These days it appears as though everything is going digital. Will currency follow suit? It may seem far-fetched to imagine that currency could go completely digital. However, people already rely greatly on credit cards and online auto-payments to pay their bills. Gas stations, parking meters, as well as vending machines take plastic now and many people don’t carry cash any longer. So we might not be that far off from ditching paper money after all.
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 purchase products and services. The open-source program behind Bitcoin is considered impossible to hack, so that reduces many security concerns.
Of course, Bitcoin is hardly a worldwide digital currency. For one thing, it is not legal tender. So most retailers, even in the online world, don’t accept it, and there’s no guarantee that Bitcoin won’t simply disappear. Entrepreneurs may produce an alternative digital currency that proves more popular, and consumers could instead flock to that. This could render Bitcoin valueless.
The digital currency model
The advantages to moving away from paper-based currency are numerous. Apart from misplacing a gift card, it is not easy to lose digital currency. You don’t have to worry (as much) about not having enough funds on you to cover an expense. Digital currency can also be more eco-friendly, since the need to replace damaged or outdated paper currency is removed.
Digital currency may also be more secure. For instance, if your cash-filled wallet is stolen, there is little chance you will get that money back. However, if a person steals a credit card, you can quickly cancel it to protect yourself from further theft and possibly get some of that money back. Likewise if someone were to steal your digital dollars, the digital trail would make it more likely that you could recover your funds.
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.