Digital currency

Digital currency
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A digital currency ( digital currency , electronic money, electronic currency, digital
money, electronic money (meaning different from Japanese English electronic
money ), electronic currency) is a currency , money, or money. It refers to all assets
such as , and is mainly managed, stored, and exchanged mainly over the Internet in
digital computer systems. Types of digital currencies include cryptocurrencies ,
virtual currencies , and central bank-issued digital currencies . Digital currencies may
be stored and recorded in distributed databases on the Internet , centralized
database systems such as companies and banks, digital files , or physical cards.
Digital currencies have the same characteristics as traditional currencies, but
generally have no physical form, unlike currencies with printed banknotes or coins.
This feature allows for near-instantaneous transactions on the Internet and can
reduce costs associated with the distribution of banknotes and coins. Generally,
currencies not issued by government agencies are not considered fiat currencies
and can be assigned ownership without being bound by the jurisdiction of a country
or the like .
This type of currency may be used to purchase physical goods or services, or it may
be restricted to a particular community, such as in an online game.
Digital currencies are either centralized, controlled by a single point of control and
supply (such as central banks and businesses), or decentralized, with
pre-determined or democratically agreed methods of control. Be.
History
In 1983, a paper was published by David Sean introducing the idea of

"digital cash .
" [4] In 1990, he founded his electronic cash company, DigiCash, in Amsterdam and

commercialized the ideas he gained through his research . The company went
bankrupt in 1998. In 1999, Sean left the company.
The origin of digital currency dates back to the dot-com bubble period in the 1990s .
One of the earliest is the gold-backed E-gold , which was founded in 1996 .
In 1997, Coca-Cola introduced a vending machine that could be purchased by
"mobile payment" .
Then, in 1998, PayPal was launched .
Another known Liberty Reserve was founded in 2006 . It offered users a free
exchange of dollars or euros for Liberty Reserve dollars and Liberty Reserve euros,
with a 1% commission . The service was "centrally managed" and was notorious for
being used for money laundering , forcing it to be closed by the United States
government . Other systems, such as e-gold, followed suit, but were used by
criminals and were investigated by US authorities in 2005 .
In early 2005, a product-based digital currency called "Q Coin" or "QQ Coin" that was
accepted on Tencent QQ 's message platform appeared. Q-coins were effectively
used in China, which was affected by speculative destabilization of the yuan .
With the advent of Bitcoin around 2008-2009, the number of people who have
expectations for cryptocurrency type digital currencies has increased, and the
number of people who use digital currencies has increased
Types of digital currencies
Cryptocurrency
Bitcoin is a type of digital currency and can be said to be a virtual currency, but
Bitcoin and similar digital currencies are based on cryptographic algorithms, and
these types of virtual currencies are called cryptocurrencies.
Cryptocurrency is a type of digital currency, and is a digital asset made up of a P2P
network and decentralization (decentralization) that connects asset transfer
information with a blockchain like a chain with a digital signature by cryptography .
be. For some, the proof of work or proof of stake creates and manages the currency.
Cryptocurrencies enable the decentralization of currency systems. In the blockchain
implementation, the digital ledger system or recording system uses cryptography to
edit multiple distributed database entries. The first and most prominent system in
history is Bitcoin , a cryptographically based p2p e-commerce system.
Digital currency issued by the central bank
See " Central Bank Digital Currency " for details.
Digital and traditional currencies
Most traditional money supplies are computer-managed deposit currencies . It is also
possible to regard this as a digital currency. It can be said that the accelerating
cashless society is that all currencies are being digitized (digitized), but it is not so
visible to the eye .
System type
Central management type

An electronic payment system that is issued and managed by central banks and
companies, and is centrally managed by businesses, such as credit cards and debit
cards.
Distributed
Among digital currencies, it refers to the implementation of currency issuance,
ownership recording, transfer approval confirmation, and record storage as a
decentralized system. Bitcoin , a cryptocurrency , is a typical example .
Laws and regulations
It is hoped that this section will be revised .
Digital currencies raise challenges for central banks, financial regulators, financial
authorities and statistical authorities.
Guidance by the US Treasury
On March 20, 2013, the Financial Crime Control Network provided guidance on how
the US Bank Secrecy Act should be applied to the creation, trading, and remittance
of cryptocurrencies by individuals...
Guidance by the United States Securities and Exchange Commission
In May 2014, the US Securities and Exchange Commission issued a "warning about
the dangers of Bitcoin and other cryptocurrencies .
New York State Regulations
In June 2014, the New York State Financial Supervisory Authority submitted the
most comprehensive proposed regulation on cryptocurrencies to date. This is
commonly referred to as the Bit License [ 19 ] . Unlike US regulators, the opinions of
Bitcoin supporters and financial industry workers were gathered through public
hearings, with a comment period for changes until October 21, 2014. A proposal
released by a spokeswoman for the supervisory bureau said, "... sought to strike an

