Digital currency

From Wikipedia, the free encyclopedia - View original article

 
Jump to: navigation, search

Digital currency is a form of virtual currency or medium of exchange that is electronically created and stored. Some digital currencies, such as Bitcoin, are cryptocurrencies. Like traditional money these currencies may be used to buy physical goods and services but could also be restricted to certain communities such as for example for use inside an on-line game or social network.[1]

Digital versus traditional currency[edit]

Most of the traditional money supply is bank money held on computers. Therefore, even this could be considered 'digital' currency. However, this isn't the common usage of the term.

Value of digital currencies[edit]

The value of the currencies is largely derived from speculative trading but the fungibility of mainstream digital money is rising.[dubious ][2][3]

Cryptocurrency[edit]

Main article: Cryptocurrency

A cryptocurrency is a type of digital token that relies on cryptography for chaining together digital signatures of token transfers, peer-to-peer networking and decentralization. In some cases a proof-of-work scheme is used to create and manage the currency.[4][5][6][7] Many of the current cryptocurrencies are Bitcoin-based.

FinCen guidance[edit]

On 20 March 2013, the Financial Crimes Enforcement Network (FinCen), a bureau of the United States Department of the Treasury, issued a document providing interpretive guidance to clarify the applicability of the Bank Secrecy Act (BSA) to persons creating, exchanging and transmitting digital or "virtual currencies".[8]

Criticism[edit]

See also[edit]


References[edit]

  1. ^ "What is bitcoin?". CoinDesk. Retrieved 24 January 2014. 
  2. ^ Worstall, Tim. "Bitcoin Is More Like A Speculative Investment Than A Currency". Forbes. Retrieved 24 January 2014. 
  3. ^ "Watching the Rise of a Currency". Lets Talk Bitcoin. Retrieved 23 January 2014. 
  4. ^ Wary of Bitcoin? A guide to some other cryptocurrencies, ars technica, 26-05-2013
  5. ^ What does Cryptocurrency mean?, technopedia, 01-07-2013
  6. ^ From your wallet to Google Wallet: your digital payment options, The Conversation, 26-05-2013
  7. ^ Liu, Alec. "Beyond Bitcoin: A Guide to the Most Promising Cryptocurrencies". Vice Motherboard. Retrieved 2014-01-07. 
  8. ^ "FIN-2013-G001 : Application of FinCEN's Regulations to Persons Administering, Exchanging, or Using Virtual Currencies". Financial Crimes Enforcement Network. 18 March 2013. 
  9. ^ Banks Mostly Avoid Providing Bitcoin Services. Lenders Don't Share Investors' Enthusiasm for the Virtual-Currency Craze
  10. ^ moneyweek.com/bitcoin-and-cryptocurrencies-the-new-dotcom-stocks/
  11. ^ Tucker, Toph. "Bitcoin's Volatility Problem: Why Today's Selloff Won't Be the Last". Bloomberg BusinessWeek. Bloomberg. Retrieved 6 April 2014. 
  12. ^ O'Grady, Jason D. "A crypto-currency primer: Bitcoin vs. Litecoin". ZDNet. Retrieved 6 April 2014. 
  13. ^ Frances Schwartzkopff; Peter Levring (Dec 18, 2013). Bitcoins Spark Regulatory Crackdown as Denmark Drafts Rules. Bloomberg. Retrieved 6 April 2014. 
  14. ^ a b Zetter, Kim (9 June 2009). "Bullion and Bandits: The Improbable Rise and Fall of E-Gold". Wired. Retrieved 6 April 2014. 

External links[edit]