Statistics predict that people will make 726 billion transactions using digital payment technologies by 2020, this is going by a study done by Capgemini and bank BNP Paribas. This is not surprising given that non-cash transactions rose by 11.2% between 2014 and 2015. The growing popularity of digital technology goes hand in hand with the growing e-commerce industry, with shopping spaces establishing a strong online presence. And it is not only physical shopping that has been altered, even traditional coupons have all but been phased out in favor of digital coupons. Digital money is changing the way we live in ways we may not have factored in.
Understanding Digital Money
Digital money refers to any means of payment that exists purely in electronic form. Digital money is transferred and accounted for by computers and is usually exchanged using technologies such as smartphones and credit cards. One of the most popular forms of digital money is cryptocurrency. Although experiments with digital currency started in the 1990s, most of them failed. The advent of PayPal changed this state of affairs but even now with the growing number of people who make digital transactions, it is still not as widespread as it ought to be. There are still large sections of the society such as the senior citizen population that still haven’t understood how to handle digital transactions. And for digital transactions to become the main way through which we make payments, we must increase awareness on how it works.
Digital Money and Hardware Wallets
One of the greatest fears when it comes to digital transactions is a breach in security that would compromise funds. However, advancements in technology have made it safer to make transactions with popular digital currencies such as bitcoin. One of the greatest advancements in storing these types of currency is a digital wallet, however, the market has now come up with a hardware wallet. The Ledger Nano S is the first digital currency hardware wallet that allows you to store your currency in the same way you do paper money. The information about the money is only stored on the device and not online which reduces chances of cyber theft.
The Birth of Crypto 2.0
Bitcoin is recognized as one of the forerunners of digital currency and has gained steady popularity over the years. However, many still consider it too unstable to be used in day-to-day transactions. This has precipitated the creation of crypto 2.0: coins that will allow direct payment between two parties without the need for middlemen while offering the stability that Bitcoin lacks. The creation of stable coins has been the latest craze in cryptocurrency circles but with varying degrees of success. The difficulty lies in picking a physical currency to back the virtual one so as to reduce value-fluctuations. If this problem is solved, these stable digital coins could be used with the same ease as fiat currency.
The world is changing at an astounding speed. We must consider where the future of money lies so we can prepare ourselves early for the impending digital shift.