Saturday, December 20, 2014

Bitcoin Is Not Like Yap Stone Money

For centuries the people on the island of Yap in the South Pacific used a currency that was both useless and inconvenient, which was probably part of the reason that they didn't even care whether they actually received the currency when somebody paid them in it.

Put like this, Yap money sure sounds weird, yet some economists and bitcoin experts claim that there are deep similarities between this primitive money on the one hand and the most innovative and hi-tech money that we know of, bitcoin, on the other.

To understand why this need not in fact be an unreasonable claim we need to have a closer look at the key features of Yap money that I hinted at above. 

To understand why the claim nonetheless is probably inaccurate it is necessary to show that there is surprisingly little evidence to think that Yap money in fact functioned the way economists think it did.

Yap Stone Money