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E-currency

November 29, 2005

Introduction

The e-currencies are cash or value transactions through electronic means such as the internet. Electronic Fund Transfer or EFT is a good example of e-currency. Due to the absence of a foolproof cryptography for e-currency it has not yet reached its true potential. Still there are two success stories of e-currency; Octopus card system of Hong Kong and Interac network of Canada.

At present, e-currency represents a system of Credits and Debits within a stand alone network or across selected networks. There are many variations in the networks such as PayPal selling it directly to the end user and other systems selling through their own exclusive e-currency Market Maker ( Omni pay for example ) or through an Independent Market Maker or e-currency Exchangers handling a range of Electronic Currencies.
These Exchangers are either automated or manually operated like Gold Age. Some community currencies, like LETS systems, work with electronic transactions. Cyclos software allows the creation of electronic community currencies.
Ripple monetary system is a project to develop a distributed system of electronic money independent of the currency.

Advantages

The e-currency transactions are picking up volume replacing cash or hard currency. The ever spreading reach of internet, online banking, credit and debit cards, online payments of bills and internet business are making paper money redundant in the developed societies. With banks extending customer specific online services such as money transfer, stock purchase and contributions to retirement schemes, e-currency has freed us from visiting a bank and standing up in a queue. Online bill payments and money transactions are very convenient for customers as well as the banks and other services.

Disadvantages

The e-currency, though fast and convenient, has some negative points too such as fraud, technical breakdown and loss of human touch. Hacking into bank accounts, frauds and stealing the personal details of customers are constant threats to e-currency. Software glitches and occasional power failures compound the problem with loss of records. For these reasons, a large section of population is still wary of embracing e-currency hampering its rapid growth.

Future Prospects

The e-currency focuses on the ability to spend it through secured credit cards, linked bank accounts that would be generally an internet enabled means of exchange and secure micro payment system in large corporations such as PayPal. To overcome the irritants of hacking, fraud and theft of identity, an enterprising company named DigiCash is working on a system of electronic coins issued to the user under his/her name or online identity and stored in one’s PC. All transactions are routed through the issuing company safeguarding the personal details. The future of e-currency is bright once the teething troubles of its security are taken care of. It is almost certain that our society, financial institutions and service sector will not revert back to paper currency. The e-currency has, therefore, only one direction to move- the forward direction.

Autor: Chris a.k.a NoProblem

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