These days it feels like everything is going digital. Will currency follow suit? It may seem far-fetched to imagine that currency could go completely digital. However, people already depend heavily on credit cards and online auto-payments to pay their bills. Gas stations, parking meters, and even vending machines take plastic now and many people don’t carry cash any longer. So we might not be that far away from ditching paper money after all.
The Bitcoin revolution?
Did you realize there is an increasingly popular digital currency already in “circulation?” Bitcoin, first seen in 2009, is an “unhackable” peer-to-peer digital currency that's recognized around the world and can used to obtain goods and services.
Bitcoin is not truly a worldwide digital currency and is not legal tender, so most retailers won't take it. It’s possible that if someone were to create a competing digital currency, Bitcoin could become valueless.
The digital currency model
There are plenty of benefits to ditching paper money. You can't 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 continually replace ruined paper currency that must be taken out of circulation.
Digital currency may be more secure than paper money, too. When you are robbed as you are walking down the street, you have little chance of recovering the money. However, if a person steals your credit card, it's easy to 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.