Digital Cash

A system that allows a person to pay for goods or services by transmitting a number from one computer to another. Like the serial numbers on real dollar bills, the digital cash numbers are unique. Each one is issued by a bank and represents a specified sum of real money. One of the key features of digital cash is that, like real cash, it is anonymous and reusable. That is, when a digital cash amount is sent from a buyer to a vendor, there is no way to obtain information about the buyer. This is one of the key differences between digital cash and credit card systems. Another key difference is that a digital cash certificate can be reused.

Digital cash transactions are expected to become commonplace by the year 2000. However, there a number of competing protocols, and it is unclear which ones will become dominant. Most digital cash systems start with a participating bank that issues cash numbers or other unique identifiers that carry a given value, such as five dollars. To obtain such a certificate, you must have an account at the bank; when you purchase digital cash certificates, the money is withdrawn from your account. You transfer the certificate to the vendor to pay for a product or service, and the vendor deposits the cash number in any participating bank or retransmits it to another vendor. For large purchases, the vendor can check the validity of a cash number by contacting the issuing bank.

Webopedia Staff
Webopedia Staff
Since 1995, more than 100 tech experts and researchers have kept Webopedia’s definitions, articles, and study guides up to date. For more information on current editorial staff, please visit our About page.

Related Articles

Human Resources Management System

A Human Resources Management System (HRMS) is a software application that supports many functions of a company's Human Resources department, including benefits administration, payroll,...

How To Defend Yourself Against Identity Theft

Almost every worldwide government agency responsible for identity theft issues will tell you the same thing: The first step to fighting identity theft is...

Infographic

An infographic is a visual representation of information or data. It combines the words information and graphic and includes a collection of imagery, charts,...

Phishing

What is phishing? Phishing is a type of cybercrime in which victims are contacted by email, telephone, or text message by an attacker posing as...

ScalaHosting

ScalaHosting is a leading managed hosting provider that offers secure, scalable, and affordable...

HRIS

Human resources information system (HRIS) solutions help businesses manage multiple facets of their...

Best Managed Service Providers...

In today's business world, managed services are more critical than ever. They can...