Digital currency

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Digital currency, among its various names,[note 1] is electronic money that acts as alternative currency.[1] Currently, alternative digital currencies are not produced by government-endorsed central banks nor necessarily backed by national currency.[2]

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.[3] 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.

Cryptocurrency[edit]

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.[4][5] Cryptocurrencies are peer-to-peer and decentralized, and are currently all based on the first cryptocurrency, Bitcoin.[5][4][6][7][8]

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".[9]

List of digital currencies[edit]

For a full list of digital currencies, see list of digital currencies.

Non-cryptocurrencies[edit]

CurrencyCodeYear Est.FounderActiveLedgerWebsiteMonetary base (April 2013)Note
e-gold1996NoGold & Silver Reserve Inc.e-gold.comN/A
Digital Monetary Trust1999[10]NoJames Orlin GrabbeDMT GuideN/A
RippleXRP2005Ripple LabsYesRipple Labsripple.comN/ACurrently a, centralized exchange system, though its developers claim this will change.
VenVEN2007YesHub Cultureven.vc~US$2 million[citation needed]

Major cryptocurrencies[edit]

Only major cryptocurrencies are listed here. For a full list of cryptocurrencies, see list of cryptocurrencies.

CurrencyCodeYear Est.FounderActiveLedgerWebsiteValue of money supply (November 2013)Bitcoin-basedNote
BitcoinBTC2009Satoshi NakamotoYes[11]P2P networkbitcoin.org~$4 billion USD[12][13][14]N/ADecentralized ledger currency, SHA-256 proof-of-work
LitecoinLTC2011CobleeYes[15]P2P networklitecoin.org~$100 million USD[13][14]YesScrypt proof-of-work
PeercoinPPC2012Sunny KingYes[16]P2P networkpeercoin.net~$14 million USD[13][14]YesSHA-256 proof-of-work/proof-of-stake, the proof-of-stake means that Peercoin has a small amount of inflation.
NamecoinNMC2011VincedYesP2P networkdot-bit.org~$4.5 million USD[17][14]YesSHA-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.

Criticism[edit]

See also[edit]

Notes[edit]

  1. ^ Other names include: Payment Scheme, Virtual Medium of Exchange, etc.

References[edit]

  1. ^ Phishers Claim to Ensure Security for Digital Currency Users, Symantec, 28-06-2013
  2. ^ Melik, James. "Digital currency: Brave new world or criminal haven?". BBC News. Retrieved 28 February 2013. 
  3. ^ Chen, Adrian. "The Underground Website Where You Can Buy Any Drug Imaginable". Gawker. Retrieved 28 February 2013. "He entered his address and paid the seller 50 Bitcoins—untraceable digital currency—worth around $150. Four days later the drugs, sent from Canada, arrived at his house." 
  4. ^ a b Wary of Bitcoin? A guide to some other cryptocurrencies, ars technica, 26-05-2013
  5. ^ a b What does Cryptocurrency mean?, technopedia, 01-07-2013
  6. ^ California dreaming: The CoinDesk Weekly Review, Coindesk, 26-05-2013
  7. ^ From your wallet to Google Wallet: your digital payment options, The Conversation, 26-05-2013
  8. ^ About, The Cryptocurrency Legal Advocacy Group, 01-07-2013
  9. ^ "FIN-2013-G001 : Application of FinCEN's Regulations to Persons Administering, Exchanging, or Using Virtual Currencies". Financial Crimes Enforcement Network. 18 March 2013. 
  10. ^ "Employment Opportunities in The Digital Monetary Trust". 
  11. ^ "Bitcoin Exchange Rate in USD". Retrieved 5 May 2013. 
  12. ^ "Market Capitalization". Blockchain.info. Retrieved 21 March 2013. 
  13. ^ a b c Simonite, Tom. "Bitcoin Isn’t the Only Cryptocurrency in Town". MIT Technology Review. Retrieved 5 May 2013. 
  14. ^ a b c d "Crypto-Currency Market Capitalizations". Retrieved 26 June 2013. 
  15. ^ "Litecoin Exchange Rate in USD". Retrieved 1 March 2013. 
  16. ^ "PPCoin Exchange Rate in BTC". BTC-E. 
  17. ^ Cryptocoin Mining Information, 18-05-2013
  18. ^ Andresen, Gavin https://bitcointalk.org/index.php?topic=42465.0 (accessed 6 Apr 2013)

External links[edit]