It may be difficult to understand or believe, but the digital world now seems to have its own money; it’s called Kurrenci. It’s universal digital currency for the Internet. Just a few days ago, the site opened for registration, though some services are still being worked out.
With Kurrenci, you can shop and buy stuff on the Internet just as you do with traditional money. You can also gift money to friends, or donate it to your favorite charity. The developers of Kurrenci say the goal of this virtual money method is to make buying and selling easier, safer, and more affordable with what they call a positive exchange rate.
How does the exchange rate work? Kurrenci says you take the purchase price and divide it by the store’s exchange rate. For example, if a shirt you want costs $50 and the exchange rate is $1.25, then you pay just 40 Kurrenci. You save $10.
In it’s FAQs, the developers write that Kurrenci can be used all over the world. You can buy Kurrenci using foreign money of your choice and it can be used to make purchases anywhere on the planet.
To start getting these digital dollars, you can use your bank account, credit or debit card to buy Kurrenci online, or you can go to any MoneyGram location in the U.S. to upload cash to your Kurrenci account. The list of which online stores will participate in Kurrency will be revealed in a little over a week.
This digital currency complies with federal regulations, and you can trade back Kurrenci to U.S. dollars if need be. Will you give Kurrenci a go?
Source: TechCrunch
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Yep, just signed up. I’m a geek like that.
Let us know how it works for you. I’m waiting to see what stores have signed up to accept kurrenci.
you spelled Kurrenci wrong in your last paragraph.
Eli, thanks for catching that. I used a text expansion macro to spell out “Kurrenci,” so I’m not sure how I missed that one.
Hey Serra,
Thanks for signing up! Let us know know your thoughts? We love to get feedback.
Bakari, thanks for the article. Would love to chat and answer whatever questions you have. Some great discussion going on here – will try to response to each shortly.
Thank you for coming on here and responding to readers’ questions. I look forward to writing a follow-up article on this topic.
So how is this any different than Flooz? Having lost money in that deal, I wonder why I would want this?
Hmm, Janet, I’ve never heard of Flooz. Can you explain how you lost money with that site?
See: http://en.wikipedia.org/wiki/Flooz.com
Hey John, thanks for sharing this. Some of our readers may interested in knowing about this.
Thanks, John. Yeah, had earned from doing various things and had just under 500.00 in Flooz when they yanked it.
Hey Janet and John,
We are not the first to recognize that the internet should have it’s own currency, but we aim to do it better and learn from the mistakes of those who preceded us.
We have partnered with PreCash one of the largest money services businesses in the US. They (and us by extension) are licensed and regulated as a “money transmitter” and customer funds are being held in an FDIC insured account.
We have also instituted advanced systems to detect potential fraud and/or money laundering.
The safety of your money is our first priority!
The last time I heard about virtual currency was BitCoin–and that seemed to have flopped.
With the Kurrenci example used in this post, I’ll be saving $10 by using 40 Kurrenci to buy a $50 item (assuming I bought 40 Kurrencis(?) at $1 each). That means someone is losing $10–presumably the store owner that is selling at an exchange rate of $1.25. What is the benefit for them in losing money this way?
Users will only use Kurrenci if their favorite stores accept Kurrenci, but it takes effort for a store to implement Kurrenci support for their stores. If Kurrenci isn’t accepted at big name places like Amazon, eBay, and such, then users won’t be likely to switch over.
The question is, what is the benefit for a store in adopting Kurrenci? Seems like a risky move to adopt a virtual coin that could flop like BitCoin or Flooz.
Joel, you may have a good point. When I wrote the news story, I kept wondering what stores have signed. That will be revealed in about 12 days, I gather.
Joel,
Thanks for the questions! First (as others pointed out) BitCoin hasn’t flopped – it has found its niche in people wanting to do irreversible, anonymous transactions. We are not like BitCoin, nor are we looking to compete with PayPal.
The $10 is a customer acquisition cost that the merchant is giving to the consumer. If you think about how small to mid-sized ecommerce sites acquire customers, you will realize that they pay much more in affiliate/marketplace fees. With they can give that margin to the consumer in the form of a favorable exchange rate. Keep in mind, shops have full control of the rate at their site and are not forced to offer an added value all the time.
We have approximately 30 shops on board for the beta launch and are currently integrating them (you will be able to shop with Kurrenci withing 2 weeks). We aren’t going after the “big guys” but rather great sites that have the product consumers want at a great value. Amazon may control 50% of ecommerce sales but there are myriad other sites out there. We now offer them a level playing field.
