BOB GARFIELD: This is On The Media, I'm Bob Garfield. Here's one thing about that epic story called money. It has a cast of millions. Banks, credit card companies, marketers, taxing authorities, police, even private eyes.
VOICE: We uncover the data you need. The truth without wasting time and money guessing what people are up to. Contact us today. Know the truth tomorrow [END CLIP].
BOB GARFIELD: As we've just seen the economy is the ultimate exercise in collaboration--collaborators you don't necessarily choose, such as Mother Nature, Enron traders and governments can impoverish you with the stroke of a pen.
MALE CORRESPONDENT: The Zimbabwe dollar is virtually worthless because inflation has skyrocketed.
MALE CORRESPONDENT: The hyperinflation in Venezuela this year is likely to run into a staggering thirteen thousand percent.
MALE CORRESPONDENT:The peso has devaluated 100 percent in the past year and that has had huge consequences in the poor neighborhoods Bueno Aires. [END CLIP]
BOB GARFIELD: And then there are the rest of us. All of us at constant peril of being drawn reluctantly into the story. We are promised privacy and many aspects of our lives. But in our financial transactions, as in an anxiety dream, we can find ourselves standing naked before the crowd.
MALE CORRESPONDENT: The US state of Massachusetts is suing Equifax. A recent cyber-attack and the credit reporting agencies exposed the personal information of 143 million people that's about half—
BOB GARFIELD: If only there were a currency that was private, secure, stable, convenient and not subject to the political or predatory manipulation of outsiders.
FEMALE CORRESPONDENT: Bitcoin, a virtual currency that doesn't abide by rules of a bank or government.
FEMALE CORRESPONDENT: It's digital and it's filled with controversy. Some businesses are using it and beginning to do so aggressively. Some see it as—
BOB GARFIELD: Bitcoin is the first of now a multitude of so-called cryptocurrencies, built not on gold reserves or limestone edifices but on software code. The infrastructure is called the blockchain, a digital version of an old fashioned ledger book. Just as those listed entry upon entry sequentially numbered in indelible ink, the blockchain is an untraceable ledger of every private transaction. But, instead of being held by some governing central authority, it is distributed peer to peer on countless computers across the world. So people know bitcoin as a digital currency but it's really more like a digital Yapese stone representing the community's collective memory. And in another throwback, the currency, in Bitcoins, case consists of a finite number of virtual tokens digitally mined by e-prospector's. Thousands of computers churning in such places as Iceland and China solving puzzles for which successful miners are rewarded with small purses of digital coins.
VINAY GUPTA: Every ten minutes they give somebody 25 Bitcoin.
BOB GARFIELD: Cryptocurrency pioneer Vinay Gupta is the CEO of Mattereum.
VINAY GUPTA: So there's a job to be done, taking all the transactions have been done in the last 10 minutes and making sure that they don't contradict each other and then publish in a block which contains all those transactions to the entire world so everybody can agree what the current bank balances are in the bitcoin system. But the job is so profitable that there's very strong competition to get that job and the one who has the fastest computer in that 10-minute block gets the 25 Bitcoin on the job.
BOB GARFIELD: Over time, 21 million bitcoins will be mined and no more. New York Times financial reporter Nathaniel Popper, author of Digital Gold: Bitcoin And The Inside Story Of The Misfits And Millionaires Trying To Reinvent Money, says it's part of a utopian vision to protect the value of the money from incompetent corrupt or simply desperate governments.
NATHANIEL POPPER: This idea really harked back to the idea of the gold standard which took a lot of power away from governments to issue as much currency as they wanted. Bitcoin provided this alternative of an asset that you could hold digitally without having to have it under your mattress and that at least seemed to hold the promise that it would keep its value better than the peso or whatever local currency it was that was dwindling away.
