Digital Currency

DEFINITION of ‘Digital Currency’

A digital currency is a form of currency that is available only in digital or electronic form, and not in physical form. It is also called digital money, electronic money, electronic currency, or cyber cash.

BREAKING DOWN ‘Digital Currency’

Digital currencies are intangible and can only be owned and transacted in by using computers or electronic wallets which are connected to the Internet or the designated networks. In contrast, the physical currencies, like bank notes and minted coins, are tangible and transactions are possible only by their holders who have their physical ownership.

Digital Currency
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Like any standard fiat currency, digital currencies can be used to purchase goods as well as to pay for services, though they can also find restricted use among certain online communities, like gaming sites, gambling portals, or social networks.

Digital currencies have all intrinsic properties like a physical currency, and they allow for instantaneous transactions that can be seamlessly executed for making payments across the borders when connected to supported devices and networks. For instance, it is possible for an American to make payments in a digital currency to a distant counterparty residing in Singapore, provided that they both are connected to the same network required for transacting in the digital currency.

Digital currencies offer numerous advantages. As payments in digital currencies are made directly between the transacting parties without the need of any intermediaries, the transactions are usually instantaneous and zero- to low-cost. This fares better compared to traditional payment methods that involve banks or clearing houses. Digital currency based electronic transactions also bring in the necessary record keeping and transparency in dealings.
Difference between Digital, Virtual, and Crypto Currencies

Since they exist in a lot of variants, digital currencies can be considered a superset of virtual currencies and cryptocurrencies.

If issued by a central bank of a country in a regulated form, it is called the “Central Bank Digital Currency (CBDC).” While the CBDC only exists in conceptual form, England, Sweden and Uruguay are few of the nations that have considered plans to launch a digital version of their native fiat currencies.

Along with the regulated CBDC, a digital currency can also exist in unregulated form. In the latter case, it qualifies for being called a virtual currency and may be under the control of the currency developer(s), the founding organization, or the defined network protocol, instead of being controlled by a centralized regulator. Examples of such virtual currencies include cryptocurrencies, and coupon- or rewards-linked monetary systems.

A cryptocurrency is another form of digital currency which uses cryptography to secure and verify transactions and to manage and control the creation of new currency units. Bitcoin and Ethereum are the most popular cryptocurrencies. Since cryptocurrencies are unregulated, they are also considered to be virtual currencies. (See also, ‘Bitcoin Is Like Regular Currency’: St. Louis Fed.)

Essentially, both virtual currencies and cryptocurrencies are considered as forms of digital currencies.

 

Sources : http://www.investopedia.com/terms/d/digital-currency.asp

What is Bitcoin

Bitcoin is a cryptocurrency created in 2009. Marketplaces called “bitcoin exchanges” allow people to buy or sell bitcoins using different currencies.

Bitcoins is a new currency that was created in 2009 by an unknown person using the alias Satoshi Nakamoto. Transactions are made with no middle men – meaning, no banks! Bitcoin can be used to book hotels on Expedia, shop for furniture on Overstock and buy Xbox games. But much of the hype is about getting rich by trading it. The price of bitcoin skyrocketed into the thousands in 2017.

Bitcoins
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Whats is Bitcoins can be used to buy merchandise anonymously. In addition, international payments are easy and cheap because bitcoins are not tied to any country or subject to regulation. Small businesses may like them because there are no credit card fees. Some people just buy bitcoins as an investment, hoping that they’ll go up in value.

Buying bitcoins

Buy on an Exchange

Many marketplaces called “bitcoin exchanges” allow people to buy or sell bitcoins using different currencies. Coinbase is a leading exchange, along with Bitstamp and Bitfinex. But security can be a concern: bitcoins worth tens of millions of dollars were stolen from Bitfinex when it was hacked in 2016.

Transfers

People can send bitcoins to each other using mobile apps or their computers. It’s similar to sending cash digitally.

Mining

People compete to “mine” bitcoins using computers to solve complex math puzzles. This is how bitcoins are created. Currently, a winner is rewarded with 12.5 bitcoins roughly every 10 minutes.

Bitcoin Wallet

Bitcoins are stored in a Digital Wallet which exists either in the cloud or on a user’s computer. The wallet is a kind of virtual bank account that allows users to send or receive bitcoins, pay for goods or save their money. Unlike Bank accounts, bitcoin wallets are insured by the FDIC

The anonymity of bitcoin

Though each bitcoin transaction is recorded in a public log, names of buyers and sellers are never revealed – only their wallet IDs. While that keeps bitcoin users’ transactions private, it also lets them buy or sell anything without easily tracing it back to them. That’s why it has become the currency of choice for people online buying drugs or other illicit activities.

