ONCE upon a time, you needed cash money to buy things.
Not any more. We are approaching a ‘‘ cashless society’’, where a card, code or pin number is all that’s needed to buy and sell tangible things.
Electronic money is now an everyday thing; from Electronic Funds Transfer ( EFT), to direct deposit, internet banking, credit cards and stocks.
But they’re all linked to real-world funds even if the funds are merely numbers in a bank account and money is evolving beyond that.
Virtual currency ( or in-game or inworld currency, depending on the environment) is used to purchase virtual goods within a variety of online communities, including social networking websites, virtual worlds and online gaming sites.
World of Warcraft gold made headlines when it was discovered that people were selling virtual property and virtual gold for real-world dollars.
More commonly used systems, such as PayPal, WebMoney and cashU, sell their electronic currency directly to the end user, but other systems such as Liberty Reserve only sell through third party digital currency exchangers. Bitcoin is new, and it’s different. Bitcoin, or BTC, is a decentralised currency not tied to one website. There is no one central authority controlling it. It’s an anonymous, untraceable, peerto-peer currency.
Yet like traditional currency, Bitcoin can be used to buy, sell and make payments online and offline, buy downloaded movies, purchase digital equipment and even purchase illegal drugs online. Bitcoins are created by digital ‘‘ mining’’ of cryptic information via super-fast computers, and there will only ever be a fixed number of BTCs created – just under 21 million – to avoid lessening their value.
‘‘ It wholly replaces state-backed currencies with a digital version that’s tougher to forge, cuts across international boundaries and can be stored on your hard drive instead of in a bank,’’ Forbes. com reports.
‘‘ Perhaps most importantly to many of Bitcoin’s users, [ it] isn’t subject to the inflationary whim of whatever Federal Reserve chief decides to print more money.’’
Unregulated currency sounds dicey. And it is. The currency has been hacked to the tune of 25,000 credits and again days later for 400,000 BTCs worth almost $ 9 million.
Dodgy business, but that’s the risky nature of the online frontier.
This is a bold attempt to create a real-world currency with no governments, no banks and no rules.
In the age of citizen journalism, cyber activism and virtual-to-real-world events such as Occupy Wall Street, it’s not such a sciencefiction concept.