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Definition: digital coins


(1) See cryptocurrency.

(2) An earlier form of electronic traveler's check. Called "e-money" and "e-cash," the idea was to set up an account with a bank or to download digital coins from a bank into the user's computer. Either the coins or the transactions that debit the account were transmitted to the merchant for payment, and all transactions were encrypted.

Many believed that digital coins would fuel an online industry of micropayments allowing customers to pay in smaller increments; for example, five cents a lookup or 10 cents per download. However, the digital coin concept never took off. Today's blockchain architectures are the real manifestation of digital coins. See First Virtual, Open Market and smart card.