Flopped? According to whom? Currently a bitcoin is worth about $6.30. I bought some prepaid cell service cards for bitcoin just last week, and had baklava shipped from New Hampshire a couple weeks ago. Bitcoin is doing fine.
…and 40 Kurrenci is worth 50 bucks, right MoonShadow? I went through the FAQ, etc. I’m gonna go out on a limb here, and posit that a lot of the other ten bucks is made up by selling all the information they collect on you. It’ll be interesting to see what they charge for currency conversion and/or withdrawals. Bitcoin, of course, takes care of those problems rather neatly; and inexpensively.
It’s just another PayPal – hooked into the big banks from end to end. The chargeback problems will be just as bad with Kurrenci, account freezes, etc.
Fail.
Toni and MoonShadow, it’s very clear that we need to do a follow-up article on Kurrenci. Lots of issues to think about. Please keep in touch with us about this topic.
We do not sell customer data! See privacy policy here: https://www.kurrenci.com/public/privacy-policy
Nope, Bitcoin is still chugging along stronger then ever. The market cap is still growing and currently at $58,617,738 USD. Kurrenci, on the other hand is still bounded by banking regulations and such, and thus will not be immune to problems faced by PayPal and so like chargebacks.
John and Toni, thanks to you both about your views on this subject. I want to point out that MUO has published a PDF guide on Bitcoin. http://www.makeuseof.com/pages/download-virtual-currency-the-bitcoin-manual
I have’t had a chance to read it, but it might be useful to this discussion as well.
Take a look at : http://www.weusecoins.com/getting-started.php to get started. The underlying mechanisms and basics are here: https://en.bitcoin.it/wiki/Introduction (I’m halfway through the wiki)
Some of the information on the makeuseof guide is old and depreciated, namely the solo mining stuff, Virtual Encrypted Disk at 100mb is too tiny to accommodate the rapid growth of now (currently at 2.4GB) and others.
Thanks, John. I bookmarked these pages for later reading.
A store will probably save on credit card processing fees, I assume.
I don’t see how they could save 20% on that, though. And there are definitely risks, too.
Yeah, Chris, we definitely need to do a one or two follow-up articles on this topic.
Chris,
You are correct – Kurrenci eliminates processing fees, but the primary value to the store is customer acquisition and retention.
Not seen the rules of operations yet, but if you can trade with several currencies, a smart arbitrage agent will crush the system in days.
Hmmm, Luis, I don’t have enough background knowledge about arbitrage agent to know how that works. Could you explain more?
Arbitrage is basically looking for price differences between markets. It is a well known practice mainly in the currency markets. You sell and buy currencies depending on their day to day price fluctuations for a profit.
So very basically you are looking to buy an euro in Paris and then sell it in Japan, for a profit.
So if the Kurrency have an exchange rate against several currencies, and (as expected) those exchange rates fluctuates then there is a chance for arbitrage.
Again I have not read how Kurrency works so I just assuming Kurrency is simlar in concept to legal tender bill.
Would the exchange rate have to fluctuate greatly if the “Kurrenci” is mostly done digitally, and it rotates within only that system? This is probably a really basic questions, so I apologize. It shows how little I know about world finance capital.
Today, the markets are much more sophisticated and complex. There are regulations, commissions fees, taxes, etc. that make arbitrage a complex business.
But let put those “restrictions aside” and make a simple calculation. If you have a profit of .001 of a dollar out of a 10 million dollar transaction, that’s it a $10,000 profit for one transaction.
And I forgot to mention that the buying and selling has to occur almost simultaneously in order to avoid exposure to risk.
So fluctuations doesn’t have to be great, just enough to create a profit.
Hey Luis,
Kurrenci works differently from other currencies which fluctuate based on market pricing. Kurrenci is pegged to the dollar when it’s bought but when used will be worth more. Each shop gets to set their own exchange rate (in real time) but can never be less than a dollar. So in essence it can only fluctuate in one direction – up.
To answer some of the earlier questions, there is no arbitrage opportunity here. 1 USD is worth 1 Kurrenci. The exchange rates are set by stores themselves. Despite the example of 40 Kurrenci getting you 50$ worth of stuff, I doubt most retail stores have margins big enough to give a discount like that while paying the Kurrenci company a small profit as well. Personally, I like digital currencies.
