Currency refers to electronic currencies stored electronically in banks, and makes up one out of three forms of electronic currency. While paper money is still used globally, up to 80% of the world’s currency is stored through banks electronically. From its infancy, it has grown from an alternative to conducting business to a primary form of e-commerce, and only seems to continue to grow.
The first digital currency was created during the first internet bubble of the early 2000s. It was named E-Gold and was founded in 1996 by Gold & Sliver Reserve Inc, which allowed users to transfer small amounts of the values of gold electronically. In the spring of 2000, it became the first electronic currency to offer an exchange service for other currencies.
Launching two years before PayPal, by 2004 it had over a million accounts. Another service starting in 2006, Liberty Reserve, allowed its clients to convert euros or dollars to Liberty Reserve money, and then back again. Unfortunately soon after it was revealed by the U.S. Government that criminals were utilizing these websites and they were both shut down.
The Difference Between Virtual, Digital, and Cryptocurrencies
While more and more banks are allowing for an increase in electronic banking, Virtual Currencies operate as independent money whose value is created by its original backer. However, the world’s most famous virtual currency, Bitcoin, does not fit this specification, instead encompassing aspects of all three forms of electronic currency.
Digital Currency differs from this as a money backed up by an asset worth the real-world equivalent of its value. Due to most of the world’s money being stored in bank computers, it can said that most of the world’s currency is now digital.
Cryptocurrencies refer to forms of electronic money whose transitions are encrypted. Utilizing block-chains to store data, they effectively link together and act as ledgers that users can use to keep a consistent track of data. Due to the variety of ways its price can be effected, it often fluctuates in value. Although cryptocurrencies do carry a degree of anonymity, some are still required by law to disclose their users identities.
The Future of Transactions
With more banks turning to Digital Currencies as their main form of keeping electronic records, and the growing emergence of a large variety of virtual and crypto-currencies, it can be said that the future of the world’s transactions will be set to be conducted electronically. In perhaps a hundred years, paper money could be virtually a thing of the past.