The Evolution of Virtual Currency

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Virtual currency is a term straight out of science fiction, but many people use it on an almost daily basis. While it might sound strange, it is important to remember that most of the world’s money is not actually denominated in bills and coins anymore, but in ones and zeroes across numerous computer systems. In effect, virtual currency is the only kind that is still used in the vast majority of transactions.

It has taken a long time to get to this level, however. Just like finding more information on professional services, a mere cursory glance into the world of virtual currency is not enough to get a real understanding. If you want to understand how virtual currencies work, you have to start at the beginning and get a solid feeling for them.

Virtual Reality
What defines what is actual and what is merely virtual? To an extent, the differences are mostly academic once people begin to derive their livelihoods from virtual currency. Consider that many people get paid by their employers through direct deposits, and that sites such as eBay and amazon very rarely accept cash as a form of payment for any deal they broker. How far away from that is the currency that drives Farmville?

The beginning of virtual currency was the account ledger, and the first of these appeared in the ancient world. When a note receivable or payable was added, that could be considered a component of payment. Over time, this changed little until the 1950s, when the Diner’s Club credit card became an accepted form of delayed payment. As restaurants, and then eventually stores began to accept credit cards, cash became a less convenient, more easily stolen way to pay for anything. As such, many wealthier people have all but stopped using it.

As money began to largely move into the online world with the advent of the online bank and brokerage in the 1990s, more and more people began to do things like automate their savings and pay their bills online. There are even great tutorials on how cash rewards can save you money, even without physically holding the cash.

Wealth and Power
The new century brought with it new opportunities for virtual currency. Online forms of payment became far easier and more secure as websites like Paypal allowed users to escrow their payments, protect their information and retract payment from dubious sellers.

Today, virtual currency is such a ubiquitous part of the online experience that it is almost impossible to separate from many online games and websites. For a lot of people, actual cash is only useful if they are going to a fair or dealing with workers they pay under the table. The power to accomplish most things comes from having money in your account, not in your wallet.