At current valuation, the bitcoin system surpasses the average market cap of $4.5 billion of the world’s three largest wire-transfer services: Western Union, MoneyGram, and Euronet. Clearly the momentum and support for bitcoin and the digital currency movement that it represents should be considered a serious influencer and driver in the evolution of financial systems and services.
Even the greatest proponents of digital currencies have expressed doubt that bitcoin or any other cryptocurrrency will ever become the currency of an entire nation, but there is a collective desire and a role for digital currencies. There is also a need to improve the way financial transactions operate.
This paper provides an overview of the current digital currency landscape and educates the reader about the opportunities around the adoption of bitcoin and other alternative currencies.
- It is not the digital currency itself but instead the bitcoin protocol and its variations and extensions that represent a new phase of internet use and development — the internet of value.
- While the web provides the interface for digital transactions representing the exchange of goods and services, the internet of value is a mechanism for the entirely digital exchange of money and other instruments of value.
- The potential of alternative currencies and payment protocols lies in not only the promise of faster, cheaper money exchange and financial transactions but also the creation of a new paradigm for the digitization and transfer of all things of value. That means not only replacing slow proprietary money-transfer systems and procedures such as automated clearing houses (ACHs) but also revolutionizing onerous procedures such as real estate title transfers, loan origination, and contract signings.
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