Digital currency
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.[1]
It is differed 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.[2] 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.
Cryptocurrencies, such as Bitcoin, Litecoin and PPCoin, are a form of digital currency which relies on cryptography, as well as proof-of-work schemes, in order to create, distribute and maintain the currency. Cryptocurrencies are usually peer-to-peer and decentralized.
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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".[3]
List of digital currencies [edit]
This does not list all cryptocurrencies, for a full list, see List of digital currencies.
Non-Cryptocurrencies [edit]
| Currency | Symbol | 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[4] | No | James Orlin Grabbe | DMT Guide | N/A | |||
| Ripple | XRP | 2005 | jed/OpenCoin | Yes | OpenCoin Inc. | ripple.com | N/A | Currently a closed source, centralized exchange system, though it's developers claim this will change. |
| Ven | 2007 | Yes | Hub Culture | ven.vc | ~$2 million USD[citation needed] |
Major Cryptocurrencies [edit]
| Currency | Symbol | Year Est. | Founder | Active | Ledger | Website | Value of money supply (May 2013) | Bitcoin-based | Note |
|---|---|---|---|---|---|---|---|---|---|
| Bitcoin | BTC | 2009 | Satoshi Nakamoto | Yes[5] | P2P network | bitcoin.org | ~$1 billion USD[6][7] | Yes | Decentralized ledger currency, SHA-256 proof-of-work |
| Litecoin | LTC | 2011 | Coblee | Yes[8] | P2P network | litecoin.org | ~$38 million USD[7] | Yes | Scrypt proof-of-work |
| Namecoin | NMC | 2011 | Vinced | Yes | P2P network | dot-bit.org | ~$4.5 million USD[9] | Yes | Decentralized DNS, SHA-256 proof-of-work |
| PPCoin | PPC | 2012 | Sunny King | Yes[10] | P2P network | ppcoin.org | ~$4 million USD[7] | Yes | SHA-256 proof-of-work/proof-of-stake |
Criticism [edit]
Many of these currencies have not yet seen widespread usage. Bitcoin developer Gavin Andresen has expressed the concern that the bitcoin based systems may be scams.
See also [edit]
Notes [edit]
- ^ Other names include: Virtual currency, Payment Scheme, Virtual Medium of Exchange, etc.
References [edit]
- ^ 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."
- ^ "FIN-2013-G001 : Application of FinCEN's Regulations to Persons Administering, Exchanging, or Using Virtual Currencies". Financial Crimes Enforcement Network. March 18, 2013.
- ^ "Employment Opportunites in The Digital Monetary Trust".
- ^ "Bitcoin Exchange Rate in USD". Retrieved 5 May 2013.
- ^ "Market Capitalization". Blockchain.info. Retrieved 21 March 2013.
- ^ a b c Simonite, Tom. "Bitcoin Isn’t the Only Cryptocurrency in Town". MIT Technology Review. Retrieved 5 May 2013.
- ^ "Litecoin Exchange Rate in USD". Retrieved 1 March 2013.
- ^ Cryptocoin Mining Information, 18-05-2013
- ^ "PPCoin Exchange Rate in BTC". BTC-E.
External links [edit]
- Virtual Currency Schemes, European Central Bank, Oct. 2012.
- List of alternative cryptocurrencies Bitcoin Wiki (accessed 6 Apr 2013)
- coins2coins.com - Realtime Conversion Rates
