How to make electronic money on the Internet, Electronic Money Definition
What is Digital Cash?
Money in your bank account is converted to a digital code. This digital code may then be stored on a microchip, a pocket card like a smart cardor on the hard drive of your computer. The concept of privacy is the driving force behind digital cash.
The user of digital cash is assured an anonymous transaction by any vendor who accepts it. Your special bank account code can be used over the internet or at any participating merchant to purchase an item.
Everybody involved in the transaction, from the bank to the user to the vendor, agree to recognize the worth of the transaction, and thus create this new form or exchange. How does Digital Cash work? This example shows how digital cash might work through a banking institution.
The bank creates a digital bank note by signing a message which specifies the serial number with a primary or public key and value of the note, and sends it to Person A. Person A, as he withdraws it, uses Chaum's technique A Cryptography technique to alter the serial number so that the dash course will not recognize the note as being from this withdrawal.
This note is now returned to the bank with the new serial number. The bank now has a note with a new serial number.
Person A then pays Person B electronically by sending the bank note to him. Person B checks the note's validity by decrypting using the bank's public key to check its signature new serial number validity. Person B then sends the note to the bank, which checks the serial number to confirm that this bank note hasn't been spent before.
The enabling how to make electronic money on the Internet merely checks the new serialized key account for the amount of the transaction and transfers the money by sending out a depository notice.
Person B using the same encrypting technique returns the depository notice with the new serialize account.
The enabling bank does not know who the merchant is only that money is available for payment. In some respects, this is a debit card transaction with no information other than the amount of the transaction.
All initial depositor information is in the primary key account not the password account. Special software to enable these dual track procedures was developed by Digicash.
Quick links addclose The digital currencies story is a continuation of the long-running saga of economics, markets, and commodity exchange in human society. With the constant rise of the global network, we have witnessed many global services becoming widely accepted and in a way changing by adding to our experience of mutual interaction.
However this venture was not successful, nor was it successful for its successor corporation, CyberCash, Inc. What is the Future Vision for Digital Cash? The future vision is that Digital Cash be a true Internet e-commerce structure with virtual banks created solely for the purpose of transactions clearing.
Electronic money refers to money that exists in banking computer systems that may be used to facilitate electronic transactions. Although its value is backed by fiat currency and may, therefore, be exchanged into a physical, tangible form, electronic money is primarily used for electronic transactions due to the sheer convenience of this methodology. Key Takeaways Electronic money is currency that is stored in banking computer systems. Electronic money is backed by fiat currency, which distinguishes it from cryptocurrency.
The unit of money envisioned would not be limited to a cash equivalent of a unit of money from a specific country, but instead would be some Electronic Digital Equivalent Unit EDEU. At the time the initial notes would be issued from the enabling bank the EDEU, would be set.
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Thereafter all transactions would be in the EDEU. There is some resistance to this from governments.
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In this system, an entity other than a governmental unit would in effect be issuing money. Governments are concerned about its possible effects on the stability of financial markets, its effects on monetary policy, its effects on consumer protections such as our FDIC, and FSLIC programsand possible criminal activity effects.
Most experts believe that the use of the internet for electronic transactions and the use of digital cash will rapidly how to make electronic money on the Internet the next ten to twenty years, but that a fully integrated international unit of currency approach will not happen any time soon. In the near future it seems that financial transactions will continue in the same financial market clearinghouse that is in use for current e-commerce systems.