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DigiCa$h: Money of the Future? or an Electronic Disaster?

DigiCa$h: Money of the Future? or an Electronic Disaster?. By: EDWARD ARTECHE MARLON EVANGELISTA. Introduction. Online money transactions are increasing exponentially Over the past few years, online shopping has gained popularity

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DigiCa$h: Money of the Future? or an Electronic Disaster?

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  1. DigiCa$h:Money of the Future?oran Electronic Disaster? By: EDWARD ARTECHE MARLON EVANGELISTA

  2. Introduction • Online money transactions are increasing exponentially • Over the past few years, online shopping has gained popularity • One website in particular comes to mind as far as e-commerce goes…

  3. www.eBay.com

  4. www.paypal.com

  5. Brief History • David Chaum and a colleague Rijkswatarstaat founded the company DigiCash • Early success with the use of smart cards • 1990 – Chaum developed eCash, which is synonymous with digicash • 1995 – Mark Twain Bank: First and only U.S. bank to accept eCash • 1998 – DigiCash files for bankruptcy

  6. Definition and Applications • Electronic store of monetary value • Usually stored on a technical device such as a smart card • Also sometimes stored in software

  7. Types of DigiCash • Software-based product: digicash is stored on the hard disk memory of a computer • Card-based product: value is stored on a hard physical device, such as a smart card • Software for using these smart cards are currently being made to be downloaded onto cellular phones and PDAs

  8. Types of DigiCash (cont’d) • Online • two interacting parties must be online • A third party, usually a bank or a digicash distributor is required to complete the transaction • Offline • No bank or other third party required to be the intermediary • This is what digicash should be and it is what is being aimed at as the future goes

  9. How does it work?

  10. Checks and Balances • The buyer • Protected against false accusations and invasion of privacy • The bank • Protected against forgery • The seller • Protected against the bank’s refusal to authenticate a note

  11. Benefits/Positives • For consumers • Convenience • No need to go to actual store • Easy to set up • Smart cards • Universal • Person 2 person • security

  12. Benefits/Positives (cont’d) • For businesses • Bring in new customers • Customers that are impatient • Increase chances of “impulse buys” • Small businesses can run their business completely online • No need for physical space

  13. Drawbacks/Negatives • Double spending • Possibility of duplicating money • “spending money twice” • Fairly new concept • Many companies have tried and failed • People are skeptical

  14. Conclusion • Must convince people to try something new • Must undergo a LOT of experimentation to ensure security and so that "good guys" stay ahead in the game • Possibility of replacing paper money • Universal currency would make international transactions easy • In order for digicash to hold up, every transaction must be flawless with no errors from sender to receiver • Convenience will win people over

  15. Links to sites that use eCash • www.ecashdirect.net • www.casinoaustralia.com • www.tcbk.com • www.49ercasino.com • www.cryptologic.com

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