Technology has increased, in use and capability, to the point where alternative currencies can be put into place which by their nature a government or any single entity can control meddle in them directly. I believe this to be a good thing and it map help usher in a greater world peace possibly greater than even that attributed to the nuclear bomb. The biggest hurdle being looked at is what economics rules need to be put in place for such currencies to do this, with the two most outspoken schools of thought and argument coming from Austrian vs. Keynesian economics. Another common denominator to the rise in these projects is a seemingly global increase plight of citizens to reclaim civil liberties that in many countries gradually being stripped from the people. Two notable examples would be Ripple and BitCoin. Ripple directly being an exchange of debts between individuals and BitCoin being an exchange of digital currency that in and of itself is intended to have value and properties similar to gold and silver. I point those out because it would seem that they are increasing in visibility and use more than most. What is even more unique in these systems is that they are revolutionizing a major principle of one of the major parts of money which is intrinsic value, no digital currency can be directly turned into a good or service, the same is true of fiat currency however fiat currency was an evolution from money which did have intrinsic value. I would argue however this is really just an evolution of fiat currency, and this can easily be seen by how people currently view those currencies. Ripple is a measure of debt based on an external system of value (typically fiat currency) and BitCoin is not measured by it's value against goods and services but it's value against fiat currency. The early merchant adopters of these systems have typically been in the form of service offerings which is a sign that even at their current level of risk people are willing to trade time more than actual physical goods for these currencies in both systems however the trade of goods does occur but the adoption seems to be slower and even then it is more based on the value in fiat currency they can get from these and not the value of the currency itself so a premium is often charged due to the need for use of a currency exchange. In any decentralized alternative currency this will be the case.
The biggest shortcomings limiting adoption of these currencies is government policy, for instance taxes, by law in the U.S. you must pay your taxes in U.S. Dollars so to use any alternative currency you must exchange it and perform accounting in U.S. Dollars and not an alternative currency. China has very strict currency control laws and any use of an alternative competing currency is outright illegal. What this leads to is an interesting phenomena, the earliest adopters for use as an exchange for actual goods of value will be Black Market trading. With the crack down on online gambling in the U.S. there were online casinos which started accepting alternative currencies and merchants who openly trade contraband goods for it as well. This is due to the anonymity of the currency transaction itself which is a necessary feature of any decentralized currency. With a little research of my own I discovered you could also trade foreign currency at much more favorable rates than the current mainstream forex markets... for instance the Chinese renminbi trades a little more favorably against the U.S. Dollar than it does on the forex markets and there are much lower fees in the processing than would be charged by centralized financial organizations. I believe it is these things which will spurn a backlash by governments and ironically solidify their legitimacy as a fair and valid form of currency since they would need to be treated as such in order to create legislation against them. Ultimately however once any alternative currency gets to the point where there is widespread adoption and merchants begin to shift to trading alternative currency directly and not their worth vs. fiat currency will be the golden moment when they have a very strong chance to outright replace traditional fiat currency. Of course it would be nice if government helped speed the process along and allow people to buy government services and pay taxes in an alternative currency but that is unlikely as it is giving up one of their primary means of control on their citizens and economy, it will take mass adoption for this to happen.
What alternatives are out there? It is very interesting for sure. Here is another project in the works, the Terra, to help you in your research.