Typography

Dutch 10 guilder note. Holland and Lebanon are the only countries to have issued banknotes with bar codes. One of the interesting things that we've all learnt about Bitcoin is that it isn't actually anonymous, it's pseudo-anonymous . While anyone can deal in bitcoins without providing personal information like a phone number or photo ID, all bitcoin transactions are broadcast to the public. By analyzing these transaction patterns, it may be possible to flush a user's true identity out into the open. Bitcoin is an attempt to digitally replicate many of the features of the old fashioned banknote, but even banknotes are to some degree pseudo-anonymous. Each banknote has a unique serial number on it. By tracking serial numbers, it may be possible to connect a note to a noteholder and thereby destroy their anonymity. The process of unveiling note users occurs most often in kidnapping cases. When their young son was kidnapped in 1932, the Lindbergh family paid a $50,000 rans...

The shares of the Swiss National Bank (SNB), Switzerland's central bank, have almost doubled since July, despite there being no real news. Yep, you read that right, the SNB is listed on the stock market. There are four other central banks with listed shares: Belgium, Japan, Greece, and South Africa. I discussed this odd group back in 2013. Why are SNB shares catapulting higher? This is a staid central bank, after all, not a penny stock. Let's look at the fine print. Swiss National Bank shares aren't regular shares. To begin with, the dividend is capped at 6% of the company's share capital. The SNB was originally capitalized back in 1907 with 25 million Swiss francs, an amount that hasn't changed in 109 years. Which means that the dividend is, and always has been, limited in aggregate to a minuscule 1.5 million francs per year (about US$1.5 million). Because this amount must be divvied among the 100,000 shares, each share gets just 15 francs per year. The SNB has fa...

Satoshi Nakamoto kicked off his famous 2008 white pape r with the line: "Commerce on the Internet has come to rely almost exclusively on financial institutions serving as trusted third parties to process electronic payments. " He created Bitcoin, a form of decentralized cash, to deal with this problem. But as Meltem Demirors points out , Bitcoin adoption seems to have peaked. Eight years after Nakamoto published his paper, not many people are using the stuff as money. Here's a way to get more people using bitcoins as money on the internet: Commerce on the Internet has come to rely on a  Visa/MasterCard pricing standard . Although a few online stores like Dell , Expedia , and Microsoft accept bitcoin payments, they still set their prices in terms of Visa/MasterCard dollars. Because the dominance of this pricing standard is preventing innovative money like bitcoin from emerging, it needs to be hacked. The Visa/MasterCard standard Credit card issuers aren't mere interme...

Do citizens benefit by owning money that is pegged to the nation's own unit of account rather than a foreign unit of account? Let's start by imagining a money that is not pegged to the national unit of account. Say that U.S. banking giant Wells Fargo establishes branches all over Canada. Instead of issuing chequing accounts that are pegged to the Canadian dollar, it decides that it will steal business from Canadian banks by issuing U.S. dollar-pegged chequing accounts to Canadians. Wells Fargo execs reason that the U.S. dollar is at least as stable as Canadian dollars, if not more so, and this could give their product an edge. Further imagine that Wells Fargo is able to ensure that its U.S.-denominated money is just as liquid as that of competing Canadian money. Say that Canada's national ATM network is modified to dispense U.S. dollars to Wells Fargo cardholders. Retailers are convinced to accept U.S. dollar electronic payments, and so is Revenue Canada, the national tax a...