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

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iStock

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 Flooz.com 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 Flooz.com
Flooz.com

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. Flooz.com debuted in 1999, just one year after another currency-based URL, Beanz.com, 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 Flooz.com 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 Flooz.com, 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 Flooz.com cut through online marketing noise, Levitan enlisted actress Whoopi Goldberg to be their spokesperson. In exchange for company shares and Flooz.com money, Goldberg led an $8 million ad campaign for radio, television, and print that extolled the benefits of using Flooz.com.

Whether it was Goldberg’s pitch or the concept itself, Flooz.com 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 Flooz.com 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, Flooz.com 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 Flooz.com would become a leading method of payment for online transactions.

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

But it didn’t take long for the seams in the Flooz.com 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 Flooz.com 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 Flooz.com 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 Flooz.com could secure the transaction, people were still busy redeeming Flooz dollars they had already spent. Retailers then looked for Flooz.com 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 Flooz.com to file for Chapter 7 bankruptcy in August 2001. Court papers cited almost $14 million in liability. (Beanz.com 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, Flooz.com 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 Disco Demolition Night Nearly Demolished Chicago's Comiskey Park

The Museum of Classic Chicago Television, YouTube
The Museum of Classic Chicago Television, YouTube

Chicago White Sox pitcher Ken Kravec was warming up on the mound when he noticed the rush of people on the field. Preparing for a second game in a doubleheader against the Detroit Tigers, the White Sox had lost the first by a score of 4-1. The crowd had been rowdy and insolent throughout, but this was something else.

As Kravec stood on the mound, thousands of attendees descended from the bleachers and slid down poles marking foul ball territory. They dug up dirt in the field and began running off with bases. A few tried removing home plate. Kravec soon joined his teammates in the dugout, where both the White Sox and the Tigers were staring in disbelief at the mayhem.

The source of their unrest was happening in center field. It was a bonfire made up of thousands of records, mostly disco, that the team had invited fans to bring with them for a reduced admission price. Management had expected perhaps 35,000 people. Nearly 50,000 showed up. On July 12, 1979, Disco Demolition Night would go down as one of the most infamous evenings in the history of Major League Baseball. It was not only the destruction that stirred controversy, but the concern that the demonstration had a far more disturbing subtext.

 

In the mid- to late-1970s, attendance at many major league baseball stadiums was down. Teams around the country tried a variety of stunts to stir interest, including Cleveland’s notorious 10-cent beer night in 1974 that sparked a mountain of misbehavior. The White Sox were in particularly dire need of something to reinvigorate their franchise. In 1979, an average of just 10,000 to 16,000 people were coming to their games, though Comiskey Park could seat 45,000.

Team owner Bill Veeck tried to turn the games into a spectacle. There was a scoreboard that could set off pyrotechnics and other attention-grabbing additions, but nothing seemed to stick. The action on field was equally tepid. Midway through the season, the Sox held a disappointing 35-45 record.

A screen capture from footage of the Disco Demolition Night promotion at Comiskey Field in Chicago, Illinois on July 12, 1979 is pictured
The Museum of Classic Chicago Television, YouTube

Veeck’s son, Mike Veeck, was assistant business manager for the team. Like many Chicago residents, he had heard local radio shock jock Steve Dahl on WLUP, an FM rock station serving the area. Dahl was prone to disparaging the then-popular genre of disco on air, playing records and then keying up an explosion sound effect. Dahl had lost his previous job on WDAI after it went all-disco, giving him an origin story of sorts for his contempt.

Dahl, of course, wasn’t entirely alone in his disco dismissal. A trendy and dance-friendly format, disco had been dominating airwaves and Billboard charts, with Donna Summer and the Saturday Night Fever soundtrack on heavy rotation and acts ranging from KISS to the Rolling Stones recording disco singles. Even 1977’s Star Wars scored a hit with a disco tie-in album. In the first half of 1979, 13 of the top 16 tracks were disco. Rock enthusiasts like Dahl thought the genre was inferior to their preferences and decried its widespread success.

