The Analysis E-Commerce Payment Using Conventional Currency and Digital Money in Developed and Developing Countries in Millenial Era

With the development of the era, e-commerce is increasing and payment procedures are also changing. There is another alternative for payment, which is using virtual money called cryptocurrency such as bitcoin.  Bitcoin is an electronic money made in 2009 by Satoshi Nakamoto. The US Treasury calls the bitcoin of a decentralized currency that can be used in online payments.. Unlike common currency, bitcoin does not depend on trusting the major publishers and not through a third party or authority in its transactions.

 The Singapore government fixes taxes from bitcoin backed by regulation that bitcoin is a convincing investment, so bitcoin arrangements do not experience legal vacuum and has a clear regulation.

Bank Indonesia stated that Bitcoin is not legal, referring to law in the banking sector, Law no. 7 year 2011 about Currency, promulgated on 28th of June 2011 in Jakarta, the purpose of the establishment of this Act is to confirm the Rupiah as the Republic of Indonesia's legitimate currency along with all information about the physical and the use, and sanctions against fraud, misappropriation of Rupiah in business transactions and legitimate payment device in the Republic of Indonesia. Therefore, from the above explanation will be examined about the analysis of e-commerce payment instruments using conventional money (rupiah) and digital money (cryptocurrency) in developed and developing countries in the millennial era.

Previous research by Darmawan (2014) explained that transactions using bitcoin are hampered by the absence of government regulation and there is  no law protecting illegal bitcoin users so that any transaction using bitcoin will be punished according to the applicable law. In the present era, the researcher explains that transaction using bitcoin does not require bank account, credit card or intermediary. The file is an encryption of unique codes that make it unlike each other.

Cryptocurrency & Bitcoin Theory 

Traditional economics defines money as a common instruments of exchange in the exchange of goods and services (Paganelli, 2012). The role of money itself has 3 functions, namely as a instruments of payment, unit uni, and storage value (Conway, 2014). As technology develops, new money emerges, virtual money or cryptocurrency the process of converting readable information into unbreakable code, used to track purchases and transfers. One type of developing cyptocurrency is bitcoin.

Cryptocurrency is the name given to a system that uses cryptography to securely transmit data and to digitally exchange digital tokens (Dourado & Brito, 2014). Based on the journal written by Joey Conway with the title of Guide Guide to cryptocurrencies, in ca.1982 (Conway, 2014), David chaum of University Of California first published the idea of making a cryptographic-based payment method with a product called DigiCash that can keep data confidential its owner (Chaum, 1982). Cryptocurrency answer to the obstacles facing the current payment system that relies heavily on third parties as a publisher of payment products trusted to manage digital transactions such as mastercard, visa, paypal, and others. One of the cryptocurrency-based currencies is bitcoin.

The basic concept of bitcoin by making decentralized authority transaction system without any third party can verify using digital signature concept in every transaction (Nakomoto, 2008).

Theory of E-commerce

E-Commerce is a term that is often used related to the internet, but no one has explained clearly the meaning of e-commerce. Jong Wong (2010: 33) said that the notion of electronic commerce is the purchase, sale and marketing of goods and services through electronic systems, such as radio, television, and computer network and internet.  

Cryptourrency as Legitimate Payment e- commerce instrument