Digital Cash refers to a system in which a person can securely pay for goods or services electronically without necessarily involving a bank to mediate the transaction. It exhibits properties similar to physical currencies but can allow for instantaneous transactions and borderless transfer-of-ownership. it is also a system of purchasing cash credits in relatively small amounts, storing the credits in your computer, and then spending them when making electronic purchases over the Internet. Digital cash can also be stored on an electronically sensitive card.
Ideal properties of a Digital Cash
Suppose we will show transactions of two persons A, B. these transactions deal with digital cash which the properties are
Secure A should be able to pass digital cash to B without either of them or others, able to alter or reproduce the electronic token.
Anonymous A should be able to pay B without revealing her identity, and without B revealing his identity. Moreover, the Bank should not know who A paid or who B was paid by. Even stronger, they should have the option to remain anonymous concerning the mere existence of payment on their behalf.
Portable The security and use of digital cash are not dependent on any physical location. The cash should be able to be stored on disk or USB memory stick, sent by email, SMS, internet chat, or uploaded on web forms. Digital cash should not be restricted to a single, proprietary computer network.
Two-way Peer-to-peer payments are possible without either party required to attain registered merchant status in contrast with today’s card-based systems. A, B, C, and D share an elaborate dinner together at a trendy restaurant and A pays the bill in full. B, C, and D each should then be able to transfer one-fourth of the total amount in digital cash to A.
Off-line capable The protocol between the two exchanging parties is executed off-line, meaning that neither is required to be host-connected in order to proceed. Availability must be unrestricted. A can freely pass the value to B at any time of day without requiring third-party authentication.
Wide acceptability it is well-known and accepted in a large commercial zone. With several digital cash providers displaying wide acceptability, A should be able to use her preferred unit in more than just a restricted local setting.
User-friendly The digital cash should be simple to use from both the spending perspective and the receiving perspective. Simplicity leads to mass use and mass use leads to wide acceptability. A and B should not require a degree in cryptography as the protocol machinations should be transparent to the immediate user.