This eliminates banks as an intermediary. In this respect, e-cash is indeed like paper money. But the more general the use of e-cash becomes, the greater concern must be over problems of security and privacy as well as problems associated with paper money such as counterfeiting. E-cash allows a number of convenient solutions to these problems. Encryption and unique coding, for example solve many of the security and duplication problems which are possible in theory.
Privacy requires that e-cash be essentially untraceable.
That is, there should be no record of who spent what unit for which transaction. New technologies are making this possible as well, enabling consumers to create anonymous units of currency which their banks can validate but which they can then render untraceable. The bank becomes essentially blind to the exact user of the currency. It is too early to say whether e-cash will eventually replace paper money and credit cards, but the growth potential of the utility is enormous. Email This Page to a Friend.