Bitcoin’s future in question

No one knows what will become of bitcoin. It is mostly unregulated, but some countries like Japan, China and Australia have begun weighing regulations. Governments are concerned about taxation and their lack of control over the currency.

Couple Arrested In Bitcoin Theft, 1 Suspect Still At-Large

SARATOGA (CBS SF) – Two suspects were arrested and Santa Clara County sheriff’s deputies were searching for a third after the group allegedly stole a computer that contained Bitcoin worth $10,000.

A family hired the three suspects to help them move out of their home in the 20700 block of Fourth Street on Saturday, according to sheriff’s officials. They agreed on a rate for moving their belongings into a truck, but the suspects allegedly demanded a higher rate about two hours into the move.

Couple Arrested In Bitcoin Theft
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The family refused to pay more for the services, sheriff’s officials said, and the suspects proceeded to “compensate themselves” by allegedly taking a TV and an Apple iMac computer by force.

The computer was valued at $3,000 and the victims told deputies that the computer contained Bitcoin worth about $10,000, according to sheriff’s officials. Bitcoin is a form of “cryptocurrency” used in virtual space.

The suspects allegedly got away in a gray two-door Lexus SC400. Deputies received video footage of the robbery and identified two of the suspects as Yessica Barajas, 18, of San Jose and Welbar Quintanilla, 24, also of San Jose.

Deputies went to Barajas’ home and searched it for the stolen objects but were unable to find them. Barajas was arrested on suspicion of robbery and conspiracy and booked in Santa Clara County Jail.

Deputies also searched Quintanilla’s home, but were unable to find the TV and computer. He was arrested on suspicion of robbery and a parole violation.

Deputies have not yet identified or located the third suspect.

Anyone with any information about the robbery is asked to call the Sheriff’s Office at (408) 808-4431.

“Electronic personal devices have become wallets, capable of holding infinite amounts of currency,” Sheriff Laurie Smith said in a statement. “The public should take the necessary steps to safeguard their virtual property because it is vulnerable like physical property.”

sources from http://wordpress.com

Electronic Money (eMoney)

Electronic Money

Electronic money or e-money is broadly defined as an electronic store of monetary value on a technical device that may be widely used for making payments to entities other than the e-money issuer. The device acts as a prepaid bearer instrument which does not necessarily involve bank accounts in transactions.

Electronic Money
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E-money products can be hardware-based or software-based, depending on the technology used to store the monetary value.

Hardware-based products

In the case of hardware-based products, the purchasing power resides in a personal physical device, such as a chip card, with hardware-based security features. Monetary values are typically transferred by means of device readers that do not need real-time network connectivity to a remote server.

Software-based products

Software-based products employ specialised software that functions on common personal devices such as personal computers or tablets. To enable the transfer of monetary values, the personal device typically needs to establish an online connection with a remote server that controls the use of the purchasing power. Schemes mixing both hardware and software-based features also exist.

ECB statistics on electronic money do not distinguish between hardware-based and software-based e-money.

Directive 2009/110/EC of the European Parliament and Council of 16 September 2009 on the taking up, pursuit and prudential supervision of the business of electronic money institutions established a new legal basis for e-money issuance in the European Union.

Article 2(1) of the Directive defines an “electronic money institution” as a legal person that has been granted authorisation to issue e-money. Furthermore, according to Article 2(2) of the Directive, “electronic money” means “electronically, including magnetically, stored monetary value as represented by a claim on the issuer which is issued on receipt of funds for the purpose of making payment transactions […], and which is accepted by a natural or legal person other than the electronic money issuer”. Credit institutions, as well as other financial and non-financial institutions, may issue e-money.

In order to align the ECB’s monetary financial institution (MFI) balance sheet statistics with the new definitions, Regulation ECB/2008/32 was amended by Regulation ECB/2011/12 and Guideline ECB/2007/9 by Guideline ECB/2011/13. Data complying with the revised reporting scheme are available as of the reporting period December 2011.

Data on e-money issued by euro area MFIs start in September 1997, while national data may start later depending on their date of availability. As a consequence, as statistical developments are affected by changes in the reporting population, statistical developments of euro area aggregates are affected by changes in the number of euro area countries for which e-money statistics are available.

Aggregated total issuance by euro area MFIs is available on a monthly basis, while national issuance by all electronic money institutions is available only annually.

The amount outstanding of e-money issued by euro area MFIs is included in the item “overnight deposits” on the MFI balance sheet.

