Essay on Digital insecurity
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I. INTRODUCTION
In today's society, cash is quickly becoming obsolete. The vast majority of transactions can now be completed without cash. If a person has direct deposit, they can directly deposit their paycheck into their bank account. Using their home computer, that person can pay their monthly bills electronically by using a third-party bill paying system authorized by their bank. Credit cards, once reserved for major purchases, are now accepted at grocery stores, fast food restaurants, pay phones, and coffee shops. Debit cards are quickly replacing checks for many of our day-to-day purchases. There are quite a few transactions that cannot be completed with cash, including renting cars, many mail order purchases, and subscribing to an Internet service provider.
In a typical day, cash is really only necessary for very small transactions, such as purchasing a morning paper, or buying a candy bar out of a vending machine. These "micro-transactions"{1} do not represent a significant enough exchange of value to cover the transactional costs of accepting credit or debit cards. A person still needs to carry enough cash for these micro-transactions. Currently, the way to get cash is to personally go to an automatic teller machine (ATM) for a withdrawal. "Digital cash,"{2} stored on "smart cards"{3} or personal computers, promises to make micro-transactions possible in both the everyday world and in cyberspace.
II. IS DIGITAL CASH NECESSARY?
The need for digital cash closely parallels the need for regular cash. Most people do not use regular cash to make major purchases. Carrying large amounts of cash can be very insecure. Carrying credit cards is more secure because, at least in the United States, laws limit consumer losses to $50 if a credit card is stolen. Many credit cards also provide other consumer protections, including merchant dispute resolution procedures and additional product warranties. Similarly, it is unlikely that digital cash will displace many credit card purchases, especially larger ones.
Digital cash is similar to actual cash in that it can be very insecure. Carrying a smart card containing $1000 in digital cash in your pocket is just as dangerous as carrying that amount of actual cash. Once stolen, both actual cash and digital cash can be freely, and anonymously, spent by the thief. Like regular cash, the insecurity of digital cash must be balanced with its convenience. Most people carry small amounts of actual cash, perhaps $50 to $100, on their person at all times. While insecure, people find it convenient to carry some cash to complete their small, daily transactions
In today's society, cash is quickly becoming obsolete. The vast majority of transactions can now be completed without cash. If a person has direct deposit, they can directly deposit their paycheck into their bank account. Using their home computer, that person can pay their monthly bills electronically by using a third-party bill paying system authorized by their bank. Credit cards, once reserved for major purchases, are now accepted at grocery stores, fast food restaurants, pay phones, and coffee shops. Debit cards are quickly replacing checks for many of our day-to-day purchases. There are quite a few transactions that cannot be completed with cash, including renting cars, many mail order purchases, and subscribing to an Internet service provider.
In a typical day, cash is really only necessary for very small transactions, such as purchasing a morning paper, or buying a candy bar out of a vending machine. These "micro-transactions"{1} do not represent a significant enough exchange of value to cover the transactional costs of accepting credit or debit cards. A person still needs to carry enough cash for these micro-transactions. Currently, the way to get cash is to personally go to an automatic teller machine (ATM) for a withdrawal. "Digital cash,"{2} stored on "smart cards"{3} or personal computers, promises to make micro-transactions possible in both the everyday world and in cyberspace.
II. IS DIGITAL CASH NECESSARY?
The need for digital cash closely parallels the need for regular cash. Most people do not use regular cash to make major purchases. Carrying large amounts of cash can be very insecure. Carrying credit cards is more secure because, at least in the United States, laws limit consumer losses to $50 if a credit card is stolen. Many credit cards also provide other consumer protections, including merchant dispute resolution procedures and additional product warranties. Similarly, it is unlikely that digital cash will displace many credit card purchases, especially larger ones.
Digital cash is similar to actual cash in that it can be very insecure. Carrying a smart card containing $1000 in digital cash in your pocket is just as dangerous as carrying that amount of actual cash. Once stolen, both actual cash and digital cash can be freely, and anonymously, spent by the thief. Like regular cash, the insecurity of digital cash must be balanced with its convenience. Most people carry small amounts of actual cash, perhaps $50 to $100, on their person at all times. While insecure, people find it convenient to carry some cash to complete their small, daily transactions
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