Electronic Currency

Wednesday, February 18, 2009

E-currency is a sort of online version of "warehouse banks," which similarly converted account holders' deposits into gold or silver bullion stored in the bank. It involves the use of computer networks, internet and digital stored value systems. It may only exist in the cyber world, but that is nothing new about it.


Electronic Fund Transfer (EFT) are one of the example of electronic currency. EFT refers to system that provides for the interbank clearing of electronic payment for participating financial institutions. To open an electronic currency account, people "deposits" money with an online e-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 e-currency account by using the internet. Ownership can be repeatedly transferred.


The main focuses of electronic currency development are it able to use through a wider range of hardware such as secured credit cards; and the user account linked bank accounts that would generally be used over an internet means, for exchange with a secure miropayment system such as in large corporations.


By using this system, it can provide many benefits such as convenience and privacy, increased efficiency of transactions, lower transaction fees, and new business opportunities with the expansion of economic activities on the Internet.


E-currency has been widely used by perpetrators of pyramid scams. Swindlers demand payment in e-currency because it is different 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.


The most popular e-currency service is e-gold, operated by Gold & Silver Reserve, a Florida-based company. It claims more than 200,000 accounts and more than $14 million in currency. A January 2002 account reported that its clients made 8,600 transactions daily. There are also other electronic currency website such as payloadz.com, paypal.com, etc.