Is Society Ready for the Coming Virtual Money System? Pros and Cons of an Emerging Reality
Virtual money is set to become the norm for future spending. Cash, checks and credit cards will be a thing of the past. As the trend toward online spending increases, virtual money, a decentralized, buying, and trading system will gradually take effect.
According to the European Central Bank, virtual money is a “type of unregulated, digital money,(Bitcoin) which is issued and usually controlled by its developers, and used and accepted among the members of a specific virtual community" (Prableen).
What makes a virtual money system so appealing is that it “limits the effect of monetary inflation on the virtual currency.” This means, unlike the traditional money system, that inflation will have little effect on its value in times of economic crisis
Bitcoins were the first virtual money introduced. With these digital coins, developers are “able to make deposits into a virtual wallet, in either PLN or Bitcoins and place buy and sell orders, with the exchange acting as an escrow for the funds.” (Prableen).
The trend toward virtual money is huge. Such a system will have many advantages and disadvantages in the virtually economic world.
First, people will have no need to carry around cash, checks or bank cards. This will help prevent robberies, especially bank robberies. Since the money system will no longer be centralized, ordinary thieves will have no idea of where to strike.
Stealing credit card information will become a thing of the past. There will be no credit cards to stick into ATM machines so that thieves can use devices to steal information. The introduction of the virtual money system will stop such activity in its tracks.
Since virtual money is a type of cryptocurrency, advertisers and other internet spies who monitor your buying and selling activity will no longer be able to trace your transactions. Therefore, you will not be bombarded by hundreds of marketing stalkers.
The bad news is that a virtual money system will wreak havoc on the traditional, centralized money system. The big hit will be brick and mortal retailers. Tens of thousands will go out of business for good, due to the loss of the physical exchange factor. The unemployment rate will soar, resulting in massive distress.
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There will be no need for people to go shopping anymore when they can just set at home and make transactions.
Another unfortunate consequence of using a virtual money system is that it will take the joy out of going shopping, mingling with people, and experiencing the joy of coming home with something fresh and new.
The fact is that people need to be around people most of the time. By such interactions, energy and a sense of intimacy are exchanged.
A virtual money system could lead the world into a state of personal isolation, the world in which people stay in their homes and forget about the significance of making friends and influencing people.
Furthermore, all so called, secure systems were meant to be compromised. Thieves are at every level of intelligence. Systems are hacked on a global scale, from election to banking systems.
Eventually, someone will crack the systems, which could be a disaster since the virtual monetary system will no longer be centralized and controlled by the government.
Last, the transition from the centralized monetary system to a decentralized, virtual money system will mostly likely be chaotic. Millions will not like the system and will reluctantly accept it. Many will want to remain with the safety and security of the traditional, governmental system.
A virtual monetary system has been set in motion. Its emergence has begun. The idea sounds great to some and frightening to others. No one really knows exactly how the virtual money system will impact the world economic system or if it will really take full effect.
Bajpai, Prableen. The 5 Most Important Virtual Currencies Other Than Bitcoin. Investopedia, 2014.