BOB GARFIELD: It's an ingenious way to limit the money supply but only one approach to digital money. At the moment there are well over 2000 crypto currencies from number two, Ethereum to Golem, Zipper and, hello Tinkerbelle, Pixie coin. Each representing a different user need or economic ideology. Bitcoin constitutes about half the world's crypto value but there are more than 80 billion dollars’ worth of rival denominations. Fifteen of which are worth at least a billion dollars. Neha Nerula:
NEHA NERULA: So holders of bitcoin often feel like they're buying into this vision of a money that isn't controlled by government that can't be inflated away, where no one can stop me from making payments and no one can take your wealth away from you. There's a cryptocurrency for pretty much any field or topic you could think of. There's Dentacoin, a cryptocurrency for dentists there's Jesus coin. There's an art project that came from someone who is a former student at MIT Tetzel coin which is about sort of claiming your sins. You purchased this currency in order to absolve yourself of your sins. Basically we're seeing all these different ways for people to buy into a future that they believe in. By becoming a holder of this coin.
VINAY GUPTA: Every one of these currencies is differentiated by its philosophy of money.
BOB GARFIELD: Mattereum's Vinay Gupta who previously coordinated the launch of a Etereum.
VINAY GUPTA: They take the philosophy of money the implement it as code and then they ship it to the world. And if people like it they buy it and if they don't they ignore it.
BOB GARFIELD: So which belief system choice is correct? I don't know. Which religion is correct? Yes, the technology is mind boggling across the board but once again like Mesopotamian temples or Tinkerbelle.
[MUSIC UP & UNDER].
BOB GARFIELD: It comes down to faith or even schisms like the one that split the Catholic and Orthodox churches. In the world of Bitcoin they're called forks. Like when one part of the community chose to follow a new set of protocols called Bitcoin cash and another stayed put. Likewise, there is Ethereum and a Ethereum classic. Bitcoin evangelist Andreas Antonopoulos.
ANDREAS ANTONOPOULOS: Which fork to follow? Which is the chain that matters? Which one will keep its value? No one can tell you that. Because the only Bitcoin that matters is the one that you choose to validate. There is no objective truth. There is only empirical, subjective truth.
BOB GARFIELD: With apologies to Rene Magritte, put that in your this is not a pipe and smoke it. With all the sects, all the denominations, all the expressions of faith have in common is the desire for something utopian. An efficient monetary system free of interference, middlemen and fraud. Which forces us to look at the dystopian other side of the Bitcoin. For one thing these currencies conceived for stability happen to be extremely volatile.
MALE CORRESPONDENT: Bitcoin plunges on world markets down more than 20 percent on Friday.
FEMALE CORRESPONDENT: Tumbling below ten thousand dollars.
FEMALE CORRESPONDENT:Falling below nine thousand dollars for the first time since November.
MALE CORRESPONDENT: Falling below 7000.
FEMALE CORRESPONDENT: Bitcoin is the officially been in a correction for a hundred and ninety days. [END CLIP]
BOB GARFIELD: Bitcoin peaked at nearly twenty thousand dollars per coin last December. It said about $6,400 now. Ethereum has tumbled from a January high of about $1,400 to $220. There is also the question of liquidity and frictionless e-commerce. A decade into crypto history, the process of purchasing and converting digital currency remains cumbersome. Too many steps, too few exchanges, too many delays. And for a currency that's created in part to stymie powerful intermediaries, too much trust to be placed in too many faceless actors. Then there is criminality. While digital currency is attractive to libertarians and anarchists and victims of hyperinflation, so far it has been most useful for the denizens of the dark web, where drugs and other contraband are peddled.
FEMALE CORRESPONDENT: The man known as the Dread Pirate Roberts was sentenced to life in prison for running a 214-million-dollar online drug bazaar called Silk Road.
FEMALE CORRESPONDENT: Silkroad was a black market website that allowed users to buy everything from cocaine to guns all by anonymously using bitcoins. [END CLIP]
BOB GARFIELD: Finally there is that nagging question of state power. If nations lose the control of tracking and printing and of course taxing money, what's the glue holding them together? Anthem's? Tourist attractions? Olympic teams? Vinay Gupta says the earliest crypto proponents the so-called cypherpunks thought governments time had passed.
