Electronic Currency

Electronic currency also knows as e-money, electronic cash, digital money or digital currency. Electronic currency refers to money or scrip which is exchanged only electronically. Electronic currency is simply its own form of currency that has been developed and utilized on the internet. It’s also known as ‘Internet money”. Which mean the currency used on the internet related field just like email. Normally, this involves use of computer networks, the internet and digital stored value systems. Electronic currency also includes internet-based purchase and sales transactions involving almost anything to be safely conducted at lightning speed. A private currency may use gold to provide extra security, such as digital gold currency.

Electronic currency is precious metal-backed internet currency. Individual open an account to deposits money with an online electronic currency company that then converts the amount into gold bullion. The account holder can transfer ownership of some or all of that gold into someone else's electronic currency account. Ownership can be repeatedly transferred. Electronic currency has been widely used by perpetrators of pyramid scams. Swindlers demand payment in e-currency because, unlike with checks or credits cards, the charges clear instantly and cannot be cancelled. Experts estimate that about half of e-currency transactions are related to scams or online games.

An electronic currency system may be fully backed by gold (like e-gold), non-gold backed, or both gold and non-gold backed. Two major types of electronic currency their backed base. One is backed by precious metal such as e-gold is backed by gold .Another type of electronic currency is backed by hard currency like Pay Pal. Both of them are all called electronic currency.

Pro and Con about different types of Electronic currency

Electronic currency backed by hard currency is widely used in the internet as the medium of internet related commercial actions. That will provide users a quick, simple and safe way for shopping instead of showing their credit card information to merchant who they do not know. How been restricted in some regional area which is defined by the currently they choose to be backed. The major reason is the floating character of exchange rate between the hard currency and the local currency often used by the internet users. Most of the electronic currency companies backed by hard currencies become big giant that is just because the number of this kind of currency user is big enough .For example Pay Pal. But no one will guarantee if Pay Pal can do the same good job in the future hard currency such as RMB in China if Pay Pal does not provide RMB base payment service.

References:

- http://ezinearticles.com/?E-Currency-Exchange:-The-First-Bonanza-of-the-21st-Century?&id=62820
- http://www.adl.org/internet/e_currency.asp
- http://en.wikipedia.org/wiki/Electronic_money
- http://giexc.com/

Prepared by: Koh Kah Wang