A brief history of digital currency
From the era of barter economy, metal and coins to gold and silver, continuing to the modern monetary systems and checks, and ending with the latest developments in the global currency, such as the introduction of cryptocurrency like Bitcoin, centuries have passed.Each type of money plays a crucial role in transactional activities in some period of time.As human society and markets developed in particular, there was a need for more sophisticated instruments for the exchange of goods.In this regard, the introduction of cryptocurrency revolutionized the international payment system in a size that only a few years ago was unimaginable.The cryptocurrency is a digital or virtual currency that uses cryptography for security.Cryptocurrency is hard to forge because of this security feature.The determining characteristic of cryptocurrency, and probably the most attractive, is its organic nature as the fact that it is not issued by any central authority.Cryptocurrencies have their own advantages and disadvantages.The main benefits of using cryptocurrencies are that they transfer the funds more easily between two parties in the transaction.These transactions are facilitated through the use of public and private keys for security purposes.These fund transfers are carried out with minimal processing costs, allowing users to avoid the large fees for online transactions charged by most banks.
There are two reasons for the emergence of electronic money and digital currencies.The first, according to the Austrian School of Economic Analysis money is a “social institution”subject to the already initiated institutional change and is interpreted as a consequence of a spontaneous evolution that should overcome the shortcomings of the swap and the double coincidence of desires.Today e-money is the last stage of this development and represents an additional degree of institutional change.
Their main role is to support online e-commerce, enable transactions, reduce their costs,or replace the payment of money and coins in retail.The second reason for the emergence of e-money is the information revolution, which is characterized by the integration of electronic information processing and telecommunication technologies, which reduces the geographical differences by means of which information can be transmitted to the whole world.The information revolution has changed the financial sector, making payment modes more secure and more efficient, giving an additional reason for the emergence of new monetary innovations.
Unlike the information revolution, the emergence of e-money is a new way of processing information for transferring purchasing power.Many financial innovations are not a new form of money, but a different way of using existing money in transactions.Regardless of the consequences of the mentioned technological development, the nature of the money is still identical i.e.money serves as a means of exchange, as an asset and as a value.The nature of the money will never change, so the money will remain only an intermediary in the exchange of goods and services.E-Money card is a different payment method that allows electronic transfer of the value from the card to the terminal or from the card in the wallet, both in real time and through networks.It is considered that e-money is the most important achievement that transfers the predetermined monetary value so it can be used for more transactions of lesser value.E-Pocket consists of a microcomputer that contains information about the monetary value that can be used.It is a higher degree of technological development compared to magnetic tape cards.Also, the e-pouch is more secure, which can reduce deception because cards with a chip can be more difficult to abuse than magnetic tape cards.