However, my take (and I may eat my words in a few years, who knows) is that this isn’t quite suitable enough for the “digital age” as they so call it. While I don’t own any Bitcoin, it hasn’t flopped and is the best digital age currency available.
My complaints being said, I applaud any attempt to work at a market-based currency. So I like that more companies are trying it, and one company will get it right soon enough. I look forward to that day.
John,
Thanks for your feedback! Please reach out to us – would love to hear your thoughts and how to improve it.
Oh, well, simple question, hard answer. If I knew exactly what would work I would do it myself obviously. That disclaimer being said; for the most part I like Aristotle’s requirements of actual money:
Durable (digits work as long as risk of loss has been removed, commodity currencies are good here, paper currencies not so good)
Portable (digits are super-portable, paper & commodity can be decent)
Divisible (again, digits rock, super divisible. Paper/Commodities are decent)
Must have a good market value (paper and digits are horrid here, commodity moneys are the best here)
Must have good weight/value ratio (digits=awesome, gold=good, copper=bad)
The thing with Kurrenci is that it is essentially a discounted dollar. Meaning, every currency is pegged to the dollar and worth at least as much. So in that regard it’s nice, but I don’t see it as a monetary instrument. As other commenters here have stated, it’s basically a new, cheaper, paypal. And shoot, Paypal could use the competition so I hope you do well!
I guess that’s not really helpful as you asked for “thoughts to improve”.
John, appreciate your feedback. This story has definitely got me interested in finding out more about bitcoin and how digital currency really works.
I think a non-State Digital Currency will come. I think it’s inevitable. As a big economics guy I see a non-state controlled currency as inevitable as the automobile was when the gasoline engine was produced. We have the technology, it’ll happen. On a side note, digital currencies have been shut down before by states, that has slowed things down a bit. Ones like the Liberty Dollar had a digital and physical currency; same with Goldmoney I think. Goldmoney is still around but aspects of their business had to change, though I’m not as familiar with their history.
Interesting stuff to think about and unfold. I definitely foresee changes coming to the monetary system as a whole in maybe the near future. Too many countries are facing serious economic challenges that the traditional fiat economy cannot solve. John, thanks for your feedback.
yeah it might become an issue with countries whose economy is not strong, people might buy those “internet dollar” which from what I understand will be based on the American $, thus create a shortage of cash.
would the money that we put we exchange would become untouchable by the feds? in which case we could argue that it might eventually become a refuge for people who wish to hide their money…
those might be silly questions but I’m thinking them…
Good questions, Tanguy. Perhaps myself or another MakeUseOf writer will do a follow-up article on this topic once Kurrenci gets off the ground. Thanks for your feedback.
Hey,
We are fully compliant with state and federal laws so would not be suitable for that purpose – you can try BitCoin ;-)
That being said, Kurrenci can be a great way for the underbanked population to safely store money without the fees/hassle associated with traditional banks.
Is it some type of substitute of PayPal?
Well.. I might give it a chance, but it is too soon to do it. I will wait a little more and see what others are saying about it.
RCBNeto, you’re right, many people will probably take a wait-and-see approach to find how it’s working, and what are the possible limitations.
I’m pretty sure they have thought that through, but again only time will tell.
is it real?
It seems so. We just have to wait and see how it catches on.
Did you know that 97% of US dollars aren’t “real” – cash is so outdated…
Looks interesting, the ‘exchange rate’ is a very attractive proposal. Of course it all depends on how efficient it is for online retailers to implement the system.
John, I agree. The retailers using Kurrenci won’t be coming online for another week or so. So we’ll see.
This isn’t a new currency. It’s a payment processor for US Dollars. 1 Kurrenci = 1 USD. How is this any different from PayPal or Liberty Reserve?
Good question, Adrian. I’m not qualified to answer it, but I will definitely be looking into it.
Definitely something I plan on checking out when it’s up and running. I like the idea though.
Hey Samantha,
Check it out and let us know your thoughts. We love to get feedback! #NeverStopImproving
So is this the new paypal? :p
Didn’t you hear – Facebook is the new Paypal :-) http://tcrn.ch/LRiBcT
We aren’t looking to compete with PayPal. Kurrenci is money – they are a wallet.
We obviously work very hard to prevent that but even if someone get’s your password they can’t spend your Kurrenci – that’s why we require PIN which is fully encrypted.
The best thing make this internet money different from many other internet money global acceptance. anything Else?
Fatan, not that I know of at this time.