If witches and wizards made Bitcoin - it might look something like this:

Imagine a simple leather journal with a small red gem embedded in the cover. All of the pages except the last one are full - columns of hard-to-understand runes and numbers stretch from edge to edge. You notice thirty-two entries organized in two columns on each page, each entry consisting of 2 runes and a number. On the last page every so often, another line appears - rune, rune, number - and when the page fills, the journal shimmers and a new page is added.

There are lots of these journals kicking around - all identical copies that update at the same time. They're actually very easy to duplicate just touch the red gem and whisper, "Wit Copy" - another identical journal will immediately appear. To most people, these journals aren't terribly useful - you can't write on any page but the last page - it's not possible to smudge, nor tear, nor deface any other page. The last page can only be marked with a special quill, a Secret Rune Quill, and only accepts writing in the following format: Rune on this Quill, a different Rune, a number.

The Quills are quite interesting. They're easy and cheap to make for any witch or wizard with the formula. Each Quill is associated with two Runes: a public Rune that appears on the plume and a private Rune that only the owner can see. Only public Runes ever appear in the journal, and each Quill can only create an entry with its own public Rune in the first position and a different public Rune in the second. A detailed explanation would take us off into some pretty involved Cryptomancy - so we'll save it as an exercise for another time.

Now for the real guts of the Witcoin economy: Each of the entries represents a transaction - there's no actual coin, nothing physically changes hands, just a line that says: Rune1 pays Rune2 19 WitCoins. We can exchange Witcoin, e.g., if I want to buy a new wand from you for 5 WitCoin, when you hand me a wand I can write the line: "MyRune YourRune 5" into my journal. It will now appear in your journal and ALL of the other journals in the world. The journal knows how many WitCoin I have by scrolling backwards through itself and counting all of my past transactions and refuses to let me pay you more than I have.

You may be wondering, "Where do these WitCoins come from in the first place?" If you carefully inspect each page you'll notice that the first line says only has one Rune. It costs energy to create the extra pages in the journal, so each Quill drains some power from its owner. As a payment, the WitCoin network randomly awards a number of Coins to one lucky energy donor for each new page. The odds are based on the relative energy contributions - sort of like a WitCoin raffle where each witch and wizard buys tickets with their donated energy. For each page that gets added, the reward goes down - this guarantees that over time the number of WitCoin is capped.

There are a couple of things that WitCoin gives us:

• Transparency: Everyone can see every transaction
• Anonymity: Unless I know your Rune - I can't figure out who is paying whom
• Independence: For those who don't trust Gringott's WitCoin offers an alternative way to pay for goods and services
• Limited Supply: Some economists say that there are spells and magical items like the Philosopher's Stone allow the possibility of creating an unlimited amount of gold. This could have some terrible implications on the economy
• Accessibility: If there's no Gringott's branch near you, or you're a leprechaun, you may be better served avoiding the Goblin-industrial complex