What 16th-Century Venice Teaches Us About Crypto

What 16th-Century Venice Teaches Us About Crypto

On Feb. 18, 1522, a secondhand clothing merchant named Geronimo Bambarara in the crowded Rialto district of Venice came up with a new way of clearing out stock.

Instead of selling his goods directly for money, he decided to enter customers in a draw. In exchange for a 1 lira ticket, they might win more than 1,000 times that amount in cash or take home prizes of carpets, cloth of gold, fabric, amber or animals. The promotion was a success. Within a week, the numbers chancing their odds resembled the crowds at the Ascension Day religious festival, according to one contemporary diarist: "At present, in this Rialto district, nothing is done except put money on the lottery.“

It didn't last. Just 10 days after the game began, alarmed Venetian authorities banned private lotteries. Their next move was equally predictable. Having eliminated a lucrative private business, the city turned it into a public one, and started issuing tickets to raise state revenue.

That's a lesson for how cryptocurrencies may develop over the years ahead, as more widespread usage magnifies the potential for negative public consequences.

Falling and rising by double-digit amounts in a matter of hours, Bitcoin has largely given up any pretense that it