Cyber Currency, Electronic Money, Virtual Currencies, Digital Currencies: A Change in the Concept of Money
This paragraph aims to shed light on the various differences in the concepts of electronic money, cyber currency (or cryptocurrency), virtual currency, digital currency.
Cyber currency and electronic money
Bitcoin – it does not fall into the category of electronic money, but of cyber money (or cryptocurrency). Electronic money is, in fact, an electronic substitute for coins and banknotes, intended to make payments of limited amount, by transferring funds from person to person in a scriptural way, but without physical support. It differs from other current payment systems in that, unlike traditional payment cards, the monetary value is directly included in the virtual object, so payment does not require any account-to-account registration and possession of money electronics does not require the user to hold a bank account. As an electronic payment instrument that incorporates a monetary value equivalent to the amount of funds received by the issuer, electronic money can be stored both on a microchip card and on the memory of an electronic device, and is accepted as a means of payment by subjects other than the issuer. Due to its characteristics, it can be considered an alternative payment instrument to cash.
The bitcoin missing instead of connecting with real money and this implies that:
This currency depends on a specific exchange rate not linked to a traditional currency because it is linked to the simple relationship between supply and demand; the lack of a link to a traditional currency could make its conversion into real currency complex; control of money is left to private individuals.
Furthermore, while electronic money payment instruments are issued by banks and electronic money institutions, subject to considerable checks by the competent banking authorities (Bank of Italy, European Central Bank, European Banking Authority), this does not happen with reference to bitcoins . The same peculiarity relates to bitcoin transactions, which occur outside the banking channels.
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The first virtual currencies and the difference with digital currencies
The birth of the first virtual coins is undoubtedly linked to the second phase of development and diffusion of the Internet (web 2.0), dating back to around 2005 and characterized by a strong increase in the interaction between the site and the user, with the transition from an attitude passive to an active one of the latter. The users of the web have themselves become authors of the web through chats, blogs, forums, wikis; the sharing of information has become more efficient through peer to peer tools or with multimedia content distribution systems such as Youtube.
This evolution of the web has led to the creation of real interactive “virtual worlds” such as MMPORG (” Massive Multiplayer Online Role-Playing “), role playing games carried out on the net simultaneously by several people. Among the most famous are undoubtedly remembered “War of Warcfraft” and “Second Life “. The progress of these “worlds” has contributed to the development of real virtual economies and social systems. From ” Second-life ” virtual currencies called ” Linden Dollar ” have arisen , such as to found a real economy in the virtual world, create markets and sites for the exchange of these currencies and a metavalute ( Open Metaverse Currency) used to buy or sell goods or services in virtual contexts, accepted by different virtual worlds (Capaccioli, 2015). The virtual currencies partly reflect the philosophy of complementary currencies, meaning by these the switching tools with which it is possible to exchange goods and services alongside the official money (compared to which they are complementary) (Capaccioli, 2015). These types of currency are widespread all over the world but particularly in Great Britain, where the best known example is that of the Brixton pound, a complementary currency circulating within the Brixton community in south east London (an area known for its cultural liveliness and multi-ethnic composition of the population, with significant and dating back to the presence of immigrants from the West Indies). These types of currency are not legal tender and are accepted on a voluntary basis.
