Pros and Cons of Electronic Cash Transfer

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E-money is a new evolutionary step for the global financial system. E-money is not simply digitized fiat funds but a whole new realm with its rules, trends, and market.  

E-money operates on different levels, from buying groceries and paying for a resume service to professional business and high-rank companies transactions. Digital commerce helps small businesses to grow. IT specialists prove new concepts in the software and hardware domain for digital money. Yet, like every new invention, digital money comes with disadvantages and challenges. This article explores what perspectives and issues current digital cash have.   

Types of Digital Money  

Digital money is the electronic storage of monetary value on a special device. It can be used for making payments to entities other than digital money owners. E-money is not a solitary mass and does not represent a single currency. There are:  

  • Digital fiat money.  
  • Cryptocurrencies. 
  • Digital trading assets.  
  • Other tokens.  

Digital fiat money is the most common type of digital money. This type of money is regular cash converted into electronic format. Credit cards are the most common way to operate digital fiat money.   

Cryptocurrencies are a new technological trend that becomes more popular each year. Blockchain technology is the core of cryptocurrencies. Transactions via cryptocurrencies are safe and transparent. They do not require a third trusted party.   

Bitcoin is one of the most well-known cryptocurrencies on the market. However, many others exist, such as Litecoin, Dogecoin, and Ethereum. Crypto-wallets are a means of operation of cryptocurrencies.  

A crypto wallet is a protected digital storage with a unique identifier. These factors mean that all operations related to cryptocurrencies have almost impenetrable security.  

Digital trading assets are online money similar to fiat money. However, it is companies’ actions, indices, and futures contracts instead of cash. Online exchanges are not new, but they serve as a development stage for the more common and widely spread e-money.  

Finally, new types of digital currencies are in development. Nonfungible tokens (NFTs) became a new trend in 2021 and can be characterized as electronic money. Blockchain technology opens numerous possibilities, and new types of e-money wait for their time. 

Pros and Cons of Electronic Cash Transfer

Advantages of Electronic Cash  


Safety is one of the vital advantages of digital money. Large sums of money can cover large distances within hours without the risks of regular transportation. Besides, the online protocols of security protect the operations from outside intrusion. E-cash allows making big transactions with low risks involved. Bank employers and employees can be sure that their data will not be compromised.  


Operations with e-cash transferring occur within several hours, and if it is a global banking transaction – it takes several days. Yet, it is an unprecedented speed. Big-scale business work much faster due to hardware’s processing power for digital currencies.   

Decentralization for Cryptocurrencies 

The decentralized nature of cryptocurrencies makes them immune from political turbulences. However, a cryptocurrency depends on blockchain capabilities and mining power. All other uncertainties remain behind.   

Flexibility of Operations   

It is easy and intuitive to make electronic cash transfers. Many companies specialize in creating software and hardware for work with digital currencies. In addition, there are links between bank cards and smartphones, crypto-wallets, and accounts on online exchanges. These accomplishments make e-cash transfer a preferable way for regular operations.   

Increased Stability   

Together, all these benefits create a single, most valuable advantage of digital money – stability. As a result, E-cash is free from political turbulence, the threat of physical destruction, and separate economic sectors.  

Transfers of digital money will cover more needs and requests worldwide. Moreover, they can guarantee the possibility of monetary operations even in isolated parts of the world.  

Cons of Electronic Cash Transfer

Disadvantages of Electronic Cash Transfers  

Each new technology brings challenges alongside benefits, and e-cash is no exception. The same features that make digital money a unique and safe item create additional issues.  

Criminal Activity  

Due to the elusive nature of digital money, it is hard to track down illegal activity with it. In addition, only owners of the cryptocurrencies have access to the data flow of the transaction. While it is hard for criminals to hack this data flow, they can still use their benefits.  

Therefore, digital money has become a safe and hard-to-trace tool for crime operations.   

Legally Grey Zone  

While digital fiat money became a solid part of a modern economic system, cryptocurrencies are in the gray zone. Due to its decentralized nature, it is hard for governments to regulate cryptocurrencies.   

As a result, the general public cannot receive all benefits of decentralized money. Besides, cryptocurrencies are associated with the dark web, and none of the judicial bodies want to process this challenge. As a result, cryptocurrencies remain a gimmick instead of a full-fledged part of the world’s economy.  

Hardware Limitations  

Despite being a prospective technology, digital money requires massive computing power. Besides, regular digital money starts to share the same vulnerabilities as any other data stored on a single server.  

E-cash can make transportation of funds from place to place easier and safer. Yet, hardware storage has become a new object of concern. If something happens with storage or a hacker breaks into the banking system, digital money becomes easily compromised.  

Blockchain technology, which cryptocurrencies use, requires too many resources also. So while mining the currency makes the while worthwhile, regular usage of blockchain will draw more resources.  

Finally, the amount of data stored and processed in the blockchain is a subject of discussion. Right now, the technology’s processing speed leaves much to desire.   

E-cash Transfers are Not a Remedy  

In sum, the disadvantages do not outweigh the benefits. Yet, it is too early to call digital money a new face of the world’s money. Right now, we see a background for future development. Existing digital money is concepts and prototypes. They should go through many iterations before becoming full-fledged funds of the future.   

Bottom Line   

Modern digital money comes in different shapes and forms. From regular, digitized fiat money to specific blockchain tokens, e-cash helps to cover a lot of challenges. Money transfer and safety, speed of operations, and overall stability make e-cash a valuable tool in the modern economic system.   

At the same time, there are issues related to hardware limitations and security in cyberspace. Nevertheless, digital money is the future of the world’s economy, and it is only a matter of time before they replace regular money.  


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