VINAY GUPTA: And that's not inherently a crazy idea. I mean the nation state as an institution is only a few hundred years old, goes back to the Treaty of Westphalia. Before that, we had this kind of feudal kingdom stuff and before that we had city states and you know the systems that we use to run the world keep changing dependent on the available technology.
BOB GARFIELD: Once again economics professor Mark Blyth.
MARK BLYTH:Number one, states are never going to give up voluntarily the best monopoly they ever discovered which is the issuance of currency. Secondly, at the end of the day if you have lots of different private monies to choose from and use, that depends upon the other people's willingness to accept and use them. So why does everybody except and use the dollar because it's the largest economy, it's the biggest pile of cash in the world, it's the currency every wants to hold. Let's say that we do Mark coins, right? I'm going to issue Mark coins next week. How many people are going to want to hold Mark coins? How am I going to do this intergenerational? Am I going to live for 150 years? How they're going to redeem the promises?
BOB GARFIELD:But why rule out the possibility that a vast Bitcoin community or some other coin community, could endure, like any other generation to generation. Blyth's had an answer for that too.
MARK BLYTH: Let's think about the whole crypto thing. So I've spent a lot of time thinking about this, reading about this and taking it very seriously. And I've come to the following conclusion. If you have to explain it someone is money, it's not money.
BOB GARFIELD: That there is a good line but Vinay Gupta has a comeback too which is the inherent limitation of trying to explain a new thing in the terms of the thing it replaces. Cryptocurrency is like currency Gupta says about in the way a car is like a horseless carriage.
VINAY GUPTA: It has functions which are like money but it isn't really money. It's something beyond money. It's more complex, more nuanced or daft. It's more historical. So we're in this position where we're sort of confronted by something new and we just find an old name and we apply it. Another good example of where this happened recently was the mobile phone. I'm old enough to remember when a phone was an electro-mechanical device plugged into the wall and you know a few times a day it would make a loud ringing noise when an electrical signal came from the exchange and bang the striker on the bell. So we seamlessly went from the phone as this dumb device was plugged into a wall to these very, very flexible and powerful pocket computers that we call mobile phones. It's not phone. It's a pocket computer that happens to have an application on it that makes a phone call. Even the money isn't money. It keeps changing definition every few generations it does something that has different problems from the previous problems. And we just call it the same stuff and we pretend it works the same way even though it really doesn't.
BOB GARFIELD: This is the nature I suppose of an endless perplex. So, who's supposed to make sense of all of this. To define it. To mediate it.
NATHANIEL POPPER: Different people have managed to convince themselves that this thing is going to be worth something. That really is just an entry on a digital ledger somewhere.
BOB GARFIELD: Journalist Nathaniel Popper.
NATHANIEL POPPER: And yet, all of these people have come up with these different stories for why it should be worth something. When you meet people in China who are into this, you hear a different story than you hear from people in Argentina or from people in Finland or from people in the United States. You know bitcoin relies on storytelling around and on the media because the media is the way these stories are propagated.
BOB GARFIELD: The media. Because as we said from the outset, money is a story we tell ourselves and stories are our racket. You can disintermediate the Federal Reserve but for the time being you cannot disintermediate the media. Once again Neha Nerula.
NEHA NERULA: As I've been sort of studying and learning about money and, and bitcoin and working in this field, I'm more and more convinced that it's almost entirely about perception. It's about the story.
BOB GARFIELD:Think about J.S.G. Boggs. He was an obscure conceptual artist until coverage of his British trial gave him notoriety worldwide. Suddenly an original Bogg's was a global asset. The old adage is 'follow the money.' The corollary is 'follow the story.' Which is exactly what renowned photographer and conceptual artist Kevin Abosch did. In 2015, a collector bought one of his portraits for a very large sum of money inadvertently capturing the world's attention.
