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".
List of digital 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.|
- Many of these currencies have not yet seen widespread usage, and may not be easily used or exchanged.
- Some people, such as bitcoin developer Gavin Andresen, have expressed concern that the other cryptocurrencies may be scams.
- Some have expressed concern that the smaller cryptocurrencies are pump and dump schemes.
- The non-cryptocurrencies are all centralized, so could be shut down by a government at any time.
- Other names include: Payment Scheme, Virtual Medium of Exchange, etc.
- Phishers Claim to Ensure Security for Digital Currency Users, Symantec, 28-06-2013
- Melik, James. "Digital currency: Brave new world or criminal haven?". BBC News. Retrieved 28 February 2013.
- 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."
- Wary of Bitcoin? A guide to some other cryptocurrencies, ars technica, 26-05-2013
- What does Cryptocurrency mean?, technopedia, 01-07-2013
- California dreaming: The CoinDesk Weekly Review, Coindesk, 26-05-2013
- From your wallet to Google Wallet: your digital payment options, The Conversation, 26-05-2013
- About, The Cryptocurrency Legal Advocacy Group, 01-07-2013
- "FIN-2013-G001 : Application of FinCEN's Regulations to Persons Administering, Exchanging, or Using Virtual Currencies". Financial Crimes Enforcement Network. 18 March 2013.
- "Employment Opportunities in The Digital Monetary Trust".
- "Bitcoin Exchange Rate in USD". Retrieved 5 May 2013.
- "Market Capitalization". Blockchain.info. Retrieved 21 March 2013.
- Simonite, Tom. "Bitcoin Isn’t the Only Cryptocurrency in Town". MIT Technology Review. Retrieved 5 May 2013.
- "Crypto-Currency Market Capitalizations". Retrieved 26 June 2013.
- "Litecoin Exchange Rate in USD". Retrieved 1 March 2013.
- "PPCoin Exchange Rate in BTC". BTC-E.
- Cryptocoin Mining Information, 18-05-2013
- Andresen, Gavin https://bitcointalk.org/index.php?topic=42465.0 (accessed 6 Apr 2013)