For hundreds of years, cowrie shells were used as currency in Asia, Africa, Europe, and Oceania. These sea snail shells were pretty. They were used in jewelry and sewn onto clothing. Some cultures perceived them to have magical protective properties. But cowrie shells didn’t really have any tangible, practical use.
Although cowrie shells didn’t have any utility in the way that flint and steel would have been considered to have utility during much of the time period when each were in use, cowrie shells do have a few interesting attributes. They are durable. They are small and portable. Even today, it would be difficult to construct a passable fake cowrie shell. Plenty of people throughout history have passed one metal off as another — not a huge concern when trading in easily identifiable shells. A 19th century king of Dahomey said that he preferred payment in cowrie shells to payment in gold.
Today, you can buy cowrie shells in bulk for less than ten cents apiece.
What happened? Cowrie shells only had value as long as enough people believed they had value. Too many people stopped believing.
Pretty much all currency works this way. There is nothing that makes an artfully printed slip of green paper or a string of numbers on the screen of your phone inherently worth more than a cowrie shell. Yet, because we all believe in the value of U.S. dollars, they function pretty well as a medium of exchange.
Cryptocurrency, its name notwithstanding, has never really functioned well as a medium of exchange. Even though cryptocurrency is portable and doesn’t wear out over time, its wild value fluctuations have never made it of much use to buy things with. Few merchants accept crypto.
Plus, cryptocurrency seems pretty easy to steal. Just a few days ago, the FBI seized $3.36 billion in Bitcoin that had been stolen from the Silk Road marketplace a decade ago. In a separate incident, $3.6 billion in stolen cryptocurrency was linked to the 2016 hack of Bitfinex. At least…
