead I pay a visit to BitCoin Central, one of the most popular BitCoin trading services. It’s partnered with a French bank, Credit Mutuel Arkea, which provides a way to port my real world currency into a cryptic one. But after I agree to the eye-watering £17 transaction fee my bank demands for transferring a few bits of data across the English Channel, an unexplained error in the online form repeatedly blocks my progress. It’s Saturday afternoon and sunny outside, so I give up for the weekend, resolving to visit my bank in person first thing on Monday morning.
When I explain my plan to Birch, the Tomorrow’s Transactions blogger, he’s more sanguine about the idea of converting life savings into BitCoins to escape Europe’s struggling economy. “BitCoin holds no respite from risks of currency,” he warns. “And what’s more, BitCoin Central is not a bank. Part of being a bank is to take deposits and make loans, but there is no lending and borrowing with BitCoin Central.” This hits at the heart of the problem with community currencies. Aside from their restricted use, you can’t squeeze much growth out of your savings. Keeping your money as BitCoins is like stuffing cash under the mattress: it’s interest free. Birch’s message is clear. Not only is cashing in my savings as BitCoins a dangerous plan, it’s a dumb one.
I don’t have long to wait before his warnings pan out. On Monday morning, I fire up my laptop for a final stab at getting hold of some BitCoins, only to discover my virtual bank has suffered a very real robbery. Hundreds of BitCoins have been stolen, and all transactions are suspended. It turns out that electronic vaults are just as fallible as real ones.
That seemed an appropriate point to end my experiment. I have little doubt the future will bring a diversification in what we think of as money, in its official and unofficial forms, as well as a diversification in how we spend it, and in how it’s stolen. But I won’t be giving up my cash card any time soon.