The principle has been proved that innovation often occurs where the need for change is greatest. Look to Africa, where there are few banks, poor physical infrastructures and a rural population often dependent on remittances from the city. It is here that technology can really demonstrate value by offering a secure, efficient alternative to cash transactions. Such has been the success of products like M-PESA in Kenya that we are at a point where, looking forward to 2020, many experts, as well as the key players such as banks, governments and retailers, can see a world, particularly in emerging economies, where the majority of cash transactions have been replaced by digital ones – and where most of these will be made by our phones.
In Ghana, for example, one in 20 people has a bank account. Meanwhile, one in three has a cell phone.
Watches, baseball cards, cupcakes and cookies, artwork, a journal entry, a bike and even a dog have all found new homes at Main Street Family Dentistry in Tupelo, Miss.
Dentist Harry Rayburn and his staff accepted the tokens as a barter from patients on a single day in exchange for fillings, extractions and cleanings, mainly from uninsured patients.
Dax Hansen, an attorney at Perkins Coie in Seattle and one of the experts in this field, says virtual currency can be used to buy anything from a sword or armor in a game to a ring tone on a phone.
"It can be given away for free as a promotion," Hansen says. "It also can be given away as a marketing campaign if you provide some information. It has a value for which the marketer is willing to pay."
The trouble begins when that virtual currency can be redeemed for cash--particularly if it involves more than one company. At that point the financial services laws kick into gear, including those used to prevent money laundering.
In the latest wrinkle in the fabric separating reality from virtual reality, virtual money is being exchanged for real yuan on a booming scale. The practice is so widespread that it has raised concerns that virtual money could challenge the renminbi's status as the only legitimate currency in China.
This has not stopped some American politicians from expressing grave concern about the virtual currency. Charles Schumer, a prominent Democratic senator, has inveighed against it, claiming it is just what drug dealers have been waiting for. All the clever cryptography means Bitcoin dealings are difficult to trace. But not impossible.