Alternative currencies, specifically cryptocurrencies, have been in the news again – only this time it’s been reported that there might be a “crypto winter” as many of these digital currencies lose value. Bitcoin is still the most prominent of these cryptocurrencies with several more that have now entered into the market. These digital currencies are the latest form of an alternative currency which groups of people have used for years. As a quick review, an alternative currency is any type of currency that is accepted between the individuals or groups that are using it. Unlike a national currency that is controlled by a country, alternative currencies work outside a country’s regulations with their own set of rules.
Alternative currencies can range from the ultramodern cryptocurrencies to a very low-tech type of currency called Berk Shares. Berk Shares are used in the Berkshires region of Massachusetts and consist of paper and coin denominations issued at the local banks – all to support local businesses. This encourages the concept of “shopping locally” and those who use the currency know it is only accepted by this specific group.
A complementary currency is similar to an alternative currency as it is not legal tender and used only by those individuals within a closed group who also agree to its value. Complementary currencies are meant to work with a national currency to provide additional value. Frequent flier miles can be described as a complementary currency but are limited to travel with a specific airline and its travel partners.
From an historical perspective, barter is perhaps the “oldest” alternative currency since it most likely existed before currency was even created! Managed correctly, barter can provide exceptional benefits for business owners and individuals by helping them control and save their cash money by using an alternative currency. Like gold (or a government) supports their local currency, the users of a barter system back each other’s products and services thereby providing value. That’s why a barter network is only as good as the people and companies that participate in it. If you’re interested in learning more about barter, check out our website and this short video.