Business

What makes money, money?

Cyptocurrencies fulfil and exceed almost all characteristics of money. Except adoption, that is.

24 July 2019

There are four tiny contiguous islands way out in the western Pacific Ocean, which are known as Yap, or Wa’ab. All four are less than 100km², and one of the reasons this tiny place is famous is because of its stone money. These are carved stone disks, and can be as small as a couple of centimetres, or as large as four metres. Its value is based on the stone’s size and history. The stones have value on Yap because they’re scarce, and had to be quarried or found elsewhere, and then transported back, lashed to canoes. The money supply is also fixed, because there are no more stones being imported. What’s more, so the story goes, when ownership is transferred, the stones aren’t moved, even if, as has said to have happened, a canoe overturns and the stone is now resting safely at the bottom of the ocean.

It’s this last point – the fact that everyone is aware of the ownership even though the stone is nowhere in sight – that is often used as an early example of a distributed ledger.

ITWeb Premium

Get 3 months of unlimited access
No credit card. No obligation.

Already a subscriber Log in