Is Digital Currency revolutionizing the virtual experience?
December 18, 2018 7:39 am,
What exactly is Digital Currency? It does not have a physical existence and is completely digital. This intangible property of digital currency makes it different from the normal currency. There are other factors too, that makes digital currency stand out. Transfer of ownership of the digital cash, regardless of the geographical borders from any person to the other, has made it hassle-free and easy. Digital currency transactions also take no time at all.
Virtual and Cryptocurrency
Digital currency can be categorized into two, namely Virtual currency and cryptocurrency. Digital currency is often used interchangeably with these two but is different from them in more than one ways. Cryptocurrency is through and through decentralized, making the users, the authority to look after any malpractices. Digital currency can be centralized and at times even asks for user identity in order to make transactions. There are also legal provisions for the digital currency, such as Directive 2009/110/EC in the European Union and Article 4A of Uniform Commercial Code in the US. Similar counterparts are absent for both virtual and cryptocurrencies.
Evolution of Digital Currency
The inception of digital currency can be associated with the introduction of the idea of e-gold in 1996, a digital gold currency, which gives users a virtual platform to transfer value amount of gold to other e-gold account holders. This was terminated in 2009 due to legal issues. Liberty Reserve was yet another centralized digital currency service platform that enabled users to convert euros and dollars to Liberty Reserve euros and dollars. This too was dissolved due to legal issues. Pay Pal, established in 1998, also had digital currency as its core idea.
Does digital currency have any value, or is it just a scam? One of the most popular examples of cryptocurrency is indeed, the Bitcoin. Since it is not printed by the government, it cannot be used to pay taxes or debts. The existence of Bitcoin is only in the digital world. There are two ways to earn Bitcoins: one is through Mining and the other, through trade. There is even a stock exchange based on bitcoin started in the US. The cap amount of Bitcoin is 2IM, which is a really huge amount when compared to other altcoins like Ethereum, Ripple, and Litecoin. Also, the exchange values of altcoins fluctuate to large extents, making them less trustworthy and riskier.
Investments in digital currency
Bitcoin is more efficient when compared to other physical currencies, as it is decentralized and also more transparent. It has an open source and anyone can verify the transactions of anyone. The blockchain technology, with the help of cryptography, holds the system safe. Like any other digital business like Facebook, Netflix, and Google, the value of bitcoin depends on the digital trust of the users. Crowd sale and its growing user base is proof of the acceptance of cryptocurrency among users. ICO is also gaining acceptance among digital users as a solid source of investment. If people buy more Bitcoins than they sell, its value increases and vice versa. At the end of the day, like any other investments, thorough research and proper decision making can bring you to gain in the digital world too.