What is Digital Money

Digital Money / Cyber Currency / Blockchain / Bitcoin etc

Digital money (or digital currency) refers to any means of payment that exists in a purely electronic form. Digital money is not physically tangible like a dollar bill or a coin and Bitcoin is probably the best known digital money in use.

Digital money can also represent standard currencies, such as dollars or euros. Digital money is exchanged using technologies such as smartphones, credit cards, and online cryptocurrency exchanges.

Digital money has the potential to streamline the financial infrastructure of the world, making it cheaper and faster to conduct monetary transactions, easier to store money and legal to avoid the gaze of central banks and taxmen.

But it has severe limitations, many attempts at digital money will fail, criminals love cyber currencies,  some varieties of digital money create instability in the markets and it is possible that the huge tech companies will come to dominate this space.

The money held in your  online bank account can be called digital money – it’s just numbers on a computer.

The world is moving away from cash to digital money and Sweden is probably the furthest ahead in this move.

Sweden is expected to reach ‘cashless’ society by 2025, although they do admit that some retailers will continue to accept cash beyond that date.

Types of Digital Money

Central Bank Digital Currencies

Many governments around the world are struggling to understand digital currencies and how they can used without causing destabilisation.


Cryptocurrencies are the most common digital currencies and are based on cryptography. This is used to allow for anonymity, public ledger transactions and safe storage.

The most popular cryptocurrencies are Bitcoin and Ethereum. Cryptocurrencies are becoming fashionable investments and the overall market capitalization of crypto markets had by July 2021 surpassed $2 trillion.


Stablecoins are a variation of cryptocurrencies and were developed to counter the price volatility of regular cryptocurrencies. The price is tied to that of a standard currency or a basket of goods to ensure that they remain stable. They can be a proxy for standard currencies, except they are not backed by governmental authority. The market for stablecoins has been growing rapidly.

The Advantages of Digital Money

The current financial infrastructure is very complex and every time money is transferred or changes hands there are costs involved.

  • Digital money eliminates the need for physical storage and safekeeping that is a characteristic of cash-intensive systems. You don’t need to worry about your digital money being stolen or lost (not strictly true)
  • Digital money simplifies accounting and record-keeping for transactions through technology. Therefore, manual accounting and separate entity-specific ledgers are not necessary to maintain records of transactions.
  • Digital money has the potential to revolutionize the payment industry by eliminating intermediaries and further reducing the costs associated with cross-border transfers.
  • Digital money makes it possible to include groups of people who were previously excluded from the economy by not having access to bank accounts. They can use digital money instead.

Digital money is a major innovation in financial technology. It makes payment systems faster and cheaper. But it has the attendant problems of technology, as digital money can be hacked and can erode privacy. While it is still early days for digital money, it will play an important part in the future of finance.

If you have any experiences with these scams do let me know, by email.

Fightback Ninja Signature

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.