Virtual money

In late 2013 a modern-day treasure hunt took place at a landfill in Newport in the United Kingdom. The only difference from this and many earlier quests for lost treasure was that the scavengers did not hope to find ducats of solid gold or jewel-encrusted ornaments from long lost exotic places. What they were looking for was a regular Dell hard drive filled with $7.5 million worth of bitcoin, a digital currency introduced in 2009. The hard drive had previously been owned by James Howell, an IT professional who had mined (bitcoin currency is created from solving mathematical algorithms on the internet, a process known as ‘mining’) 7,500 bitcoins in a week sometime in 2009. At that time bitcoin was an exotic and relatively unknown idea of little value. But with the skyrocketing price of bitcoin, which hit $1,000 per unit in November 2013 and the opening of the world’s first bitcoin ATM in Vancouver, Canada, James Howell’s hard drive became a million-dollar treasure. The only problem was that he had forgotten about his virtual money and thrown the hard disk away during a clean-up. Now Newport landfill is home to a large binary treasure which is probably lost for ever or just waiting for a lucky scavenger to come along. The prevalent perception about money today is as a practical and neutral means of circulation which allows other things (sale/purchase) to function. Money is a means of exchange, it is storage of value (unless inflation is too high), and it establishes a principle of equivalence (by which the value of different things can be compared). This purely utilitarian definition of money dominates in both the population and among scholars (Mankiw 2000, ch. 7). This perception is in no small part upheld and furthered by the historical abstraction of money where the evolution of exchange objects has gone from everyday material objects, to coins, to credit notes, and now to digits on a screen or information stored on a card. Money now seems to have conclusively separated itself from its embedding in specific historical and national cultures and its grounding in material production. The rise of a global finance market and the digitalization of money seem to have ‘liberated’ money from its non-monetary connotations. Zeroes and ones seem appropriate expressions of a global capitalism which in its financing, production, distribution, and consumption disembeds itself from the national or local context and becomes as spaceless as the financial markets become timeless. An OECD report, The Future of Money (OECD 2002), describes the history of money as a destined journey towards ever wider separation from a physical expression and a material grounding. The long history of money culminates in the post-history of virtual money. The ‘liberation’ of money seems to come with the added perception that money is now pure rationality. As a City of London analyst, Terry Smith, once said, ‘Cash is fact. Everything else is opinion’ (in Elliot and Atkinson 1998, 57). Though this utilitarian perception is not entirely unchallenged, it is hegemonic. And it is being formulated by various public actors and played out as reality by us as consumers and citizens. This thematic section of Distinktion challenges