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Then and Now: Electronic Money and Cryptocurrency

The world’s largest cryptocurrency today continues to disrupt different regions and industries. It has been attracting attention among major firms as well as conventional investors. Indeed, adopting cryptocurrency has been contributing to changes that society did not expect to see a decade ago. But before there were Bitcoin and other cryptocurrencies today, we already had electronic money (or e-money).

E-money and cryptocurrency share few similarities as they are both considered digital. However, people must not get confused with these two systems because they are extremely different in many ways. In this article, we will sum up the key differences between the two to help you quickly distinguish them from one another.

History of Electronic Money and Cryptocurrency

The inception of e-money may be traced back to the growing usage of computers. It all started in the 1960s when IBM and American Airlines developed the SABRE (Semi-Automatic Business Research Environment) system, which allowed American Airlines offices to be equipped with terminals connected to telephone lines and allowed agencies to check flight times, seat availability, and then make reservations electronically that could be paid using a credit system.

The late 1990s then paved the way for e-money when Amazon.com and PayPal were launched. These online platforms made online money payments straightforward, with no fear of credit card data theft. The services offered by PayPal, which include offering a virtual account to the customers and using email addresses to receive and send money, marked e-money’s unique beginning.

Meanwhile, many people believe that cryptocurrency is an idea that was invented and released in the previous decade or so, but cryptocurrency actually dates back to 1983. It began with a cryptographer named David Chaum, who developed the first brand of digital currency called eCash.

For early advice to the reader, electronic money and eCash are also different from each other. Further details about this will be discussed in the next paragraphs.

A few years later, eCash was followed by DigiCash. Though the word cryptocurrency was not created until the late 1990s, Chaum’s early efforts into the field laid the groundwork for future iterations of this new means of trading products and services. Bitcoin’s anonymous developer, Satoshi Nakamoto, then entered the picture and introduced today’s most well-known cryptocurrency in 2008.

Definition: Electronic Money and Cryptocurrency

 E-money refers to a currency that is kept electronically on electronic systems and digital databases and is used to make electronic transactions easier for consumers. Fiat currency backs the value of the electronic currency. It is different from eCash, which was actually an electronic platform that allowed people to send money anonymously.

Cryptocurrency, like e-money, does not exist in physical form and is usually not issued by a central authority. It is a digital asset meant to serve as a means of exchange, and the individual coin ownership records are maintained in a ledger that exists in the form of a computerised database employing strong encryption.

Benefits: Electronic Money and Cryptocurrency

E-money and cryptocurrency offer same several benefits to the global economy, including:

  • Increased security and transparency

E-money provides a higher level of protection. Advanced security procedures, such as authentication and tokenisation, are used to avoid the loss of personal information when dealing online.

Cryptocurrency allows you more control over the security of your assets by eliminating the need for a middleman. You do not have to be concerned about losing money due to a bank’s mistake.

To invest and trade cryptocurrency, you can check the Bitcoin Up website.

  •  Increased flexibility and convenience

With a single click of a button, transactions via e-money may be entered from any location at any time. It eliminates the inconvenient and time-consuming process of receiving payments in the mail.

Transactions made with cryptocurrencies, likewise, are quicker, easier, and frequently cheaper than using conventional currencies. Especially if you are sending money abroad. It can be used anywhere and anytime. Cryptocurrencies fluctuate, but exchange rates have a minimal impact on them.

  • Historical record

E-money simplifies the process of tracking back payments and aids in the preparation of comprehensive expenditure reports, planning, and other tasks.

Cryptocurrencies are based on blockchain technology, which also helps you trace all of your transactions and know precisely where your money goes.

Key Differences: Electronic Money and Cryptocurrency

Using the infographics made by cgap.org, here are the defined differences between the two systems:

  • In terms of accessibility, e-money can be accessed to specialised software that functions on PCs, laptops, tablets, or mobile phones and Internet connectivity is not required to conduct transactions while cryptocurrencies are only largely limited to the Internet connection.
  • In terms of value, e-money is an equal amount to fiat currency while, cryptocurrency is determined by supply and demand.
  • In terms of customer ID, e-money has Financial Action Task Force standards applied, while cryptocurrency allows the user to stay anonymous.
  • In terms of production, e-money is digitally issued by the central authority against receipt equivalent value of fiat currency while cryptocurrency is mathematically generated by peer network.
  • In terms of regulator or oversight, e-money is typically regulated by the central bank while cryptocurrency has none, although regulators globally are exploring this.


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