Digital gifting

Digital Gifting
Digital gifting is the use of digital media to exchange gifts using smart devices. Most Digital media gifts are usually communicated between users in electronic media including computers, smart devices, and smartphones. This communication in electronic media is measured in “data packets” or file size” called Bits and Bytes. One bit contains a single binary value — either a 0 or a 1. A byte contains eight bits, which means it can have 256 (28) different values. These values may be used to represent different characters in a text document, the RGB values of a pixel within an image file, or many other types of data. [http://(1) (1)]
In Digital Gifting, the “gift” token that is exchanged by Users is virtual which means it has no physical or tangible form and exists only in Binary (Computer Bits and Bytes) form. Although comparable to virtual currency, virtual gifts tokens are different because they have no exchange value and receiver cannot re-send or re-gift the virtual gifts to another person.
Virtual gift tokens have no monetary value or physical value and thus, cannot be exchanged for goods or services. However, when nominated or associated to a particular currency value, virtual gift token may be redeemable for designated products within a network. As defined and clarified in its final guidance report on virtual currency 2013, the Financial Crimes Enforcement Network (FinCEN), a bureau of the US Treasury, in contrast to its regulations defining currency as "the coin and paper money of the United States or of any other country that is designated as legal tender and that circulates and is customarily used and accepted as a medium of exchange in the country of issuance", also called "real currency" by FinCEN, defined virtual currency as "a medium of exchange that operates like a currency in some environments, but does not have all the attributes of real currency". In particular, virtual currency does not have legal tender status in any jurisdiction. [http://(2) (2)]
One of the pioneering digital gifting service company is Giibox which promotes the use of virtual gift tokens called Gtokes among its users on its mobile application on smartphones (3)
Because virtual gift tokens are supported only within a closed network and lack acceptance or value outside that particular network, they are extremely limited beyond gifting, unlike cryptocurrencies or virtual currency such as bitcoin which in 2012, the European Central Bank defined “as "a type of unregulated, digital money, which is issued and usually controlled by its developers, and used and accepted among the members of a specific virtual community" (4)
Most digital gifts are commonly found with applications on smartphones. However, a majority of the digital gifting service currently involved either the transmission of virtual prepaid gift cards, gift tokens or gift codes which the recipient can redeem towards shopping at the retailer of the gift card for shopping online or in some cases at the physical retail store, at checkout.
1. Home : Technical Terms : Binary Definition Binary

2. "FIN-2013-G001: Application of FinCEN's Regulations to Persons Administering, Exchanging, or Using Virtual Currencies". Financial Crimes Enforcement Network. 18 March 2013. p. 6. Archived from the original on 2013-03-19.
4. European Central Bank (October 2012). "1". Virtual Currency Schemes (PDF). Frankfurt am Main: European Central Bank. p. 5. . Archived(PDF) from the original on 2012-11-06.
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