Though Veeck had no particular opinion about disco, he saw an opportunity to partner with Dahl for a stunt. At Comiskey Park, attendees could get in for just 98 cents if they brought in one disco record for what was dubbed Disco Demolition Night. Once employees collected the records, Dahl would appear between the doubleheader with the Tigers and proceed to queue up an explosion.

Dahl agreed and promoted the appearance heavily on the air. The Veecks contacted Chicago police and asked for increased security as they expected up to triple their usual attendance as a result of the promotion—upwards of 35,000 people. With interest in the Sox low all season, it’s not clear that authorities took the request seriously.

They should have. Come July 12, people began lining up for the evening doubleheader as early as 4 p.m. A cursory glance at the crowd revealed that many of them were not baseball fans. There were a large number of teenagers as well as several attendees wearing concert T-shirts, a hint that the promotion had attracted people looking for a spectacle rather than a sporting event. Inside, many clung to their records instead of tossing them in the bins near the gates. As seats began filling up inside, thousands of people were armed with vinyl records. The scene had the makings of an active demonstration, not a passive entertainment.

As the White Sox and Tigers played their first game, spectators began tossing drinks and records onto the field. Chants of “disco sucks” filled the stadium. Firecrackers snapped in the air. When the game wrapped, Dahl emerged on the field in military fatigues, while a pile of disco records sat in center field. Inciting the crowd more, Dahl grabbed a microphone and let loose anti-disco invective before giving the signal to immolate the records. A fuse was lit and soon the pile was on fire.

Rather than pacify the crowd, the sight of the blaze seemed to embolden them. Kravec and the other players watched as people swarmed the field, sliding down poles and risking injury by jumping from the deck to the grass. Records were hurled, sticking into the ground. People tried to climb inside the skybox occupied by the wife and children of team manager Don Kessinger. Cherry bombs were ignited and exploded. The air took on a smoky atmosphere of flying projectiles, with an estimated 7000 people—almost the typical crowd of a regular season game—trampling the diamond.

Some players armed themselves with bats, their nearest available weapon. Announcer Harry Caray took to the public address system to call for order, which went ignored.

The crowd, however raucous, was largely nonviolent and no fights were reported. When police finally arrived 30 minutes later to restore order, 39 people were arrested for disorderly conduct. A vendor with a broken hip was the worst injury recorded. The main damage was to the field itself, which had been cratered by the explosion.

With no other alternative, the Sox were forced to forfeit the game, though the team wanted to call it a rain delay. The only rain had been from the beer bottles.

 

The official attendance was reported as 47,795, though Mike Veeck believed the crowd was as large as 60,000. Many had climbed over gates and overwhelmed ushers, crashing the stadium and getting in without paying admission. Disco Demolition Night had quickly turned from a purportedly clever marketing idea to a nightmare. Dahl would later admit to being more than a little scared by the whole ordeal.

The forfeit was the first by a major league team in five years. Soon, Bill Veeck would be out as president, selling the team in 1981; Mike Veeck didn’t get another job in baseball for 10 years—both situations reportedly due in large part to the near-riot that had transpired. But that would not be the only fallout from the stunt.

A screen capture from footage of the Disco Demolition Night promotion at Comiskey Field in Chicago, Illinois on July 12, 1979 is pictured
The Museum of Classic Chicago Television, YouTube

As ushers admitted fans into the stadium, they noticed a number of the records being turned in were by black artists—not just disco, but soul, R&B, and other genres. Steve Wonder and Marvin Gaye were among the performers destined for the bonfire. Because disco was popular among minority groups including Latinos and the gay community, observers believed Dahl had stirred up something more sinister than a simple distaste for disco music.

“People started running up on me, yelling ‘Disco sucks!’ in my face, getting in my face, confronting me as a person that ‘represents’ disco, and there were thousands of people running around in this stadium buck wild,” Vince Lawrence, an usher at the stadium that night, told Yahoo! Entertainment in 2019. “I started going, ‘Wait a minute, why am I disco?’” Lawrence, who is black, was actually wearing a shirt endorsing Dahl’s radio station.

