With the introduction of online platforms, our lifestyle has changed. Daily chores revolve around digital sites and their usage in everyday life. More than 50% of the population have a real-life and a virtual one. It includes basic needs like chatting, calling to lifestyle management, gaming, exercising, etc. Another help the virtual world offers is money transactions.
Ever since online transactions and virtual currencies have come in place, the world has been more inclined towards a cashless environment. This is because of the advantages it has over carrying cash. E-money is more secure with speedy transactions. But, what is E-money?
What are E-Money and Virtual Currencies?
E-money is short for electronic money that translates to a digital medium of monetary exchange via electronic devices. These include smartphones, software with payment services, or magnetic cards. Other than e-money, there are various digital currencies such as cryptocurrency. While both of these are on online platforms, they work differently. E-money is regulated by a third party such as banks or other financial institutions.
Thus, it is centralized in nature. An attractive characteristic of crypto is its decentralized nature. That is, it allows transactions directly between users. Virtual currencies are more stable than crypto. An example is the tokens bought in online virtual games. These are regulated by an institution but not a governmental body.
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Facts about E-money
Now that we know what E-money and virtual currencies are, we shall look at some interesting facts about these.
- First transaction- It was done by a customer on 22nd May 2010 for buying Papa John pizza. He paid 10.000BTC.
- E-money license- If you are looking to store some e-money, you should look for trusted sites. In Europe, legal electronic money institutions are allowed to store and transfer e-money. For this purpose, they need to obtain a license referred to as the e-money license. Thus, you are provided with secured gateways for the transfer of your payment.
- Most expensive cryptocurrency- As the popularity of cryptocurrency grew, the value of various currencies peaked. Many coins are on a trend of rising to their full potential. The most expensive of all is Bitcoin, with its price at $68,585.00 at the present time of writing this article. Following it are other currencies such as Ethereum, Binance coin, Tether, etc.
- Sent to Space- Bitcoin, as is E-money. Genesis mining tied a model of Bitcoin to a paper wallet and sent it to Space. It was then tracked by a Go-pro; the transaction was successful.
- Hotspots for fraud- Even though virtual currencies provide top-notch security, there are some disadvantages to it. These transactions hide the identities. Thus, the transactions can’t be traced back in case of any fraud or cybercrime. Without any regulation and institutional involvement, this has become a hotspot for unnoticed illegal transactions.
- Taxes- If you were thinking of paying fewer taxes by saving up in the form of digital currencies, you could not be more wrong. As a means of regulation, the U.S. government has issued rules. They count digital currency as an asset. Thus, not declaring any virtual currencies is considered tax evasion.
- 24×7 service- E-money and virtual currency only require a stable internet connection to function. Years ago, you had to wait for the weekend to get over to retrieve money from banks. This has become easier due to e-money. You can access it anytime, anyplace. It is needed in emergency situations as there is no worry about banking hours.
- Low transaction cost- It is human nature, you tend to spend more during a sale than in everyday life. This is true for virtual currencies. Owners feel that the customer inflow has increased due to minimal transaction costs for most digital currencies.
- Invest what you can afford to lose- Digital currencies, especially cryptocurrency, are volatile in nature. They have a roller coaster ride without much stability. Thus, it is necessary to remember not to spend more than what you can bear to lose. Generally, it is advised to spend only 5% of your total sum.
- Cryptojacking- If you are habitual of using crypto or any other virtual currency, you must be aware of scammers. They put malicious code in your computers. This is referred to as crypto-jacking. It can be observed in your device as its battery gets discharged faster.
- China controls mining- Mining is done to verify different transactions before they are stored forever. China has control over 75% of the mining network.
- Can not be banned- Most people have speculations about cryptocurrency. Some believe that it will be banned in India. This is a myth as virtual money is decentralized. Thus, it is physically impossible to ban cryptocurrency.
- Ban in other countries- Some countries have begun to accept virtual money while others regulate the use of virtual money. Cryptocurrency is banned in the following countries- Ecuador, ALGERIA, Bangladesh, Nepal, Cambodia, etc.
- There are 5k currencies- Presently, there are 5000 currencies in the world. This is due to increased attention towards the industry. Some virtual currencies are unpredictable. Thus, you must invest little in them. Others such as Bitcoin have been around for more time and have become stable.
- Anonymous Developers- The identity of Bitcoin’s developer is still hidden. Independent developers can have access to customize core codes and modify them since cryptocurrencies operate on an open-source ledger.
These were some facts that you may want to keep in mind before entering the world of e-money and virtual currency. They are safe, speedy, and less hectic but come with their fair share of disadvantages. It is better to count the risks against the benefits. It is often advised to keep crypto as an investment once you have saved for other goals in traditional forms. It is better to realize that ever-evolving technologies may sometimes regress, and it is not practical to lose everything. Thus, E-money and virtual currency are great to explore, use, and invest in. However, please do not forget to research carefully before pledging your funds.