engleski

Digital Currencies as a Substitute Means of Payment

A social community is a group of people involved in the processes of the consumption of results of work of the producer as a seller, and the consumers as buyers who pay for the producer’s goods or services. In that process, people, on the daily basis, can contemporarily be producers and consumers. If everyone would produce only as much as he or she consumes, there would be no offer on the market. Since the economic relations within a social community work differently, each community member needs a regular supply of money in order to buy other people's products or finance own production. The money circulation, that is to say the wealth exchange within a social community, favours the creation of a greater variety of products, services and ideas, which implicitly or explicitly enriches every member of that community. In order to make the money work properly, which in praxis is not the case, everyone should have it and everyone should have an equal access to it. For that reason money as a currency should fulfil three objectives: be the unit of measurement for the value of a good or service, be “storage" of the money value for the future acquisitions and, finally, be a medium of exchange. Recently, one of the innovative and alternative means of exchange, especially at a local level, have become digital currencies, known also as alternative money. These currencies, which are the object of this research, are a means of payment or exchange that can be used instead of the national currency, mostly at the local community level. This paper's objectives are to acquire general insight into the presence and frequency of use of this currency in other countries, as well as its advantages and disadvantages. Furthermore it aims to analyse the legitimacy of the use of digital currencies in respect to the traditional means of payment. This paper’s hypothesis is that the digital currency can be a legitimate and a successful means of payment of goods and services if the local community embraces it with confidence. The scientific contribution of this paper is the first detailed analysis of the worldwide present digital currencies from the Croatian perspective as well as opening of new scientific questions on future research in this field.

Digital Currency, National Currency, Means of Payment

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