Passing cash from bank notes to bitcoin: standardizing money

Abstract

This essay is about the modern bank note and bitcoin and how each standardizes money. Whether constituted by paper or protocol, whether performing (or failing) as a store of wealth, a medium of exchange, or unit of account, bank notes and bitcoins enact interchangeable equivalence with themselves, every one-pound note or bitcoin the same as another, and their mode of passing hand-to-hand or peer-to-peer also conscripts their holders as readily interchangeable. This essay examines the different ways that these two types of currency engineered this standardization, and I show how the new blockchain technology of Bitcoin innovated upon the standardizing process that made bank notes interchangeable. As I recount in the essay’s first half, standardizing physical bank notes involved re-imagining them detached from the temporality of any specific contractual transaction so as to be, like coin, grasped as immediately physically interchangeable, and the bank note used print and the act of reading to do so. In the essay’s second half, I discuss how, by contrast, Bitcoin standardizes money not by operating on any physical object, not even a digital one, but by creating a sense of immediately fungible value through maintaining the unique historicity of every transaction in the system.