MALE CORRESPONDENT:Abosch revealed this month that he sold a simple portrait of an organic Irish potato to a European businessman last year. The man reportedly paid one million euros for potato number 345. The equivalent of one million eighty thousand American dollars.
BOB GARFIELD: A potato. The global incredulity was for him both fun and vaguely unsettling. Kevin Abosch.
KEVIN ABOSCH: You would hope that people concentrate on the artistic merit of the work that you produce.
BOB GARFIELD: But if the world was going to value him like a commodity, he wasn't going to be a mere spectator.
KEVIN ABOSCH: I thought well I'm going to be treated like a coin. I want to be the one who mints the coins.
BOB GARFIELD: Using the very blockchain technology that undergirds cryptocurrency, Abosch e-minted ten million tokens. He called them 'I am a coins', each divisible to 18 decimal places. You can buy a token or one infinitesimal fraction of it and be in the possession of an original Abosch. But more or less in the same way gold undergirded world currencies and computer mined algorithms underlie bitcoin, Abosch connected 'I am a coin' to a physical asset. One hundred prints up his blockchain address stamped on paper in his own blood.
KEVIN ABOSCH: So now I had this connection between the physical artwork, the blood prints if you will, and the virtual artwork. My virtual artwork and a crypto token like ether are identical. But that's like that Margritte Ceci N'est Pas Une Pipe, it's like looking at a pipe but it's saying it's not a pipe.
BOB GARFIELD: It's funny you should mention that I've, I've discussed that earlier in this episode with respect to may be the progenitor of your art project and that Boggs who was exploring some of the same issues. Are you, to phrase a coin, a crypto Boggs.
KEVIN ABOSCH: I'd actually forgotten about him. I'm surprised it hasn't actually come up in the last few months but for sure he addressed a lot of the same issues around value.
BOB GARFIELD: As previously noted philosophers and economists, not to mention educational filmmakers, have been puzzling over these questions for millennia. So what kind of couple of artists add to the discussion.
KEVIN ABOSCH: The crypto Ziet Geist and the cryptocurrency phenomenon across the globe, has people questioning value in a way that I think they haven't before. And I think it shouldn't be surprising that an artist could illuminate this in a way that greases the path for a discussion that pretty much anybody can get involved in. You ask about what is money. And I actually do have an answer. Money for me is energy. It's potential energy. and then I'd question perhaps is that energy just an extension of us. So are we actually separate from that which we call money.
BOB GARFIELD: Not you are what you eat but you are what you fetch?
KEVIN ABOSCH: I'm looking at matters of identity, existence, value, human currency. Starts with identity. Where do I end? Where do you or the object in front of me begin? Or vice versa. Are we one or are we separate existence. Am I? Are you? What are we? Value, how do we ascribe value to anything and everything, especially human life. Or the moments the seemingly fleeting banal moments that together become the human experience.
BOB GARFIELD: And so there you have it. What is money? It's what you pay the electric bill with. Oh and it's also a story of humankind. That's it for this week's show.
One The Media is produced by Alana Casanova-Burgess, Micah Loewinger and Jon Hanrahan. Heavy lifting for this special show was by Leah Feder. We had more help from Asthaa Chaturvedi and Samantha Maldonado. And our show was edited by Brooke. Our technical director is Jennifer Munson. Our engineers this week were Sam Bair and Josh Hahn. Katya Rogers is our executive producer. Jim Schachter WNYC Vice President for news. Bassist composer Ben Allison wrote our theme. On the Media is a production of WNYC studios. Brooke Gladstone will be back next week. I'm Bob Garfield.
RON LIVINGSTON AS ROB: You’re so money and you don't even know it.
VINCE VAUGHN AS TRENT: That’s what I keep trying to telling him
JON FAVREAU AS MIKE:Could you not mess with me right now?
FEMALE CORRESPONDENT: On the Media is supported by the Ford Foundation, the John S and James L. Knight Foundation and the listeners of WNYC Radio.