The Differences Between Electronic Money And Bitcoin
Electronic Money (e-Money) and Bitcoin are 2 systems for making payments that are digital in nature. Both are catalysts in the mobile payments revolution, that is where their similarities end.
These 2 systems are extremely different.
e-Money is an electronic component of fiat (paper) currency systems, and trades in familiar units such as USDs, Euros, Pesos, or Yen.
e-Money is typically regulated and controlled within the framework of a government’s central banking system. The customers of such transactions are identified under Financial Action Task Force standards and as a result are not anonymous.
Bitcoin on the other hand is a decentralized electronic currency that derives its value from supply and demand as well as trust in the system.
The network uses complex math to verify transactions, and the people that volunteer their computing power to the network, or “Miners”, are generated Bitcoins as a reward for their efforts.
Customers are anonymous in that they are not directly identified under FATF standards. However, to obtain full anonymity, customers have to take additional precautions. Bitcoin is not regulated in most places, although some countries have adopted some early regulations or rules.
While both Bitcoin and e-Money harness the power of the web and mobile, they are still very different.
The current realities of Bitcoin mean it is a long way off from reaching the un-banked. Only the financially included can access the Bitcoin system through the necessary digital connections to the Internet.
Want more information on the background of Bitcoin, go here :http://www.cgap.org/publications/bitcoin-vs-electronic-money
Have a terrific weekend.
HeffX-LTN
Paul Ebeling
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