Later, Lawrence said he was surprised most of the media coverage had been about the damage done to the baseball field, not the undercurrent of the protest. “It was evident that it was seen as OK, because the next day it was in the paper everywhere, all over the news, but the biggest complaint about the issue was not, ‘Hey, why the heck is it OK to just actively destroy somebody’s culture?’ That wasn’t the story. The story was like, ‘Hey, the lawn on this baseball field got f***ed up.'"

In interviews, Dahl refuted any claims he had intended to stir up any racial animosity. He simply hated disco and decided to engage in the kind of promotional stunt common among disc jockeys at the time. But the controversy returned in summer 2019, when the White Sox offered a T-shirt “commemorating” the demolition stunt. The move was criticized for being in poor taste.

As a tool to diminish disco, Dahl and Veeck’s themed evening was somewhat successful. Radio stations took to playing less of it and record labels began to shy away from the genre, forcing it underground. Of course, it’s likely disco would have been a cultural fad regardless. But what is superficially an outrageous story about a sporting stunt gone awry has also been looked at as a rejection of what disco represented: a diversity in tastes and spirit. It's for that reason Disco Demolition Night remains an infamous black eye in baseball history.

Tom Dempsey, the Toeless NFL Kicker Who Set a Field Goal Record

33ft/iStock via Getty Images
33ft/iStock via Getty Images

Things weren't looking good for the New Orleans Saints on the evening of November 8, 1970, during a televised game against the Detroit Lions at Tulane Stadium. Though Saints quarterback Billy Kilmer had managed to connect with receiver Al Dodd on a 17-yard pass that stopped the clock, New Orleans was still down 17-16 with just two seconds left in the game. Worse yet, they were on their own 37-yard line—leaving 63 yards between them and the end zone.

Saints head coach J.D. Roberts, who had only been hired the week before, huddled with offensive coordinator Don Heinrich to quickly consider their options. There weren’t any. Suddenly, kicker Tom Dempsey, who had joined the team the year before, materialized. “I can kick it,” Dempsey told Roberts.

Dempsey would later recall that he didn’t know exactly how far the ball had to travel or that it would be an NFL record if he nailed it. If he had, he said, maybe he would’ve gotten too nervous and shanked it. But kicking the ball was what Dempsey did, even though he was born with only half of a right foot.

Heinrich sighed. There was no other choice. “Tell Stumpy to get ready,” he said.

 

Dempsey was born on January 12, 1947, in Milwaukee, Wisconsin, and later moved with his family to California. As a student at San Dieguito High School in Encinitas, California, Dempsey appeared unbothered by the congenital defect that resulted in a partial right foot and four missing fingers on his right hand. Dempsey wrestled and ran track. In football, he used his burly frame—he would eventually be 6 feet, 2 inches tall and weigh 255 pounds—to clobber opposing players as an offensive lineman. When coaches wanted to send opponents flying, they called in Dempsey.

After high school, Dempsey went on to attend Palomar Junior College in San Marcos, California, where he played football as a defensive end. At one point, when the team was in need of a kicker, the coach asked his players to line up and do their best to send the ball in the air. None kicked harder or farther than Dempsey, who became the kicker for the team and performed while barefoot, wrapping the end of his foot in athletic tape.

Tom Dempsey's modified football shoe is pictured
Tom Dempsey's modified football shoe.
Bullock Texas State History Museum

Playing at Palomar prepared Dempsey for a dual role as both lineman and kicker. But his strength, which made him so formidable on the field, occasionally got him into trouble on the sidelines, and he would eventually be kicked off the Palomar team for punching one of his coaches. After the incident, Dempsey tried out for the Green Bay Packers but found the physicality of professional players a little too much for him to handle. Rather than get into on-field collisions as an offensive lineman, he decided to focus solely on the aptitude he seemed to have for kicking. He eventually earned a spot on the San Diego Chargers practice squad in 1968. There, head coach Sid Gillman decided to encourage his choice of position—with some modifications.

