The Ithaca HOURS was a local currency that used in Ithaca, New York. It was one of the longest running local currencies even though it ultimately stopped being used. The HOUR was a physical currency, i.e. cash, and the switch to electronic transfer altered the way people made payments.
It was set that 1 HOUR was equal to $10 USD and was designed to be used as payments for work. The currency rate was negotiable.
The currency was started in 1991 by Daniel Glover. It was modeled after different local currencies that were created during the Great Depression.
When the system was first started, 90 people agreed to accept HOURS as pay for their services. They all agreed to accept HOURS despite the lack of a business plan or guarantee. Glover then began to ask for small donations to help pay for printing HOURS.
The notes were run off in October 1991 with the first being distributed on October 18th.
On October 19, 1991, Glover bought a samosa from Catherine Martinez at the Farmers' Market with Half HOUR #751—the first use of an HOUR. Several other Market vendors enrolled that day. During the next years more than a thousand individuals enrolled to accept HOURS, plus 500 businesses.
Over time in circulation, there were millions of dollars worth of value traded in HOURS.
The idea of the project was to stimulate business within the local community. HOURS were only good at local businesses. It had no conversion to national currency. Thus, the idea is to build a network of local businesses. Obviously, to be economically sustainable, the notes received by businesses have to also be spent locally.
When people started to make payments electronically, a lot of local currencies faced their demise. The Ithaca HOUR was no exception. Since it was cash, the transfer had to be physical. While the geographic location was not a problem since people exchanging cash have to be face-to-face, the inconvenience ended up diminishing the utility of the currency.
Ideas like this are believed to be some of the precursors to the cryptocurrency era. While that is not certain in terms of the sustainability, it is evident that the success of local currency projects provides the new era of money with great potential.
