Digital Cash

Digital Cash

In today's society, cash is rapidly becoming obsolete. Most of the transactions can now be done without cash. Credit cards are accepted everywhere, such as pay phones, grocery stores, and fast food restaurants. Debit cards are quickly replacing checks for many of our day to day purchases. You can even pay your monthly bills electronically by using a third party bill paying system authorized by your bank within your home computer. Moreover, there are quite a few transactions that cannot be completed with cash, including renting cars, many mail order purchases, and subscribing to an internet service provider. Digital cash is a development to aim to form payment means which gives the benefits of electronic payments systems with the privacy of physical cash.

In the past, money wasn't an issue because many people used bartering as a form of money. Different forms of money have become so advanced that even digital cash is taking over. Even though it is not on paper, it is much like cash. According to Brad Puffer, "money in your account is converted to a digital code, stored on a microchip, a pocket card, or on the hard drive of your computer, and can be used for anonymous transactions by any vendor who accepts it."(Puffer, 2002) Cash is really only necessary for small transactions, such as purchasing a morning paper, or buying a candy bar out of a vending machine.

Digital cash is much like money because it is anonymous. Anonymity assures the privacy of transaction on multiple levels. Beyond encryption, this optional untraceable feature of digital cash promises to be one of the major point of competition as well as controversy between the various providers.(Okamoto & Ohta, 1991) Digital cash may have complex problems as well as cash has now. People can use it to evade taxes or launder money. Money could flow directly between countries without being traced. Hackers would also be able to get the account information or "chip" information and steal someone's money or wealth. Moreover, what happens if a computer crashes or a "chip" malfunctions? Then there can be a total loss if it isn't traceable. The future belongs to superior private currencies and linchpin for successful digital cash ventures will undoubtedly be freedom in the unit of value. Once seeded, digital cash as the representation of binary value, will pave the