Electronic money (also referred to as e-money, electronic cash, electronic currency, digital money or digital cash) refers to money that is exchanged only electronically. Typically, this requires the use of a computer network, internet and digital stored value systems.
Electronic funds transfer (EFT) and direct deposit are also examples of electronic money. While electronic money has been an interesting problem in cryptography, the use of digital cash has been relatively low scale.
Technically this form of money is a representation, or a system of debits and credits, intended (but not limited to) trade in securities as part of a system, or as a standalone system and can be online or not.
A private currency may use gold to provide additional security such as digital gold currency. A digital currency system can be fully backed by gold (like e-gold and c-gold) or not, or both systems (like e-Bullion and Liberty Reserve).
In addition, some private organizations such as the Armed Forces of the United States use private currencies such as the Eagle Cash.
Many electronic systems sell their currencies directly to end users, such as Paypal and WebMoney, but other systems such as e-gold, sell only through third parties such as currency exchange houses digital.
In the case of Octopus Card in Hong Kong, it works similar to bank deposits. After Octopus Card Limited receives money in trust of users, the money is deposited in banks, which is similar to the method of debit cards where the issuing banks redeposit the money to the central banks.
Some local currencies, and local exchange systems work with electronic transactions. Cyclos Software allows electronic creation of local currencies. While the Ripple system is a project to develop a distribution system of electronic money independent of local currency.
Offline anonymous e-money
With offline anonymous e-money, the trader does not have to interact with the bank before accepting money from the user. Instead you can collect multiple coins spent by users and then deposit them in the bank. In principle this can be done offline, ie, the merchant could go to the bank with a storage media to exchange electronic funds.
Off-line electronic cash systems also have the need to guard against possible deception of traders, ie traders who wish to deposit a coin twice (and then blame the user).
To promote the evolution of the network in terms of using digital cash, a company called DigiCash is in the spotlight with the creation of an electronic cash system that allows issuers to sell electronic currency to some value. At any time, electronic money is linked to the e-cash company and all transactions are conducted through it, so the e-cash company secures everything you purchase. Only the company holds the buyer’s information and directs the purchase to your location.
Theoretical developments in the field of decentralization of the traditional centralized money are underway. Accounting systems that are emerging, such as altruistic Economics, are entirely electronic, and may be more effective and realistic model that do not assume a zero-sum transaction.