Answer to Question 1
A digital wallet is an electronic device or software that can store credit card numbers, digital cash, owner identification, and owner contact information and provide that information to an online business at checkout. Digital wallets give consumers the benefit of entering their information just once, instead of having to enter their information at every site with which they want to do business.
Software-based digital wallets fall into two categories, depending on where they are stored. A server-side digital wallet stores a customers information on a remote server belonging to a particular merchant or wallet publisher. A client-side digital wallet stores information on the customers computer.
Smartphones and tablets, as mobile devices, are candidates to become hardware-based digital wallets that can store a variety of identity credentials (such as a drivers license, medical insurance card, store loyalty cards, and other identifying documents). The smartphone can transmit portions of this identity information on command using
its Bluetooth or wireless transmission capability to nearby terminals.
Answer to Question 2
Double spending is spending a particular piece of digital cash twice by submitting the same electronic currency to two different vendors. When the electronic currency reaches the bank for clearance a second time, it is too late to prevent the fraudulent act. The main deterrent to double spending is the threat of detection and prosecution. Thus, digital cash must be traceable back to its origin.
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