Before Bitcoin: The Rise and Fall of Flooz E-Currency


In the late 1990s, Silicon Valley entrepreneur Spencer Waxman was in Morocco on holiday when he heard an Arabic slang term for money—flooz—that stuck with him. In the dot-com boom taking place back in the United States, URLs with obscure etymology were popular. When Waxman and partner Robert Levitan decided to co-found a novel way of disrupting the online commerce industry, calling it was almost a foregone conclusion.

What Levitan and Waxman envisioned was a virtual gift certificate that would drive business to participating online retailers, give consumers some sense of security over their private information, and make shopping for stubbornly gift-resistant recipients easy. Rather than merely offering cyber currency, this was a service with purpose.

Unfortunately, it was also one that was doomed to fail.

A screen capture of

Non-cash currency has been with us since the Chinese used cowry shells to sort out debt for goods and services more than 3000 years ago. In the 1960s, credit cards became an alluring alternative to saving and carrying paper bills. When online retailing exploded in the 1990s, it was only natural that startups would begin to explore virtual payment methods.

At the time, digital transactions were perceived by many consumers to be a near-guarantee of identity theft. Handing a card to a vendor in a closed-loop retail environment was one thing, but the thought of hackers seizing their information once it was entered into the borderless environment of the internet kept many away from online shopping.

As it turns out, that paranoia would turn out to be justified in our current climate of constant data breaches. It was also good for businesses hoping to turn their apprehension over credit card security into a monetized solution. debuted in 1999, just one year after another currency-based URL,, had garnered press. Beanz were a kind of earned points system, with approved transactions gifting customers with redeemable gift vouchers. Flooz took a different approach: Customers would sign up to and purchase gift certificates for specific retailers, which they could then use themselves or pass along to a gift recipient via email.

For businesses, it was a way of driving traffic to sites; for consumers, it was a way to keep credit card transactions limited to one vendor; for, being the intermediary meant taking a 15 to 20 percent cut of completed transactions on the selected retail sites, which ranged from Godiva Chocolates to Barnes & Noble and Tower Records.

To help cut through online marketing noise, Levitan enlisted actress Whoopi Goldberg to be their spokesperson. In exchange for company shares and money, Goldberg led an $8 million ad campaign for radio, television, and print that extolled the benefits of using

Whether it was Goldberg’s pitch or the concept itself, met with a receptive audience. The company debuted in the fall of 1999, and had opened 125,000 accounts by January 2000. That year, roughly $25 million in money was purchased and used. (In a nod to the impenetrable vocabulary of the internet at the time, the media loved to point out that Beanz could be used to purchase Flooz.)

Bolstered by the attention and early success, was eventually able to raise $35 million in venture capital. Consumers could meet their gifting obligations by emailing a code to their gift recipient without having to waste time shopping. For a time, it appeared would become a leading method of payment for online transactions.

Actress and spokesperson Whoopi Goldberg is photographed during a public appearance
Paul Hawthorne/Getty Images

But it didn’t take long for the seams in the model to show. While gifting vouchers to family and friends was convenient for the gifter, the giftee was stuck with a very limited number of vendors that took as payment. If Amazon, for example, had a deal on a DVD or book that Barnes & Noble didn’t, Flooz users were out of luck. Shopping for a bargain wasn’t possible.

The second and most crippling detail was one was forced to make in order to strike deals with vendors. The company guaranteed its transactions, meaning that it would make good on orders even if Flooz dollars had been purchased via fraudulent means. By the summer of 2001, that commitment became a tipping point. Agents from the FBI informed Levitan that they suspected a ring of Russian hackers had purchased $300,000 worth of Flooz in order to launder funds from stolen credit cards.

This created a paralyzing cash flow problem: As their credit card processor withheld funds until could secure the transaction, people were still busy redeeming Flooz dollars they had already spent. Retailers then looked for to reimburse them. Suddenly, customers trying to pay with Flooz were greeted with error messages that the site was down.

Those issues, coupled with the fact that corporate clients had already started to move away from gifting employees with Flooz dollars, forced to file for Chapter 7 bankruptcy in August 2001. Court papers cited almost $14 million in liability. ( was also a casualty of the dot-com bust, when participating retailers processing the points steadily went out of business.)

Levitan rebounded, founding the Pando file sharing network and selling it to Microsoft in 2011 for $11 million. Meanwhile, remains a barely-remembered footnote in e-currency, though it would be hard to chart the rise of digital funds like Bitcoin without it. Like with so many other good ideas, timing is everything.