Changing the World Through Peer-to-Peer Electronic Cash

Developer Gabriel Cardona was personally recruited to fast track development of Bitcoin Cash (BCH). Open source, full featured development kit, Bitbox, his creation, has taken the community by storm, and it is now part of the Bitcoin.com developer universe. Money, Mr. Cardona likes to say, is critical to the human condition. And BCH and its blockchain are enabling financial sovereignty in a way which, he believes, is unique in history.

Developer Gabriel Cardona Seeks a Path to Change the World Through Bitcoin Cash

This week, developer Gabriel Cardona was guest for a full hour on the Vin Armani Show. At about the one hour and eight minute mark, Mr. Cardona began to lay out reasoning behind the burst of innovation in development on the Bitcoin Cash blockchain.

Gabriel Cardona
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With hotshot initial coin offerings ringing-in billions, venture capitalists pouring money into project after project, and nearly all crypto talk dominated by speculative price analysis, idealism is hardly ever mentioned. There is almost a sense of innocence lost, having given way to strange corporate realism. When idealism is employed, derision and condescension aren’t too far behind nowadays. Mr. Cardona, however, champions bitcoin cash as “the soundest money the world has ever known. As a developer you can make it available to all people, whatever their age, gender, nationality or financial status,” he explained to Vin Armani, founder of Coin Text, the text messaging way to send BCH without an internet connection.

Mr. Cardona describes himself, 37, as a decidedly different person professionally, “a whole different frequency” only ten years ago. He spent most of his twenties vagabonding, playing music, traveling. Becoming a father around this time sobered him to clearer thoughts about a career going forward. A chance community college course led to his first project, then another, and another. For whatever reason, the web has always resonated with him. The ubiquity, the chance to be impactful on a large scale, appealed to Mr. Cardona professionally.

That professional path eventually led him to code for Walmart, Target, Taco Bell, and to Triple A — all web development projects. Somewhere along the line, 2012 ish, he discovered bitcoin and Gavin Andresen’s Faucet, where Mr. Cardona received five bitcoin. This kept him interested as he went about his regular career. In fact, he’d put the idea aside for years while keeping an ear and eye to key hacker news outlets. When talk about a fork in mid 2017 was heating up, Mr. Cardona described the inevitable as not optimum, certainly, but ultimately the right path when two factions just cannot agree.

The Revelation

From there he deduced one of the chains would eventually have an innovation explosion. When he was able to access bitcoin cash (BCH) coins, and he started to use them, it suddenly grabbed him completely: this is bitcoin, the tech that made a great many wonderful people fall in love. Still, he wasn’t yet convinced enough to enter the space in any permanent way. In fact, he took to the burgeoning 3D printer industry. Upon looking more deeply into smart contracts, he encountered Ethereum’s Truffle Suite. He describes this as a revelation.

It was shocking. Nothing like a good framework, a suite of abstractions, allowing developers to work ten times faster existed for Bitcoin. There wasn’t anything like it in the BCH space. With that realization, he coincidentally took some time off to try and “have the vision.” It’s this kind of talk that makes Mr. Cardona so compelling. Devs are not known for their ability to communicate vulnerabilities, to be, well, human. Mr. Cardona has that in spades.

That in-touch-ness no doubt sets him apart. He’s humble enough to know he needs mentors, guides, to help check himself along the way. Enter Pete Flint, 44, a British entrepreneur now based in San Francisco at the venture capital firm, NFX, where he is a managing partner. Mr. Fint is perhaps best known for having been founder and CEO of Trulia, which he eventually sold for something like a billion dollars. Mr. Cardona worked there for a spell, and the two hit it off. On his break to “have the vision,” he met up again with Mr. Flint.

That was half a year ago. Mr. Cardona credits Mr. Flint with urging him to move from hardware to software, and onto to BCH solutions. That very night Mr. Cardona began working on a library that morphed into framework, and has now become the solution platform, Bitbox. An immediate success, having been downloaded tens of thousands of times in a very short period, Bitbox got the attention of nearly everyone in The Know. Two months ago he joined Bitcoin.com to put Bitbox into full-on practice. For the un-technical, Bitbox assumes many functions every dev needs, thus speeding up a project’s process, allowing innovation to come at much faster paces. The implications for its power are simply mind-blowing. As Vin Armani commented during the interview, had something like Bitbox been available as little as three years ago for Bitcoin, everything would’ve changed. That it’s now an intimate part of BCH means the future of money is on a Cardona path.

Source : https://news.bitcoin.com/bitcoins-return-to-innovation-changing-the-world-through-peer-to-peer-electronic-cash/