Electronic Currency

Normally, cash is known as a mean of exchange and of storing value in various forms. Nowadays, internet becomes more important for the people in the world. As a result of recent proliferation of computers, telecommunication links and modern method of rendering payment are receiving a great deal of attention form people. The example of the modern method of rendering payment is electronic currency.

Electronic currency can known as electronic money, digital cash, digital money and etc. It typically means that currency with real value and which can be exchanged for traditional cash which is in the forms of coins and notes, is instead entirely virtually. It refers to money which is exchanged only electronically. Besides, electronic currency is designed to facilitate electronic commerce transaction. It only exists in the form of digital format and can be primarily based on the internet. Normally, electronic currency involves the use of computer networks, internet and digital stored value.

There are two types of electronic currency:
( 1 ) Identified e-money
This type of electronic currency contains the information revealing the identity of the people who originally withdrew the money from the bank. Besides, identified e-money enables the bank to track the money as it moves through the economy.

( 2 ) Anonymous e-money
The function of anonymous e-money is like the real paper cash. When anonymous e-money withdrawn from an account, it can be spent or given away without leaving a transaction trail. It can’t be traced as it moves around the economy and the owner of the cash can not be identified.

There are two further varieties of each type of e-money:
( 1) Online e-money
Online e-money requires a third party such as a bank or clearing house when carrying out the transaction. This is similar to credit-card clearing mechanisms at the point-of-sales in supermarkets.

( 2 ) Offline e-money
Offline e-money does not require a third party during the conduct of a transaction, analogous to exchange of cash for goods. It is the most complex form of e-money and true digital cash takes the form of offline anonymous e-money, especially when it comes to solve the double-spending problem.

Examples of electronic currency:
( a ) PayPal
PayPal is an online payments and money transfer service that allows people to send money via e-mail, phone and etc. A PayPal account can be funded with an electronic debit from a bank account or by a credit card. The receipt of a PayPal transfer can either request a check from PayPal, establish their own PayPal deposit account or request a transfer to their bank account.

( b ) Chipknip
Chipknip is the electronic cash system that used in the Netherlands. It is an electronic pursues which allows us to pay via bank or credit card as a sort of loadable wallet in-a-chip. Chipknip differs from other electronic payment system. It is because people have to change it with money before people use it to conduct a transaction.