Pros of Using Digital Money

Digital money enables instantaneous transactions over the Internet and Bitcoin has even made it possible to transfer money across international borders within minutes.

Unlike physical cash, more consumers are increasingly keeping money in digital e-wallets, e-banks and other forms of online platforms. There is no doubt that this technological advancement has brought forth many practical benefits to society.

For example, digital transactions have made it a breeze to perform international e-commerce transactions and the blockchain innovation has even made true peer-to-peer payments possible. All the digital technological conveniences that we have enjoyed over the last two decades are actually just the initial phases of living in the digital era. Since Bitcoin appeared on the scene in 2009, we are now just only beginning to explore the potentials of blockchains solving worldwide problems apart from the the traditional banking and payment systems.

Many people also probably do not realize that a cashless society makes a city safer to live in. When people and shops carry less cash around, robbers will have less motivation to violently mug and steal from people on the streets. The thieves, robbers and scammers are of course still around but they now mostly ply their devious trades online.

Perils of Using Digital Money

While digital money offers convenience and even makes our societies safer, most people probably do not foresee the risks of over reliance on digital money.

For starters, digital security is a crucial concern. As we know, most users complain about needing to jump through multiple hurdles to access their digital assets or money. The programmers need to implement these security steps because no digital system in the world is totally secure.

It does not matter if it is your e-banking platform, e-wallets or other forms of digital storage. They are all vulnerable to hacking, phishing, and malware. A single security breach can result in substantial financial and data losses for users.

Central Bank Digital Currencies (CBDCs) introduce another set of concerns. These government-issued digital currencies can erode citizen privacy as every transaction can be monitored and recorded by central authorities. This level of surveillance raises fears about potential misuse, such as restricting access to funds or targeting individuals based on their spending habits.

Additionally, reliance on digital systems increases the risks of outages or system failures, which could disrupt access to money in emergencies. As some of us had found out, it does not take a major natural disaster or even an act of war to disrupt the complex computer systems that our societies have come to depend so much on.

These pitfalls highlight the need for balanced regulation and robust technological safeguards as digital money becomes more mainstream. Some paranoid users might try to resist the advancement towards a digitized society by sticking to good ol' cash but it will definitely prove to be a uphill task especially if you live in a modern technological driven smart city.