CRYPTO-CURRENCIES: it's high time you get to know it, have it and use it

The "Crypto Currency" is digital cryptographically coded currencies, used for the direct, contactless transaction peer users, bypassing any intermediate part (State, banks, authorities). The transactions are based on a decentralized global network of Peer to peer users (P2P) that determines the value of the currency on the basis of supply and demand.

The first generation open Crypto Currency software was created in 2009

By one (or some) under the pseudonym Satoshi Nakamoto and called Bitcoin. Written with a capital letter as here, refers to software and the P2P network which is used to produce and distribute money through cryptography. Instead, bitcoins refer to the same coins are used to process information from the software. The coins are produced through a process called mining and in which participants certify and record transactions in exchange, trading fees or new bitcoins.

The success of bitcoin was followed by other crypto-currencies, like: Litecoins, dogecoins and redcoins. In the last year the volume of exchange of bitcoins has risen from $ 150 million to $ 1 billion. Superficially, this amount is a tiny percentage of the global economy. But it reveals a deeper trend, which in combination with the development of new technologies and alternative payment methods may compete with the existing banking system. In 2013 alone, three new crypto’s has been created (ripplecoin, dogecoin, primecoin). At the moment, a team of Johns Hopkins University researchers is trying to create a unique digital currency called zerocoin, which will provide the same anonymity with paper money.

To a large extent, supporters and opponents of digital currencies reflect traditional economic theories. Proponents as an invaluable tool to bypass the central and commercial banks impose monopoly interests. In bitcoin decisions are taken by an enlarged online community in real time and without the intervention of middlemen. It dramatically reduces transaction costs supporting anonymity.

Bitcoins can be stored in convenient electronic wallets in other than electronic storage media or even to gain physical form (hardware wallets) through metal, paper or plastic. Monetary stability is enhanced by the lack of availability of bitcoin, which is based on a strict timetable. Currently, about 25 bitcoins / 10 minutes are created, while the bitcoin will reach 21 million units by 2140. Finally, bitcoin division reaches eight decimal places (0.00000001), enabling transactions that is impossible with conventional currencies.

The legal status of digital currencies is unclear. Of course, there are countries like Australia, Canada and Finland allowing the transaction and their taxation, while the prime minister of Belgium said he sees no problem with the currency, and so the central bank. Despite the warnings of the Bundesbank, Germany copied the legislative framework of Singapore recognizing bitcoin as private currency. Britain initially geared to taxing bitcoins VAT as if coupons, and now it seems that it will follow the path of Singapore. Impressive is the attitude of Norway, who treat them as assets and tax respectively.

The bitcoin issue is best reflected in the US, where the currency trades freely, but the authorities appear unprepared to govern or to impose tax. Indeed, the resolution of the Federal Election Commission (FEC) on the acceptance or otherwise of bitcoins, the political financing of candidates reached an impasse. However, the list of US citizens who accept the 'currency' grows and there are plans for even ATMs with bitcoins, but under very strict conditions.

In any event, the "International Financial Institute» (IIF), has highlighted the risk of bypassing the banks in the financial transaction process. This focuses mainly on the vertical rise of contactless transactions via the Internet with little or no supplies for the final recipient of services. Therefore, the intermediary role of banks in the distribution of money increasingly reduced. Already, the "paypal" is considered for many the most reliable payment method while "Amazon payments" has made a dynamic start counting 215 million active accounts. Think what could be done if companies like Google, Amazon and eBay (paypal) promoted their own currencies.

How the traditional banking sector does react? Since 1999, the JP Morgan had made an original way of electronic payments resembled the «bitcoin». In December 2013, the bank was forced to renew the forgotten patent, looking to the future of electronic currencies. Although banks have already developed a personalized payment system, the credit still belongs to online companies.

Sooner or later, governments will build their own electronic currencies in tandem IT and banking giants. Of course, the dominant role belongs to the «mobile payment» which in the medium term will dominate everywhere leading to the creation of internationally accepted electronic monetary units. In the meantime, the various Crypto-currencies will possibly enrich money laundering in various ways, while filling the pockets of speculators and would-be fraudsters.