When The Day After Terrorized 100 Million Viewers With a Vision of Nuclear War

Before Nicholas Meyer's made-for-television film The Day After had its official airing on November 20, 1983, then-President Ronald Reagan and his Joint Chiefs of Staff were given screening copies. In his diary, Reagan recorded his reaction to seeing Meyer's graphic depiction of a nuclear holocaust that devastates a small Kansas town, writing:

"It's very effective and left me greatly depressed. So far they [ABC] haven't sold any of the 25 spot ads scheduled and I can see why. Whether it will be of help to the 'anti-nukes' or not, I can't say. My own reaction was one of our having to do all we can to have a deterrent and to see there is never a nuclear war."

Just a few days later, the rest of America would see what had shaken their president. Preempting Hardcastle and McCormick on ABC, the 8 p.m. telefilm drew a staggering 100 million viewers, an audience that at the time was second only in non-sports programming to the series finale of M*A*S*H. According to Nielsen, 62 percent of all televisions in use that night were tuned in.

What they watched didn't really qualify as entertainment; Meyer stated he had no desire to make a "good" movie with stirring performances or rousing music, but a deeply affecting public service announcement on the horrors of a nuclear fallout. He succeeded … perhaps a little too well.


The idea for The Day After came from ABC executive Brandon Stoddard, who had helped popularize the miniseries format with Roots. After seeing The China Syndrome, a film about a nuclear accident starring Jane Fonda, Stoddard began pursuing an "event" series about what would happen to a small town in middle America if tensions between the Soviet Union and the United States escalated to catastrophic levels. Films like Dr. Strangelove had depicted moments between politicians debating whether to use powerful weapons of mass destruction, but few had examined what the consequences would be for the everyday population.


Reagan had dubbed the Soviet Union "the evil empire" in 1982, so the time seemed right to bring such a project to TV viewers. Stoddard hired Barnaby Jones writer Edward Hume to craft a script: Hume drew from research conducted into the effects of nuclear war and radiation fallout, including a 1978 government report, The Effects of Nuclear War, that contained a fictionalized examination of how a strike would play out in a densely populated area. Stoddard also enlisted Meyer, who had proven his directorial chops with Star Trek II: The Wrath of Khan, but considered the assignment a "civic responsibility" more than a creative endeavor.

Meyer and the film's producers selected Lawrence, Kansas (pop. 50,000) as the setting for the movie and got permission from city officials to turn their town into a post-apocalyptic landscape. Throughout the summer of 1982, tons of ash, dirt, and rubble were trucked in and spread over the ground; food coloring blackened farming crops. Thousands of locals were enlisted to portray victims of a nuclear attack, agreeing to roll in dirt and have their hair shaved off to simulate a miserable death via radiation poisoning.

Meyer believed that setting the film in a small town would make it more impactful and relatable to audiences. "Other movies that had attempted to deal with the subject of nuclear holocaust had always been set in big cities," he recalled in 2003. "But a great number of people in the United States do not live in big cities, so they were witnessing an event that seemed to bear scant relation to them."

That pursuit of realism wasn't always to the network's benefit. ABC originally planned a four-hour film to run on two consecutive nights, but filling up that much commercial time proved to be a challenge. Fearing a graphic and partisan display of anti-nuclear propaganda, many loyal advertisers refused to let their spots air during The Day After. (Meyer later joked that all the "generals" pulled out, including General Mills and General Foods.) They were ultimately able to sell a little over 10 minutes of commercial time, which prompted executives to condense the movie to a two-hour presentation. Meyer, who thought the script was padded to begin with, agreed with the decision.

ABC sensed that the film would be provocative and took unprecedented steps to handle the inevitable viewer response. A 1-800 number was set up to field calls from people concerned about an actual nuclear disaster; the network also issued pamphlets that acted as viewing guides, with fact sheets on nuclear weapons. Psychologists warned audiences would experience "feelings of depression and helplessness." Meyer was, in effect, making a disaster movie with the characters being offered no help of rescue. The film had been openly endorsed by anti-nuclear organizations as being a $7 million advertisement for their stance, and some TV industry observers wondered whether ABC would even air it at all.


Prior to The Day After's November 20 debut, actor John Cullum appeared onscreen and delivered a warning. Calling the film "unusually disturbing," he advised young children to be led away from the television and for parents to be prepared to field questions older kids might have.

A still from 'The Day After' (1983)

With that, The Day After commenced. It was every bit as terrifying as viewers had been told it would be. For the first 50 minutes or so, actors like Jason Robards, John Lithgow, and Steve Guttenberg established their characters in Lawrence, largely oblivious to an incident on the border of East Germany that triggered an armed response from both Russia and the U.S. As missiles fell, a mushroom cloud vaporized the community; those who survived were doomed to brief and miserable lives as radiation destroyed their bodies.

