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Electronic Cash (E-Cash) and it’s ideal Characteristics | Fundamentals of E-Commerce

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electronic cashWhat is electronic cash (e-cash), digital cash?,
Fundamentals of E-commerce Notes | Sixth Semester,
BSc.CSIT | Tribhuvan University (TU)

Electronic Cash
Electronic cash is a digital money that can be used to conduct paperless transactions without resorting to the use of paper or coin currency. It is defined as paperless transaction to describe financial exchanges that do not involve the physical exchange of currency. Instead, monetary value is electronically credited and debited. This financial transaction is commonly conducted between parties on the Internet and those between parties in long distance or different countries.

There are a number of advantages of electronic cash. One of them is that it eliminates the apprehension that many people feel about carrying and exchanging paper currency. Another advantage of electronic cash is that it is usually easily converted to another currency, making travelling and international business substantially easier.

Ideal properties of a Digital Cash system
Some of the ideal properties of a digital cash system are as follows;

  • Secure: Alice should be able to pass digital cash to Bob without either of them, or others, able to alter or reproduce the electronic token.
  • Anonymous: Alice should be able to pay Bob without revealing her identity and without Bob revealing his identity. Moreover, the bank should not know who Alice paid or who bob was paid by. Even stronger, they should have the option to remain anonymous concerning the mere existence of a payment on their behalf.
  • Portable: The security and use of the digital cash is not dependent on any physical location. The cash should be able to be stored on disk or USB memory stick, sent by email, SMS, internet chat, or uploaded on web forms. Digital cash should not be restricted to a single, proprietary computer network.
  • Offline Capable: The protocol between the two exchanging parties is executed offline, meaning that neither is required to be host-connected in order to proceed.
  • Wide Acceptability: The digital cash is well-known and accepted in a large commercial zone. With several digital cash providers displaying wide acceptability, Alice should be able to use her preferred unit in more than just a restricted local setting.
  • User friendly: The digital cash should be simple to use from both the spending perspective and receiving perspective. Simplicity leads to mass use and mass use leads to wide acceptability. Alice and Bob should not require a degree in cryptography as the protocol machinations should be transparent to the immediate user.
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