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Barter system Coins and Paper notes Checks ATM

ECash is a computer generated Internet

based system which allows funds to be


transferred and items to be purchased by credit card, check or by money order, providing secure on-line transaction processing.

Security Privacy Portability Transferability Divisibility

A smart card is a plastic card embedded with a (ISO standard) integrated circuit(IC) chip. The chip stores information while protecting it from unauthorized. It is also possible to build in high levels of computing power and security, since smart cards IC has a computer architecture.

Simple memory cards. These cards act as a storage medium. They carry an application code and a simple mechanism to specify the issuer of the card. Hard wired logic cards. These cards contain memory and processor and have data processing capabilities which permits the dynamic storage management.

Coin-transporting technique Balance-counter technique

On-line

Individual does not have possession personally of electronic cash Trusted third party, e.g. online bank, holds customers cash accounts Customer holds cash on smart card or software wallet Fraud and double spending require tamper-proof encryption

Off-line

Online electronic money

Anonymity and untraceability can be maintained: User Id's are kept highly confidential. No issues regarding "Double spending": Real-time checking of all transactions makes the possibility of multiple expenditures negligible. No requirement of additional secure hardware: Existing POS (point of sale) hardwares can be updated and used.

Offline Electronic Money

Portable: This system is fully offline and portable. Anonymity unless double spending: The user is anonymous unless he commits a double expenditure. Detection of Double Spender: The bank can effectively detect a double spender. Frequent synchronizations are not required: The bank doesn't need to synchronize its servers very often. This is mostly done via batch updates.

For the Users: Convenience. Security Intractability For the Bank: Less Processing Security Handling

For the Retailer: Time saving Transaction Costs

Online Electronic Money Communication Overheads Massive Databases Synchronization Offline Electronic Money Prevention may not be Immediate Implementation Expenditure

Global Disadvantages Safety Algorithm Physical Securities Economic Disruption Users Legal problems

The main focuses of electronic money development are: being able to use it through a wider range of hardware such as secured credit cards linked bank accounts that would generally be used over an internet means, for exchange with a secure micropayment system such as in large corporations .