Dramatizing what had previously been a sterile discussion about nuclear defenses had its intended effect. Viewers shuffled away from their televisions in a daze, struck by the bleak consequences of an attack. The people of Lawrence, who had a private screening, were particularly affected—it was their town that appeared destroyed. Residents exited the theater crying.

What ABC lacked in ad revenue it more than made up for in ratings. The mammoth audience was comparable to Super Bowl viewership; the network even presented a post-"game" show of sorts, with Ted Koppel hosting a roundtable discussion of the nuclear threat featuring Carl Sagan and William F. Buckley. Sagan is believed to have coined the term "nuclear winter" on the program, while Secretary of State George Shultz argued the necessity of harboring nuclear weapons to make sure the nation could protect itself.

The experience stuck with Reagan, who signed a nuclear arms treaty—the Intermediate-Range Nuclear Forces, or INF, Treaty—with Mikhail Gorbachev in 1987, leading to longstanding speculation that The Day After may have helped sober political attitudes toward mutually assured destruction.

Pete Jelliffe, Flickr // CC BY-ND 2.0
Pop Culture
Glove Story: The Freezy Freakies Phenomenon of the 1980s
Pete Jelliffe, Flickr // CC BY-ND 2.0
Pete Jelliffe, Flickr // CC BY-ND 2.0

Kids who grew up in the northeast in the 1980s were pretty invested in a fad that might have gone unnoticed in warmer parts of the country. Cajoling their parents at department stores during shopping trips, hundreds of thousands of them came home sporting a pair of Freezy Freakies—thick winter gloves that came with a built-in parlor trick. When the temperature dipped below 40°F, an image would suddenly appear on the back part of the material.

Swany America Corporation, which made, marketed, and distributed the gloves, released more than 30 original designs beginning in 1980. There was a robot, a unicorn, rocket ships, ballerinas, rainbows, snowflakes, and various sports themes, though the “I Love Snow” image (below) may have been the most popular overall. At the height of Freezy mania, Swany was moving 300,000 pairs of gloves per year, which accounted for about 20 percent of their overall sales.

A Freezy Freakies glove before and after the temperature change
Freezy Freakies

“Boys loved the robot design,” Bruce Weinberg, Swany’s vice president and a former sales director for Freezy Freakies, tells Mental Floss. “Above 40 degrees, the image would disappear.”

The secret to the $13 Freakies was thermochromic ink, a temperature-sensitive dye that's been used in mood rings and heat-sensitive food labels and can appear translucent until it's exposed to warmer temperatures. Swany licensed the ink from Pilot, the Japanese-based pen company, after Swany CEO Etsuo Miyoshi saw the technology and thought it would be a good fit for his glove-focused operation. (Though they experimented with making luggage in the 1990s, Swany has predominantly been a manufacturer of higher-end ski gloves.)

Weinberg isn’t sure how Miyoshi settled on the “Freezy Freakies” name—the president is now retired—but says Miyoshi knew they had a hit early on. “After a few seasons, they could tell they had a winner product,” he says. Swany even put advertising dollars into TV commercials, a rare strategy for glove-makers not named Isotoner.

Pilot was able to adjust the temperature at which the ink would become transparent, or vice versa. If kids were impatient, or if it happened to be during the summer, Weinberg says it wasn’t uncommon to find Freezy Freakies stuck in the freezer so they could materialize their art design. “At trade shows, we’d do something similar with some ice or a cold soda,” he says. “All of a sudden, some ice cubes would make it change, and buyers would think that was really cool.”

The Freakies were such a hit that Swany licensed jackets and considered changing the name of the company to the same name as the glove. It’s probably just as well they didn’t: While Freakies lasted well over a decade, by the 1990s, things had cooled. In the new millennium, Swany was down to selling just a few hundred pairs a year. Color-changing ink for coffee mugs or beer cans was more pervasive, wearing down the novelty; knock-offs had also grabbed licensed cartoon characters, which Swany was never interested in pursuing.

The brand was dormant when a company named Buffoonery approached Swany in 2013 to license Freezy Freakies for a crowdfunded revival. This time, the gloves came in adult sizes for $34. The partnership has been successful, and Weinberg says Buffoonery has just signed an extension to start producing kids’ gloves.

“Parents will probably want matching ones for their kids,” Weinberg says. And both might still wind up in the freezer.