The Demise of Paper Currency

These days it seems like everything is going digital. Will currency follow suit? It may seem far-fetched to imagine that currency could go totally digital. However, people already depend heavily on credit cards and online auto-payments to pay their bills. Gas stations, parking meters, as well as vending machines take plastic now and many people don’t carry cash anymore. So we might not be that far off from ditching paper money after all.

The Bitcoin revolution?

Did you realize there is an increasingly popular digital currency already in “circulation?” Bitcoin, first seen in 2009, is an “unhackable” peer-to-peer digital currency that’s recognized across the globe and can used to purchase goods and services.

Bitcoin is not truly a worldwide digital currency and is not legal tender, so most retailers won’t take it. It’s entirely possible that if someone were to create a competing digital currency, Bitcoin could become valueless.

The digital currency model

There are many advantages to ditching paper money. You can’t lose it, you don’t have to worry about having exact change, and there’s no need to replace damaged currency, which saves time, energy, and funds.

Digital currency may also be safer. For example, if your cash-filled wallet is stolen, there is little chance you will get that money back. However, if someone steals a credit card, you can promptly cancel it to protect yourself from further theft and possibly get some of that money back. Likewise if someone were to steal your digital dollars, the digital trail would make it more likely that you may retrieve your funds.

Holdouts

Not everyone is sold on the idea of digital currency. Many people still don’t use credit cards or even have a computer. They prefer to use paper money, as it feels more real to them. We will just have to see how the world changes and if the luddites out there will change their minds.