Q:

What are the advantages and disadvantages of electronic cash?

A:

While electronic cash does provide a more secure means of storing and tracking money, it is not entirely immune to theft. There are a number of different advantages to digital money, but a similar number of disadvantages exist. In addition to security, it is also easier to store and move from one institution to another.

The benefits of digital currency include the ease of accounting it provides, and the universal nature of it. Money from one country can be transferred directly to another, via wire transfers, without any of it being lost in the process. However, one of the key drawbacks is the vulnerability of banking systems to electronic fraud and Internet security breaches. In the past, physical currency stored in a bank was only accessible by those bold enough to challenge the guards and break into a vault. Today, there is little physical risk involved in bank theft for those diligent enough to learn how to circumvent the computer security of a bank. In this case, accessing a virtual bank only requires keystrokes instead of the threat of physical injury. It's still illegal, carrying hefty sentences in most countries, but much more difficult to track and prosecute simply because it can be done from virtually anywhere.


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