Disadvantages of E-Cash

We have till now seen the various advantages e-cash poses over other payment mechanisms. E-cash does have its own fair share of disadvantages though. The most significant is forgery. It is still possible to create and spend forged electronic cash. Though. with the advancement of technology and ongoing research, this has become more and more difficult. but still is possible.

Then as we had said earlier, anonymity and security create a trade-off situation. Because, e-cash in its real sense is not traceable, another large problem arises: money laundering. Money laundering would become very easy by showing false purchases and sales. Many such fraudulent activities are possible due to the flexibility international e-cash transactions provide. Taxation is another problem. Since traceability is difficult assessment of whom to tax becomes a problem. Although at present, no taxation laws have come up for business on the net, it can be regarded as a potential problem for the future.

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