Electronic currency

Electronic currency is refers to exchanging or trading the money electronically. A person is able to make payment for the goods or services through the internet. E-currency just like real cash and it is reusable. It has been widely in use in the countries like Singapore and Hong Kong. For instance, direct deposit and Electronic Funds Transfer (EFT) is the main types of the e-currency.

Why electronic currency is created?

As there is the increasing of the criminal case, it creates a lot of troublesome issue if carried a lot of paper money in hand. In order to protect for the users, credit cards, debit cards, online banking, exchanging of electronic currency ahs been created. It has lessened the usage of the paper money and convenient to the users.

There are some advantages of the electronic currency.

1) E-currency provides the confidentiality and privacy for the users. When users sent an e-currency amount to the businesses, it does not contain any private information to the businesses. It is totally different with the credit card system.

2) Security of E-currency is strengthened by using the encryption which is known as RSA cryptography. It requires the authorities to use a trustworthy system and eliminate the risk of breaking the code of a digital signature.

3) As the users are able to transfer the e-currency through the internet, it saves time for the users without going out to the bank to make transaction.

However, there are still some drawbacks of the electronic currency.

1) The major problem may occur is fraud. If users accidentally misplace their private key, the perpetrator may use this opportunity to withdraw their money.

2) Peer-to-peer double spending of digital coins. Let say the users choose not to involve bank as an intermediary. If the digital coins are sent to the wrong places, they have to bear their losses.

Electronic currency has brought a lot of benefit for the users. Nevertheless, there is still need more improvement in the research and development to reduce the risk of disadvantages faced by the users especially fraud.

Ebay is one of the example that are using e-currency.