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Disadvantages of Digital Cash (2)Filed Under: General

4) Customer selection criteria
Aspects of customer eligibility could become more technology based. For instance, being unable to use a personal computer could mean being denied certain services. Users need to perform difficult and different procedures in order to participate in it in some cases.

5) How and where would taxes be levied and what would be an appropriate global standard?
It is feasible that taxation of digital cash could be circumvented. And neither the World Trade Organization nor the U.S. has much will to tax network trading. Elsewhere in the world, the stance on the issue varies.

6) What could be done to combat high crime?
High crime such as counterfeiting will be significantly more difficult to pursue in the digital financial realm than it has been traditionally (Winer, 2002). At the consumer level as well there are a number of serious security concerns associated with IC-type financial transactions, including the ease with which an IC card can be lost or stolen, not to mention the possibility of its use in cash laundering, which has been noted before. Despite the privacy advantage of using digital cash, IC-type transactions are not all that widespread (Berger et al., 1996). But there is a serious crime risk among network-type transactions because of the sheer volume of them4.

7) The issue of user privacy
Privacy is a difficult issue as it is inseparable from security. Hackers have also aimed at collecting information and using it fraudulently. The principal drawback of etransactions is the lack of privacy features associated with traditional cash transactions. The anonymity that can be achieved by dealing in cash is missing. But blinding causes another problem. How does the bank identify double-spenders
if the coin-holder can’t be identified? Essentially, the balance between individual financial privacy rights and legitimate law enforcement interests is a problem. The battle that emerges is between the privacy afforded to a consumer by means of anonymous digital cash verses the desire of law enforcement to ferret out crime. The fact of complete anonymity guarantees that some money laundering will be easier to pull off.

Taken From: 10 Minute Guide to Conducting a Job Interview