Consumer spending heavily relies on digital currency and perhaps someday paper money will be obsolete. It might sound fantastic but consider how frequently you yourself use a credit card to purchase things, go online to shop, or receive gift cards preloaded with a specific dollar amount. Probably you pay your bills via online banking, pay-at-the-pump with a credit card, and even purchase movie tickets online. When you consider how frequently you actually use digital currency on a day-to-day basis, we aren’t really that far off from going completely digital with our currency.
The Bitcoin revolution?
Some consumers have been using an actual digital currency since 2009, Bitcoin. Bitcoin is a peer-to-peer digital currency that users across the globe can use to buy products and services. The open-source program behind Bitcoin is considered impossible to hack, so that alleviates many security concerns.
Bitcoin isn’t technically a legal tender and for that reason many, if not most, retailers outside the Bitcoin user database will not accept it. It’s very possible another alternative digital currency may pop up and over take Bitcoin, becoming more mainstream compared to the revolutionary Bitcoin.
The digital currency model
There are many benefits to ditching paper money. You cannot lose digital currency because it falls out of your pocket. You don’t have to be sure that you constantly have enough of this digital money in your pocket to cover a purchase. Furthermore, countries can eliminate the need to constantly replace damaged paper currency that must be removed from circulation.
Digital currency can be more secure than paper money, too. When you’re robbed as you are walking down the street, you have little possibility of recouping the money. However, if a person steals your credit card, you can quickly cancel the card, protecting yourself financially. The same scenario could easily exist with your digital dollars.
It’s unlikely the change to an all-digital currency world will be met without a few strong objectors. There are still consumer luddites today that have never opened a line of credit with a credit card company, never used the banking system, and prefer to handle all purchases with cash. The future is always in flux and it will be interesting to see how both sides of the debate form their stance on the issue.
Posted on: 12.16.11