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Mackerel Is Money in a Prison Economy: NPR Story on Charlie Shrem

Jeffrey A. Tucker

I was amazed and thrilled to wake to a fascinating and in-depth NPR story on the brilliant Charlie Shrem, an early mover in the Bitcoin space who did time in federal prison for his innovations.

In the prison where Charlie spent 18 months, the main currency was mackerel packed in cans.The story is actually fair and even affectionate, as it should be. Shrem was the first to implement a full-scale and highly successful money exchange service for Bitcoin at a time when hardly anyone else even believed that digital money could exist as a viable substitute for national money.

It was exactly during this time that I got to know him as a friend. It was only three years ago, but it seems like the age of innocence in retrospect. I could tell that Charlie was brilliant but I had no idea of the scale of the enterprise he was undertaking. In the interview, Charlie also speaks of the heady naivete of those days.

In the story, Charlie shares his dramatic story, but the reporters smartly saw that he had some insights on the prison economy. He speaks about the forms of money used in the prison and the complex pricing system that emerges even under these conditions. Which money comes to dominate depends on conditions of time and place.

In the prison where Charlie spent 18 months, the main currency was mackerel packed in cans. All prices were quoted in terms of these.

He had nothing but time on his hands, and it was late at night when he began to think through the source of value of money of all sorts, and how the payment system of mackerel cans might be made more efficient through blockchain technology. Yes, seriously. The NPR segment discusses his intellectual speculations at length. He thinks through how a blockchain would work without the internet and how a distributed network might emerge in physical space.

This segment goes a very long way toward explaining how Bitcoin became valuable and how the blockchain itself is currently changing the way many institutions think about information storage and transmission.

It’s a wonderful story and worth a listen.

It was my pleasure to interview Charlie in 2014, following his conviction on charges of unlicensed money transfers and in the month before he went to prison. We talked about his personal background, family, and faith.

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