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Digital currency, among its various names,[note 1] is electronic money that acts as alternative currency. Currently, alternative digital currencies are not produced by government-endorsed central banks nor necessarily backed by national currency.
It differs from virtual money used in virtual economies due to its use in transactions with real goods and services; not being limited to circulation within online games. Earlier digital currencies are often backed by a promise to pay a set amount of gold or silver bullion in exchange for each of its units. Others float against whatever individuals are willing to exchange for it.
A cryptocurrency is a type of digital currency that relies on cryptography, usually alongside a proof-of-work scheme, in order to create and manage the currency. Cryptocurrencies are peer-to-peer and decentralized, and are currently all based on the first cryptocurrency, Bitcoin.
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".
For a full list of digital currencies, see list of digital currencies.
|Currency||Code||Year Est.||Founder||Active||Ledger||Website||Monetary base (April 2013)||Note|
|e-gold||1996||No||Gold & Silver Reserve Inc.||e-gold.com||N/A|
|Digital Monetary Trust||1999||No||James Orlin Grabbe||DMT Guide||N/A|
|Ripple||XRP||2005||Ripple Labs||Yes||Ripple Labs||ripple.com||N/A||Currently a, centralized exchange system, though its developers claim this will change.|
|Ven||VEN||2007||Yes||Hub Culture||ven.vc||~US$2 million|
Only major cryptocurrencies are listed here. For a full list of cryptocurrencies, see list of cryptocurrencies.
|Currency||Code||Year Est.||Founder||Active||Ledger||Website||Value of money supply (November 2013)||Bitcoin-based||Note|
|Bitcoin||BTC||2009||Satoshi Nakamoto||Yes||P2P network||bitcoin.org||~$4 billion USD||N/A||Decentralized ledger currency, SHA-256 proof-of-work|
|Litecoin||LTC||2011||Coblee||Yes||P2P network||litecoin.org||~$100 million USD||Yes||Scrypt proof-of-work|
|Peercoin||PPC||2012||Sunny King||Yes||P2P network||peercoin.net||~$14 million USD||Yes||SHA-256 proof-of-work/proof-of-stake, the proof-of-stake means that Peercoin has a small amount of inflation.|
|Namecoin||NMC||2011||Vinced||Yes||P2P network||dot-bit.org||~$4.5 million USD||Yes||SHA-256 proof-of-work. Namecoin is meant to act as a decentralized DNS, which would make internet censorship very difficult. Namecoin serves the .bit domain.|