Cyber-Bargains

Money originally is in the physical substance ie, gold, silver and copper. Today, the normal transaction is pay in the form of notes and coins. Besides from the notes and coin currency, currency now has slowly emerged into the form of electronic currency with the rapidly changing computerized world.

Electronic currency refers to the money which is exchanged only electronically. Obviously, this will involve computer networks, internet, and digital stored value. Direct deposit and electronic fund transfer are the examples of electronic currency. Electronic currency will function on the principle that every deal affects only two sides, for instance one is payer, and another is the receiver.

In general, there are two types of electronic currency which are online and offline electronic currency. Online electronic currency means the users need to interact with bank through modem or network in conducting a transaction with a third party. Offline means the transaction conducted need not directly involve a bank. The bank can know what everyone bought, where they bought it, when they bought it, and how much they paid for both online and offline electronic currencies.

In traditional currency system, people need to carry a bag which is full of currency notes, using vehicles for transferring, depositing or withdrawal of funds from one place to another. They may fear of getting lotted when carry this bag. On the other hand, electronic currency system need not fear of getting lotted because the transaction ie transfer fund is carried out online and not physical substance. This can increase in public confidence in using the electronic monetary system.

Other benefits of electronic currency system are convenience, and it able to increase efficiency of transactions ie shorten the transfer fund period. Besides these, it also can create new business opportunities with the expansion of economic activities on the Internet.

Although electronic currency system can provide many benefits as stated above, there is a major disadvantage to electronic currency which is security. For instance, the user of electronic currency system is misplaces his/ her private key. There is a possibility that a person may use it to withdraw funds from the bank. With the private key given, the person is able to withdraw the money. The money withdrawn will never be able to recover back from bank.