3 Things We Wish Everyone Knew About Digital Currency
China is planning to permanently replace their currency with a “digital Yuan.”
That’s like the United States replacing the U.S. dollar with a digital version of our currency.
You might not think much of this, but this is HUGE!
We are literally close to having a digital currency world.
Just look around.
Remember when the IRS issued stimulus payments and among the first to receive them were those who already had direct deposits set up with the IRS? Some even received their funds via digital currency companies such as Venmo and Chime (more on this later). On the contrary, many others had to wait for paper checks to arrive in the mail.
With digital currency, you eliminate the need for paper checks, long lines at the bank, and the hassle of dealing with cash.
Money can be transferred to you or to someone else with just a few clicks or even a quick scan on your smartphone.
If you don’t know much about digital currency, here’s a quick explanation of it and three things we wish everyone knew.
What’s Digital Currency?
Digital Currency is simply digital money. Have you ever sent someone cash via Cash App or PayPal? That’s digital currency.
Instead of physically handing someone cash, you can just send them the cash digitally.
Digital Currency Comes in Several Forms
One thing you need to know about digital currency is that it comes in many forms.
We’re sure you’ve probably heard of Bitcoin by now. Bitcoin is a cryptocurrency, which is also a form of digital currency.
Cryptocurrencies like Bitcoin use blockchain (basically a digital ledger) to store financial transactions with cryptograph (algorithms or codes that are encrypted for security purposes) to keep payments secure.
According to Bitcoin.org, “Bitcoin when used on a mobile device allows you to pay with a simple two-step scan-and-pay. There’s no need to sign up, swipe your card, type a PIN, or sign anything.”
Have you noticed Apple’s logo at the counter of your favorite stores or outside a drive-thru window?
Apple allows its iPhone customers to pay for their in store, online, app, and drive-thru purchases (where applicable) using “Apple Pay.”
Apple Pay is another digital currency. In store, you’ll just need to hold your phone near their contactless reader to make the purchase.
To send money to someone else, you can go to your messages and select “pay” to send one of your contacts money via Apple Pay. They must be an iPhone user to do so.
Android has a similar digital currency for its users via “Android Pay.” Samsung has “Samsung Pay” and Google has “Google Pay.”
Let’s not forget other digital currencies such as Cash App, Venmo, Chime, and PayPal.
Our two favorite digital currencies in this list are Cash App and PayPal, which are both simple to use to send and receive money. If you’re looking to get into digital currency, we recommend you try Cash App or PayPal or even both.
You can send money to anyone on Cash App and PayPal if they have an account with these companies. It doesn’t matter if you’re an iPhone or an Android user. Phone type does not matter.
One of the best pros of these digital currencies is convenience. There’s no hassle of having to physically bring someone money or even having to deposit cash that someone gave you into your account.
But are there risks?
There Are Downsides to Digital Currencies
One of the biggest risks of digital currency like any other online transaction is cybercrime. You will still need to be careful and make sure your information isn’t easily accessible to everyone.
There are also fees to have money deposited instantly to your bank account when receiving money digitally. In most cases, there isn’t a fee if you choose to wait 1-3 business days for the money to be transferred to your account.
If someone sends you money via Apple Pay, PayPal or Cash App for instance, you will be charged a small fee if you choose to have the money deposited into your account right away.
Right now, there’s a 1% fee to instantly transfer money to your account on PayPal. If someone were to send you $215 on PayPal, you would get charged around $2.15 to have the money instantly transferred.
You can also potentially be sent a 1099 from some of these companies if you cross IRS thresholds, so be wise on how you use these digital currency tools.
Not Everyone Is Ready for Digital Currency
Unfortunately, digital currency is still new to those who prefer using cash. For those who have not been accustomed to using digital currency, it can be a little frustrating getting started if you know you’re not tech savvy.
With countries ready to push for a digital currency world, it may mean you’ll have to start learning how to use some of these digital currency tools if you want to receive your money easily and quickly. For those in China, digital currency may soon be their main option by 2022.
If you haven’t tried digital currency, don’t be afraid to ask for help from those who have already used it. You may find it easier than you think and more convenient.
If you’re a fan of digital currency, tell us your thoughts about this subject and how it’s benefited you!