The use of alternative currencies is on the rise as consumers lose trust in traditional institutions.
At Contagious magazine’s Now/Next/Why daylong conference in New York yesterday, the emergence of alternative currencies was a hot topic. The dramatic rise and fall of Bitcoin has highlighted the fact that consumer confidence is shifting away from traditional institutions like governments and central banks in favor of smaller, more independent alternatives. According to a recent study by Contagious, 21 percent of Americans and 15 percent of Britons would be comfortable with abandoning traditional sovereign currencies for currencies not tied to a major banking institution. Local money has already taken off in Brazil, which reportedly has dozens of local currencies in circulation. Closer to home for us, North Brooklyn has an informal currency, the Brooklyn Torch.
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The conference also touched on the concept of Alternative Brand Currencies, one of our 100 Things to Watch in 2013. While in-game currencies (think Farmville credits) have existed for some time, virtual currency is expanding: This month Amazon is planning to introduce Amazon Coins, with which Kindle Fire owners in the U.S. will be able to buy apps, games and in-app items. In Egypt, where retailers often lack the coins to give adequate change, Vodafone and JWT created Fakka Cards, top-up vouchers for mobile phones that can replace these small denominations with airtime. In Mexico, Nike’s “Bid Your Sweat,” created by JWT, was an online auction of Nike products that let bidders “pay” with kilometers they had tracked on a Nike+ account. (We outlined some other interesting initiatives here last year.)
Another currency will be data, noted Marc Guildmann of Enliken, an online dashboard that helps users understand and control how their browsing data is being used. As consumers grow more aware of the value of their data and the trail they generate—i.e., their demographic information and personal preferences, their browsing history—they will seek to monetize it, looking to exchange it for something of value. Brands will increasingly need to provide compelling benefits to consumers willing to share their personal information.