In this piece, we’ll briefly explain what electronic cash is, the importance of it, and why projects like Veil matter.
What is electronic cash?
Electronic cash is a digital form of money that aims to have all the characteristic of physical cash. At first thought, this may seem easy, but once you consider the intricacies and implications involved, it becomes a very complicated goal.
Physical cash has the following attributes:
- Recognized Value
Creating a digital asset which is fungible, portable, and divisible isn’t that hard. Adding anonymity and recognized value is where things get tricky. Additionally, there are added security risks from a technical perspective when introducing electronic cash. These risks are unlike physical cash, which has different security risks as well.
We’re not trying to teach you all there is to know about leveraging blockchain technology as a privacy-focused settlement layer. It is, however, worth explicitly understanding that when electronic cash takes on all of the characteristics of physical cash there are added complexities. Everything done digitally is stored in memory and traced, which makes it extremely difficult to achieve the same privacy and anonymity value that physical cash offers to consumers.
Why is electronic cash important?
Many speculators, investors, builders, and businessmen are referring to the blockchain and cryptocurrency revolution as web 3.0, or the “value layer” of the internet.
When personal computers first came to existence, people thought the use-case was limited to providing information and acting as a powerful calculator. Fast-forward to web 2.0, and people began creating personal websites, making chat rooms, and communicating over the internet, which grew into social media as we know it now. This is the social layer.
As people use computers on a daily basis to not only learn, but communicate, track appointments, and purchase goods, it’s wise to consider web 3.0, the next “value” layer which lets the world transact and transfer value globally in a frictionless manner.
As we move to purchase virtually everything on the web through giants like Amazon and others, we are limited to using credit or debit cards, tied to our identity. In the real world, we have the option of going into a store and paying with cash. The upside here is that they won’t target you with ads, sell your data to other companies, or use that information to ultimately waste your time.
It’s time we have the option of electronic cash, so we can purchase goods online just like we can from a store in person. In the future, we will write a separate, deeper piece on the importance of privacy and how we are becoming numb to the underlying importance of it.
What is Veil doing to help?
Projects such as Bitcoin, Litecoin, and Ethereum are excellent and have their use as a globally recognized pseudonymous payment network or platform; note that we said pseudonymous. Bitcoin is not 100% private, which means that malicious attackers can use metadata to actually pinpoint your IP and end user identity.
Once communities learned about this reality of Bitcoin, privacy-focused projects began to gain popularity, and Veil is one of them. We have a team with leading developers and professionals in the space from PIVX, Ravencoin, and others. We take advantage of RingCT, and until recently, after Zerocoin protocol vulnerabilities have been found, we are exploring other layers to further hide identities tied to transactions. These include not just peer-to-peer transactions, but staking and mining as well.
All in all, we are passionate about web 3.0 and are doing our part to ensure consumers have the right options at their disposal when it comes to spending online.