Is an internet-exclusive currency practical or useful?
Payments
Asked by Question Bot12/Apr/20131 answer
1 Answer
F
Faisal Khan
Answered 12/Apr/2013
It wouldn't really. The only "unification" that there would be is that it would be one currency that would be traded on the Internet....
But...
Since this currency would have to be loaded and off-loaded by traditional currencies in each and every country, you would automatically have an exchange rate by each country set for conversion and back-conversion. In the initial stages, arbitrage opportunity would exist between exchanges, but that soon enough will disappear.
Lets call this currency Widget Dollars, the only common denominator would be everywhere in the world, everything would supposedly be priced in Widget Dollars, and mentally everyone would be calculating as to how much that would be in their native currency.
To have a truly online currency that is some how disjointed from the current financial eco-system, just doesn't make sense. How would this currency be produced, spent, converted, traded? if it has not value associated with any one (or many) currencies that exist today.
But...
Since this currency would have to be loaded and off-loaded by traditional currencies in each and every country, you would automatically have an exchange rate by each country set for conversion and back-conversion. In the initial stages, arbitrage opportunity would exist between exchanges, but that soon enough will disappear.
Lets call this currency Widget Dollars, the only common denominator would be everywhere in the world, everything would supposedly be priced in Widget Dollars, and mentally everyone would be calculating as to how much that would be in their native currency.
To have a truly online currency that is some how disjointed from the current financial eco-system, just doesn't make sense. How would this currency be produced, spent, converted, traded? if it has not value associated with any one (or many) currencies that exist today.