appropriate balance that helps protect consumers and root out illegal." activity " [20] .
It was criticized by the minority for a more established system and by the Bitcoin
exchange in China for "too widespread application outside the United States .
Recruitment by the government
As of 2016, more than 24 countries have invested in distributed ledger technology
(DLT), totaling $ 1.4 billion. In addition, more than 90 central banks are working on
discussions on his DLT, and central banks are also issuing digital currencies .
Ecuador
The Ecuadorian National Assembly has given the government permission to make
payments using electronic currencies and has proposed the creation of a national
digital currency. "E-commerce will stimulate the economy, and it can attract more
Ecuadorian people without checking accounts, savings accounts, or credit cards.
Electronic currency is the Ecuadorian Central Bank," a parliamentary vote said. "
Electronic money will stimulate the economy; it will be possible to attract more
Ecuadorian citizens, especially those who do not have checking or savings accounts
and credit cards alone. The electronic currency will be It says "backed by the assets
of the Central Bank of Ecuador . In December 2015, Systema de Dinero Electronico
(electronic money system) was launched, making Ecuador the first country to
operate an electronic payment system .
Germany
The Deutsche Bundesbank is testing a functional prototype of securities settlement
and centrally managed digital coin transfers based on blockchain technology .
Netherlands
The Central Bank of the Netherlands is testing a "DNBCoin" Bitcoin-based currency .
South Korea

South Korea is planning a national digital currency using blockchain . Yim
Jong-yong, chairman of the Financial Services Commission of the Republic of Korea,
said the committee "Lay the systemic groundwork for the spread of digital currency" .
South Korea has already announced that it will abolish coins by 2020.
Sweden
Sweden is in the process of replacing all banknotes and most coins by mid-2017.
However, new Swedish krona banknotes and coins are expected to circulate only
about half of the 2007 peak of 12,494 krona per capita. As a central bank, the
Sveriges Riks is planning to begin discussions to issue "not to replace cash, but to
act as complement to it . Deputy Director Cecilia Skingsley said cash will continue to
be depleted in Sweden at an accelerating rate, and while it is easy to get cash,
especially in rural areas, it is currently very difficult to deposit it in a bank account. No
decision has been made to issue an "e-Krona". "The first question is whether e-crona
should be booked in the account, or else it should take some form of digitally
interactable unit that can exist independently of the account, roughly like cash. " The
first question is whether e-krona should be booked in accounts or whether the
ekrona should be some form of digitally transferable unit that does not need an
underlying account structure, roughly like cash."It has said. "Another important
question is whether the national bank should issue e-crona directly to the public or
through the bank as it does with current banknotes and coins." "Another important
question is whether the Riksbank should issue e-krona directly to the general public
or go via the banks, as we do now with banknotes and coins. " There is also the
question of whether the interest rate should be positive, negative, or zero.
Switzerland
In 2016, it was the first local government to accept payment of utility bills in digital
currency. Bitcoin was added as a small payment method up to CHF 200 on a trial
basis and in an attempt to make Zug an advanced region of future technology . To
reduce risk, authorities will immediately convert to Swiss currency upon receipt of
Bitcoin . The Swiss National Railways and the Swiss Federal Railways sell Bitcoin at
ticket machines .
United Kingdom
The UK Government's chief scientific adviser advised the Prime Minister and
Parliament to consider using blockchain-based digital currencies . The chief
economist of the Bank of England , the central bank of the United Kingdom, has
recommended the abolition of banknotes. The Bank of England is also interested in
Bitcoin and in 2016 launched a multi-year research program investigating the
implications of central banks issuing digital currencies. The Bank of England has
published several research papers on this subject. There are also suggestions that
the economic benefits of issuing digital currencies on decentralized ledgers can
increase domestic economic output by 3 percent. The Bank of England wants the
next core software infrastructure to be compatible with distributed ledgers.

Ukraine
The National Bank of Ukraine is considering creating a blockchain-based national
cryptocurrency issuance, distribution and supply system . It has also been
announced that blockchain will be part of a national project called the "cashless
economy."
Hard Digital Currency and Soft Digital Currency
"Hard electronic currency" refers to those that do not have dispute resolution or
refund functions. In other words, it is similar to cash in that it only supports
irreversible transactions. Cancellation of a transaction, whether due to legal
negligence, fraudulent use, or a retailer's failure to supply goods, is difficult, if not
impossible. Such a setting has the advantage that the operating cost of the
electronic currency system can be significantly reduced by not having a dispute
resolution mechanism for settlement. In addition, electronic currency transactions will
be finalized instantly and the recipient will have immediate access to the funds. This
means that the use of hard electronic currencies is more similar to cash transactions.
Examples include Bitcoin , KlickEx , and Western Union .
The "soft electronic currency" allows the cancellation of payments in the event of
fraud or dispute, for example. Cancelable payment methods generally have a
"clearing time" of 72 hours or more. Examples include PayPal and credit cards .
Hard currencies can also be "softened" by using third-party institutions and escrow
services.
Criticism
Many of the existing digital currencies have not yet become widespread, and their
use and trading are difficult. Banks generally do not handle digital currencies .

Cryptocurrencies are extremely volatile and have the potential to spread rumors, so
there are concerns that they are extremely risky. Regulators in some countries have
warned against use, and some have embarked on effective regulation to abandon
users . All non-cryptocurrencies are centrally managed. In this case, there is always
the risk of closure or abolition by the government . A more anonymous currency
would be more attractive to criminals, regardless of the creator's intentions. Forbes
reporter Tim Worstall argues that the value of Bitcoin is largely due to speculative
transactions . Bitcoin has also been criticized for its energetically inefficient
SHA-256-based proof of work system .

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