Bitcoin is getting a lot of attention these days; the digital person-to-person currency system says the value of Bitcoins worldwide surpassed $1.5 billion in August. And as CNBC reports, regulators are beginning to perk up and take an interest.
Bitcoin’s platform is still a bit complex for the average consumer — here’s its own primer and here’s a just-out paper on it by the Chicago branch of the Federal Reserve bank (PDF); it includes an interesting explanation of the difference between a fiduciary currency (like Bitcoin) and a commodity-based currency such as one backed by gold.
I am not sure everyone is up — in the near term, at least — for understanding and getting involved in the complex computer platform of Bitcoin. But the notion of alternative currencies is an interesting one in tough economic times and this is a good peg for less high-tech angles you might want to pursue locally.
This recent story in Philadelphia magazine caught my eye, it says some municipalities are encouraging local commerce by creating their own currencies, which keeps the money in city limits. Here’s at least one company that is a supplier to the community scrip market — trace programs in your area to other vendors for interesting business features.
For businesses, and individuals, alternative ways of obtaining goods and services also can include bartering.
From the personal finance angle, you might consider a round-up of ways that cash-strapped consumers can come up with holiday gifts and other year-end needs. Real Simple offers a primer on “How to barter for anything” and myriad online sites like those in this round-up from MoneyCrashers offer venues for consumer bartering of goods ranging from sweaters to luxury vehicles. Check Craigslist, too. Time Banks USA explains how people can exchange hours of work and service for things they need.
I’ve had a couple of enlightening conversations lately with small business operators who told me they increasingly are using barter as a way of cutting costs or acquiring necessary goods and services to stay afloat. A commercial printer makes up flyers for a local auto mechanic, who pays his bill in oil changes and the like. The same printer runs a seasonal snow-plowing business; he said ‘I haven’t paid for a haircut in a couple of years,” because he plows his barber’s parking lot in return for services. A massage therapist trades services for website maintenance and a tree-trimming/firewood guy has an ongoing arrangement with his orthodontist.
You might want to check in with area small businesses about the utility and value of bartering, and how things are going on the local scene. A recent Forbes article urged entrepreneurs to “consider barter in your economic recovery plans,” and the National Federation of Independent Businesses has a brief primer on its website, with references to Barter News, an online publication about what’s known as the reciprocal trade industry.
In addition to informal deals, online exchanges like ITEX facilitate “cashless transactions;” the International Reciprocal Trade Association is another potential source, as is the National Association of Trade Exchanges. (Looking at businesses and services that supply and serve the bartering community might be another angle; here’s a late 2012 article from the Harvard Business Review blog about “The exploding business of bartering.”
FlashBuz, a new social media platform that lets businesses trade free goods and services to consumers who offer social media buzz, is an interesting development; here’s the group’s Dec. 11 press release in which its CEO says “It’s time we begin monetizing socializing.” You might want to ask if they have any local takers from the business side.
The IRS expects businesses and individuals to report the fair market value of goods received by bartering; I wonder how many are in compliance with this aspect of the tax code. You might want to interview some enrolled agents and accountants about how-tos and caveats for prospective barter deals, for small business and individuals.