What Is Digital Currency-How Does It Work
What is digital currency? It is defined as: cash stored and transferred in digital type. Sounds basic enough, however how does it all work?
This type of currency is believed to be great to use for making purchases on the internet due to the fact that if it works the method it was indicated to, transactions must be rather confidential and untraceable back to the payer or user.
This suggests that hackers would no longer have the ability to gather personal info from individuals who use their charge card to make online purchases. This would obviously reduce the number of stolen identities that happen every day.
To help you comprehend more of, “what is digital currency?” I have actually done a fair bit of research on the subject and have actually discovered that there are a number of various types out there, each with it’s own unique qualities.
Here are simply a couple of with their descriptions following:
1. Digital Gold Currency – This type is backed by gold kept in vaults. The gold offers an additional procedure of security and if you hold this type of currency, you could possibly directly exchange it for solid gold bullion.
2. Central Currency Systems – these are like PayPal and these business enable you to send cash all over the world as long as you have cash in the account. For some services provided by these types of business, you get charged a charge on the receivers end of the deal.
3. Decentralized Currency Systems – Like Bitcoin are all based on cryptography and/or trust networks. Likewise called Hard Electronic Currency, it is intended to be more like using money to make your transaction but your deal is non-refundable when made. This type of system only operates in one direction.
The E-cash idea has actually evolved together with the evolution of the Internet. People just do not feel comfortable with giving their individual charge card info over the Internet when purchasing.
A lot of bad things can happen like identity theft. No one wants their identity taken.
Many business have tried to develop this type of payment or financial system to reduce the threats of shopping online.
Numerous countries have actually successfully produced systems for “internal” usage such as Hong Kong’s Octopus card. This card works much like a sort of debit card where the user loads cash onto the card and after that all the cash is deposited into a bank. They can then utilize the card for anything they require to use it for.
Some countries are dealing with or have systems that allow the user to move money through mobile devices. I believe this is rather like what Chase lets their clients do. Their consumers can take an image of their check, front and back, with their phone and make their deposit electronically.
I do hope that this gives you some concept of what is digital currency and how it is attempting to take it’s location on the planet of e-commerce. There might be a little more to it than I might explain in simply one small post however I think you can get a good idea.