Dangers and Opportunities of Replacing Money with Digital Currency

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Several decades ago, money used to be handled a lot differently than it is today. For example, nobody paid for practically everything with a debit card, because they simply didn’t exist. Even credit cards were not used in the same way as they are today. When a credit card was used, it was placed on some clumsy looking machine with a piece of carbon paper that then imprinted that credit card information into the paper itself. It took days and sometimes even weeks for a credit card transaction to be completed. Today, cards are swiped and everything is instantaneous. In addition, most people chose not to have credit cards and instead, either paid with cash or simply wrote a check. Many vendors even head checkbooks sitting on top of their counters, often from several different banks in the area. This was so customers could merely choose the right bank and then write a check so they wouldn’t have to carry their own checks with them.

The Digital World

Today, things could not be more different. As the digital world encompasses every aspect of life, many people are not even using debit cards or credit cards to be swiped any longer. Instead, they really have a digital wallet, often one that is stored on their smartphone. They are able to pay for purchases by syncing their smartphone with a device at the vendor’s location and then having that money immediately deducted from their digital account. This is something that many people would have never believed could be possible only twenty or thirty years ago. However, this new digital world is essentially developing its own kind of currency, one that cannot be touched or felt, but is very much real.

Bitcoin

Without a doubt, one of the most popular digital currencies in existence is Bitcoin. This is a system that was first thought of in 2007 and a patent for it was filed one year later. It was registered just a few months after that and in January 2009, the first Bitcoin transaction occurred. Since that time, it has been taking the world by storm and today, it is used not only to purchase virtual items in cyberspace but also to make very real purchases of items that will then be delivered to a physical location.

Imitation Is Flattery

Since Bitcoin’s arrival, there have been numerous other digital currencies that have tried to copy it, although none of them have actually reached its level of popularity as of yet. However, the most important thing here is to note that there are so many digital currency systems that are currently available. They say that imitation is the sincerest form of flattery and if that is true, there are plenty of individuals that actually envy Bitcoin because there are a lot of people that are trying to imitate the same business platform that they have been using successfully for several years now.

An Ever-Changing World

Does that mean that digital currency is one day going to take over traditional forms of currency? Is it possible that debit cards, credit cards, checks, and cash will no longer be used in favor of something that only exists in cyberspace? The truth is, this is already happening. Digital currency has been around for a number of years now, and there is no sign that it is going to go away. The truth of the matter is that people are changing the way they choose to pay for items and services and for the most part, they are choosing to utilize digital currency along with digital wallets attached to their smartphones because it is a matter of convenience. It cuts down on the number of things they have to carry and keep up with. This is a major advantage for individuals who have grown up in the digital age, but there are some very real concerns associated with it as well.

Potential Problems

Things that exist in cyberspace have a way of disappearing from time to time. Imagine what would happen to someone who had all of their money in a digital wallet that was then hacked by someone else, effectively draining all of the money from their account. Things like this can sometimes be hard to trace, and that means that a person who decides to pay for things in this fashion might be running the risk of losing some of their money, especially when they get out from under the protection of the banks. Obviously, this is something that is still in its infancy, so there will be growing pains, so to speak. With that being said, it doesn’t make the situation any easier to digest for anyone that happens to be a victim of those growing pains.

Conclusion

In the end, it all comes down to a matter of security. How can digital currency be made more secure so that it is harder for hackers to get their hands on it in the first place? What safeguards need to be put in place to protect consumers? Until digital currency is protected by banks, it may be difficult to ensure that consumers are adequately protected. However, all of these changes have occurred as a direct result of a changing society. Eventually, the technology will catch up but it can be a painful lesson for some individuals until that happens.

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