' A'History'of'Alternative'Currencies' ! ' Garrick'Hileman' ! ! ! ! Abstract:'Alternative'currencies,'which'are'defined'as'any'nonElegal'tender'medium'of' exchange,'have'been'a'regular'feature'of'the'economic'landscape'over'the'last'halfE millennia.'A'survey'of'this'history'finds'that'alternative'currencies'often'arise'out'of'similar' socioEeconomic'circumstances'and'then'cease'to'circulate'within'a'relatively'short'time' after'their'introduction.'This'pattern'of'decline'is'explained'largely'by'three' forces:'regulation,'technological'innovation,'and'–'most'commonly'–'insufficient'demand' due'to'factors'such'as'transaction'inefficiencies,'low'institutional'support,'and'diminished' social'motivation.'PresentEday'alternative'currencies,'such'as'bitcoin'and'the'Brixton' pound,'show'both'similarities'and'differences'with'past'alternative'currencies.'Bitcoin'in' particular'possesses'several'radical'new'characteristics,'including'a'relatively'decentralized' structure,'efficient'transactions'across'borders,'global'awareness,'and'support'from' powerful'institutions.' ' ' JEL:'E40,'E42,'E49,'E50,'E51,'E58,'E59' ' Keywords:'money,'currencies,'alternative'currencies,'community'currencies,'parallel'currencies,' bitcoin,'Brixton'pound,'black'market' ' ' ' ' ' ' ' ' ' ' Garrick'Hileman'(
[email protected])' London'School'of'Economics' Economic'History'Department' Houghton'Street' London'WC2A'2AE' England' ' © Garrick'Hileman'2013' Last'updated:'29'October'2014' I. Introduction! ' In'an'influential'1974'paper'economist'Benjamin'Klein'stated'“few'areas'of'economic'