Currency refers to electronic currencies stored electronically in banks and is one in three forms of electronic money. While paper money is still used worldwide, up to 80% of the world's currency is stored through banks electronically. Since its inception, it has grown from an alternative to conducting business to a primary form of electronic commerce, and only seems to continue to grow.
The first digital currency was created during the first Internet bubble in the early 2000s. It was named E-Gold and was founded in 1996 by Gold & Sliver Reserve Inc, which allowed users to transfer small amounts of gold values electronically. In the spring of 2000, it became the first electronic money to offer an exchange service for other currencies.
Launched two years before PayPal, in 2004, it had more than a million accounts. Another service from 2006, Liberty Reserve, allowed its customers to convert euros or dollars into Liberty Reserve money and then again. Unfortunately, shortly after, the U.S. government revealed that criminals were using these websites and that they were both closed.
The difference between virtual, digital and cryptographic currencies
As more and more banks allow an increase in electronic banking services, virtual currencies function as an independent currency whose value is created by its original funder. However, the most famous virtual currency in the world, Bitcoin, does not meet this specification, rather encompassing aspects of the three forms of electronic money.
Digital currency differs from it as money backed by an asset worth the real world equivalent of its value. Since most of the money in the world is stored in bank computers, it can be said that most of the world's currency is now digital.
Cryptocurrencies refer to forms of electronic money whose transitions are encrypted. Using blockchains to store data, they effectively bind together and act as registers that users can use to keep a consistent record of the data. Due to the variety of ways in which its price can be effected, its value often varies. Although cryptocurrencies have a certain degree of anonymity, some are still required by law to disclose the identity of their users.
The future of transactions
With more banks turning to digital currencies as the primary form of electronic record keeping and the growing emergence of a wide variety of virtual and crypto currencies, it can be said that the future of transactions in the world will be set to be done electronically. In perhaps a hundred years, paper money could be practically a thing of the past.