A future of digital currency

Currency refers to electronic currencies stored electronically in banks and is one of three forms of electronic currency. While paper money is still used around the world, up to 80% of the world’s currency is stored electronically by banks. From the start, it has evolved from an alternative way of doing business to a primary form of e-commerce, and it only seems to be growing.

origins

The first digital currency was created during the first internet bubble in the early 2000s. It was called E-Gold and was founded by Gold & Sliver Reserve Inc in 1996, allowing users to transfer small amounts of gold value electronically. In the spring of 2000, it was the first electronic currency to offer an exchange service for other currencies.

It started two years before PayPal and had over a million accounts by 2004. Another service, which began in 2006, Liberty Reserve, allowed its customers to convert euros or dollars into Liberty Reserve money and then back again. Unfortunately, it was soon learned by the US government that criminals were using these websites, and both were shut down.

The difference between virtual, digital and cryptocurrencies

As more and more banks allow electronic banking to grow, virtual currencies function as independent money, the value of which is created by its original backer. However, the world’s most famous virtual currency, Bitcoin, does not conform to this specification, instead incorporating aspects of all three forms of electronic currency.

Digital currency differs from this as money backed by an asset that is worth the real-world equivalent of its value. Since most of the world’s money is stored in bank computers, it can be said that most of the world’s currency is now digital.

Cryptocurrencies refer to forms of electronic money whose transactions are encrypted. By using blockchains to store data, they are effectively linked together and act as ledgers that allow users to perform consistent data tracking. Due to the wide range of pricing options, it often fluctuates in value. Although cryptocurrencies offer a certain level of anonymity, some are still required by law to disclose the identities of their users.

The future of transactions

With more and more banks turning to digital currencies as the main form of electronic record keeping and a wide variety of virtual and cryptocurrencies emerging, it is safe to say that the future of global transactions will be electronic. In maybe a hundred years, paper money could practically be a thing of the past.

Thanks to Ador Talukdar | #future #digital #currency