Gillman enlisted an orthopedist to help develop a special leather shoe for Dempsey to wear. The boot had a block of leather 1.75 inches thick at one end and was mostly flat. Instead of kicking it soccer-style, as most players do today, Dempsey was able to use his leg like a mallet and hammer the ball with a flat, blunt surface.

The shoe, which cost $200 to fabricate, came in handy when Dempsey joined the Saints in 1969. He made 22 out of 41 field goals his rookie year and found himself in the Pro Bowl. But the 1970 season was comparatively dismal, and the Saints were holding a 1-5-1 record when they met the Detroit Lions on that night in November.

With two seconds left, “Stumpy” (Dempsey found the nickname affectionate rather than offensive) trotted onto the field. At 63 yards, he would have to best the then-record set by Baltimore Colts kicker Bert Rechichar in 1953 by seven yards.

No one appeared to think this was within the realm of possibility—you could almost hear a chuckle in CBS commentator Don Criqui's voice when he announced that Dempsey would be attempting the feat. Even the Lions seemed apathetic, not overly concerned with attempting to smother the play.

The ball was snapped by Jackie Burkett and received by Joe Scarpati, who gave it a quarter-turn. Dempsey remembered advice once given to him by kicking legend Lou “The Toe” Groza: Keep your head down and follow through. He took a step toward the ball and swung his leg like a croquet mallet, smashing into the football with a force that those on or near the field compared to a loud bang or a cannon. It sailed 63 yards to the goal post, which at the time was positioned directly on the goal line, and just made it over the crossbar.

Below, the referee threw his hands in the air to indicate the kick was good, punctuating it with a little hop of excitement. Dempsey was swarmed by his teammates and coaches. Don Criqui’s attitude in the booth quickly switched from amusement to incredulity. The Saints had won, 19-17.

“I don’t believe this,” Criqui exclaimed.

Neither could fans. In an era before instant replay, ESPN, or YouTube, you either caught Dempsey’s game-winning play or you heard about it at work or school the next week. Owing to its fleeting existence in the moment, schoolyards and offices filled with stories about how Dempsey’s boot may have somehow been augmented with a steel plate or other modification to boost his kicking prowess.

No such thing occurred, though that didn’t stop criticism. Tex Schramm, an executive with the Dallas Cowboys and chairman of the NFL’s competition committee, thought the shoe was an unfair advantage that allowed Dempsey to smash the ball like a golf club hitting a dimpled target. In 1977, the NFL instituted the “Tom Dempsey Rule,” which mandates that anyone and everyone has to wear a shoe shaped like a full foot. There would be no more allowances for special orthopedic shapes.

Dempsey appeared to take it all in stride. Shortly after his victorious kick, he received a letter from President Richard Nixon congratulating him on his inspirational demonstration. Immediately after the game, police officers went in to congratulate him by handing him cases of Dixie beer. Dempsey's girlfriend (and future wife) Carlene recalled that he didn’t come home for days due to rampant partying. When he finally settled down, they got married.

 

Dempsey spent a total of 11 years in the NFL, playing for the Saints, the Philadelphia Eagles, the Los Angeles Rams, the Houston Oilers, and finally the Buffalo Bills. In total, he made 159 field goals out of 258 attempts. For the next several decades, he would work as a salesman in the oil industry and manage a car lot before retiring in 2008 and settling down back near New Orleans, where he lives today. Over the years, Dempsey has made several appearances at autograph shows, where he was regularly peppered with questions about the one kick that defined his career.

Almost as amazing as the kick was its attrition in the record books. While several other men managed to tie Dempsey’s record, it wasn’t until Matt Prater of the Denver Broncos kicked a 64-yard field goal on December 8, 2013, that it was finally broken—almost 43 years to the day. Some observers note that most of these notable field goals took place in Denver, where the air is thin and presumably more hospitable to kicking for distance. Dempsey managed it in New Orleans—and without toes.

Curiously, Dempsey’s legendary play was actually foreshadowed one year earlier. On October 5, 1969, he kicked a 55-yard field goal in Los Angeles. That was just one yard shy of the record he would obliterate the following year.

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