-ECONOMICS ASSIGNMENT

 HISTORY
 DIGITAL CURRENCY
 CRYPTOCURRENCY
 DIFFERENT SYSTEMS
 IMPACT OF DEMONETIZATION
 IMPACT ON INDIAN ECONOMY
 SECURITY
 COMPARISON
 RECOMMENDATIONS

Bartering &
Exchange
Cowrey Shells
(1200 B.C.)
Metals(1000
B.C.)
Paper Money
(1000 A.D.)
Coins (600 B.C.)
Banking in
Europe (1400
A.D.)
Wampum
(1637)
The Gold
Standard (1816)
Credit Card
(1950)
Google Wallet &
Clear Exchange
(2011)
Plastic Money
(1990s)

 Electronic money is money which exists only in banking
computer systems and is not held in any physical form.
 Electronic money, or e-money, is the money balance recorded
electronically on a stored-value card.
 It may refers to several systems which enable a buyer to pay
electronically by transmitting a unique number (called digital
certificate) similar to a banknote number.
 In economic terms electronic money is monetary value
provided by the issuer on demand, expressed in government
or private monetary units stored in electronic form on an
electronic device.
 Both virtual currencies and cryptocurrencies are types of
digital currencies, but the converse is incorrect.

 A cryptocurrency (or crypto currency) is a
medium of exchange using cryptography to
secure the transactions and to control the
creation of additional units of the currency.
 Cryptocurrencies are a subset of alternative
currencies, or specifically of digital
currencies.
 There were more than 710 cryptocurrencies
available for trade in online markets as of 11
July 2016, but only 9 of them had market
capitalizations over $10 million.

Electronic Money includes four different
systems namely:
1. Centralized Systems
2. Decentralized Systems
3. Mobile sub-systems/Digital Wallets
4. Offline Anonymous Systems.

 Many systems—such as PayPal, eCash,
WebMoney, Payoneer, cashU, and Hub
Culture's Ven will sell their electronic
currency directly to the end user.
 Other systems only sell through third party
digital currency exchangers.

 Decentralized e-money is stored and flows
through a peer-to-peer computer network that
directly links users, much like a chat room.
 No single user controls the network.
 Some decentralized types:
- Bitcoin
- Monero
- Litecoin
- Ripple Monetary System
- Dogecoin
- Nxt

 Bitcoin is a digital asset and a payment system
invented by Satoshi Nakamoto, who published the
invention in 2008 and released it as open-source
software in 2009.
 The system is peer-to-peer; users can transact
directly without needing an intermediary.
 Transactions are verified by network nodes and
recorded in a public distributed ledger called the
block chain.
 The ledger uses bitcoin as its unit of account. The
system works without a central repository or single
administrator, which has led the U.S. Treasury to
categorize bitcoin as a decentralized virtual currency.
 Bitcoin is often called the first cryptocurrency.

 Monero (XMR) is a cryptocurrency created in
April 2014 that is focused on privacy,
decentralization and scalability.
 Unlike many cryptocurrencies that are
derivatives of Bitcoin, Monero is based on the
CryptoNote protocol and possesses
significant algorithmic differences.
 Monero is an open-source pure proof-of-
work cryptocurrency. It runs on Windows,
Mac, Linux and FreeBSD.

 A number of electronic money systems use contactless payment transfer in
order to facilitate easy payment and give the payee more confidence in not
letting go of their electronic wallet during the transaction.
 In 1994 Mondex and National Westminster Bank provided an 'electronic
purse' or to residents of Swindon
 On September 9th, 2014 Apple Pay was announced at the iPhone 6 event. In
October 2014 it was released as an update to work on iPhone 6 and Apple
Watch. It is very similar to Google Wallet, but for Apple devices only.
 GNU Taler is an anonymous, open source electronic payment system
currently (September 2015) in development.
 BKasH is the leading payment system in Bangladesh

 It can be done ‘offline’.
 In this electronic money system, the
merchants do not need to have interaction
with banks before receiving currency from the
users. Instead of that, the merchants can
collect spent money by users and deposits
the money later to the bank.
 The merchant can deliver his storage media
in bank for exchanging the electronic money
to cash.

 This time of economic crisis indirectly taught its 1.3 billion people
that cash was unreliable - one day there, the next day gone - and
there was a nationwide frenzy with the stock market falling by 7 per
cent, cash shortages and several deaths from people queuing to
exchange their worthless money.
 A significant disruption to the economy occurred with more of
India’s largely younger population turning to Bitcoin. At the time, a
large number of industries were already using Bitcoin and shortly,
thereafter, the number of investor grew to the point where mid-
2017, 2,500 Indians invested in Bitcoin daily, according to The
Economic Times.
 The digital coin attracted people in India, since it offered a safer
system for their money, a haven from inflation, refuge from
government regulation and interference, and a system that avoids
political and economic turmoil

 Last year, more than 500 merchants in India
and five of India’s largest companies,
including Dell, accepted the cryptocurrency
as payment, according to GBminers co-
founder Amit Bhardwaj. The number grows by
day.
 Bitcoin is far from popular, and most Indians
prefer fiat money, but a recent Forbes article
reports Bitcoin's craze is catching on and
that, to date, there are more than 600,000
users in the country.

 Encryption
 IT infrastructure
 Complexity
 Deep web
 IT knowledge
 Availability of information

ADVANTAGES DISADVANTAGES
Privacy and confidentially Fraud
Security The double spending of digital
coins
Environmental friendly Complexity
Mobility Security
Anonymity Laws and regulations
Record of transaction Mass exposure
Cross transaction

 Digital currency reduces overall cost of operation
drastically compare to paper money.
 It is more environmental friendly as there is no need of
paper and no paper means no cutting down of trees.
 As the technology is new, there are some security and
stability concern about “E-money” which are controllable
in most of the cases.
 There should be some legal guidelines and law about this
to prevent money laundering and other unethical uses of
digital currency.
 Banks, financial intuitions and governments should come
forward and work along with the tech-giants such as
Google, apple, Microsoft, facebook etc. to develop the
revolutionary but secured and stable transaction system
using “digital currency.”

GROUP F
ROOM NO. 39