In Ellen Ullman, in her excellent memoir Close to the Machine, describes an odd young man she briefly took up with as an on-again off-again lover. Among his many obsessions was the notion of creating a cryptographic currency, a wholly anonymous and independent banking system. Well, it looks like someone has gone and implemented this idea. The BitCoin project "is a peer-to-peer network based digital currency." It apparently derives its backing from CPU processor cycles. I'm not exactly sure how that works, but the Ron Paul-esque libertarian dreams of the creators are quite clear in their description of the project's advantages: "Be safe from the instability caused by fractional reserve banking and bad policies of central banks."

I'm pretty sure projects like this get something deeply wrong about the social relationships that money relies on, but I'm not sure exactly what. The individualist mindset that backs all this is suspect, money relies on shared social relationships. However, the bitcoin folks clearly imagine a set of relationships among individuals, in the form of the peer-to-peer network. It is easy to explain why peer-to-peer networks do not describe the world as it currently exists. It is more difficult to explain why attempts to build them seem to inevitably fail.