Alternative Currencies: A Historical Survey and Taxonomy

Abstract

Alternative currencies have appeared regularly for at least the last half-millennia, often arising out of similar socio-economic circumstances and ceasing to circulate within a relatively short time period. While regulatory shifts and technology shocks account for some of the challenges alternative currencies have faced in gaining wider adoption, the most common observed explanation for why alternative currencies decline is insufficient demand due to relatively high transaction costs, low institutional support, inconsistent social motivation, and other factors. Present-day alternative currencies, such as the Brixton pound, are similar to past alternative currencies, while bitcoin features several radical differences.

Keywords: money, currency, currencies, black market currencies, national currencies, parallel currencies, alternative currencies, community currencies, crypto-currencies, digital currencies, virtual currencies, Brixton pound, bitcoin, blockchain

JEL Classification: E40, E42, E49, E50, E51, E58, E59