Electronic currency

Introduction

Electronic currency, or e-currency, is an approach of trading currencies electronically through brokerage account. E-money, electronic cash, electronic money, digital money or digital currency are some of the terms of e-currency. Examples of e-currency are Electronic Fund Transfer and direct deposit. Electronic Fund Transfer is type of computer-based system to conduct financial transaction through online. Direct deposit is an electronic transfer of a payment directly from the account of the payer to the payee. E-currency was officially accepted in 1999 by the countries of the European Union to simplify business by eliminating the exchange rates.

Advantage

E-currency allows people to make money on the Internet using their personal computer. E-currency allows people to start business or trading electronically with low cost. It only needs as low as few dollars to start e-currency trading or do business. It is suggested to the beginners that they should start with few dollars investment so that they can learn how the e-currency works. It depends to you whether you want to increase the investment. You will not spending too much on investment as the e-currency gave many chances to earn money.

Besides, banks offering many services whereby a customer can transfer funds, purchase stocks, contribute to their retirement plans and offer a variety of other services without having to handle physical cash or cheques. Customers do not have to wait in lines and this provides a lower-hassle environment. In addition, debit card and online bill payments allows immediate funds transfer of funds from an individual’s personal account to a business account without any actual paper transfer of money.

Disadvantage

Although there are some benefits of e-currency, there are also many significant disadvantages. These include fraud, failure of technology, possible tracking of individuals and loss of human interaction.

Fraud over digital cash has been a pressing issue in recent years. Hacking into bank accounts and illegal retrieval of banking records has led to a widespread invasion of privacy and has promoted identity theft.

There is also a pressing issue regarding the technology involved in digital cash. Power failures, loss of records and undependable software often cause a major setback in promoting the technology.

Privacy questions have also been raised; there is a fear that the use of debit cards and the like will lead to the creation of a global tracking system by the banking industry. Some people are working on anonymous e-cash to try to address this issue. The issue of providing anonymity to users itself introduces more problems, however; there is the distinct possibility that a fully anonymous digital cash system could permit the "perfect crime" - i.e., where a criminal uses someone else's electronic cash to make a payment, but cannot be traced - to occur. For this reason, 'revocable anonymity' is a suggested solution: a user is fully anonymous until they commit some crime, at which point authorization is given for their identity to be revealed. However, critics of this policy point out that the anonymous users will never be caught and held trial (thus their identity will never be revealed) without tracing.

Future evolution

The main focuses of digital cash development are 1) being able to use it through a wider range of hardware such as secured credit cards; and 2) linked bank accounts that would generally be used over an internet means, for exchange with a secure micropayment system such as in large corporations (PayPal).

Furthering network evolution in terms of the use of digital cash, a company named DigiCash is at the focus of creating an e-cash system that would allow issuers to sell electronic coins at some value. When they are purchased they come under someone’s own name and are stored on his computer or under his online identity. At all times, the e-cash is linked to the e-cash company and all transactions go through it, so the e-cash company secures anything that is purchased. Only the company knows your information and will properly direct purchases to your location.

Theoretical developments in the area of decentralized money are underway that may rival traditional, centralized money. Systems of accounting such as Altruistic Economics are emerging that are entirely electronic, and can be more efficient and more realistic because they do not assume a zero-sum transaction model.

Below are selected e-currency companies:

1. E-bullion - e-Bullion® is electronic bullion: international electronic currency fully backed by physical precious metals stored on behalf of account holders in Treasury Grade bullion storage facilities.
2. E-gold - The leading e-currency payment systems backed by physical gold.
3. Liberty Reserve - Liberty Reserve is an online payment system and provider of digital gold currency (LR-gold)
4. Moneybookers – Wallet for Internet which allows people to shop and send money worldwide.
5. Pecunix - Digital currency operator. Pecunix is backed by gold, and offers an advanced and secure API for merchants and users.

Related Links:

Benefits of E-Currency Trading
Electronic Currency Trading
Electronic Money
Lists of Online Payment Systems and Credit Card Merchants
Overview Electronic money