PSYCHOECONOMY
2Nov/110

Cryptocurrency

From electronic money to 2.0 currency the Net allowes to imagine new exchange systems but also to repeat in the virtual realm usual errors of the actual system.

In almost 20 years of the Web existence, numerous examples of virtual currencies have emerged. On one hand, we have the currencies used in games or in communities such as Second Life metaverse. The economy in this virtual world is based on the Linden Dollar which current exchange rate in exchange offices fluctuates around 290L $ per 1EUR, varying according to the supply and demand laws and also to the currency emission of its “Central Bank”. The fact that not only the economies but also their land area of these communities lack of existence in the real world even increases the possibility of phenomena to which we have been getting accustomed due to recent crises in the real world: speculation attacks, bubbles, hyperinflation.

One different case is that of the Bitcoin, one of the first implementations of the concept of cryptocurrency, first described in 1998 on Cypherpunk email list by Wei Dai. Bitcoin allows holding and transferring values in an anonymous way. Being a decentralized electronic currency it is independent from the need of any central power making it impossible for any authority, governmental or other, to manipulate its value or increase its existence arbitrarily in order to generate inflation.

 

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