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What Is Digital Currency-How Does It Work
What is digital currency? It is specified as: cash stored and transferred in digital form. Sounds easy enough, but how does it all work?
This type of currency is thought to be great to use for making purchases on the internet due to the fact that if it works the method it was meant to, deals must be rather anonymous and untraceable back to the payer or user.
This suggests that hackers would no longer have the ability to collect personal information from individuals who utilize their credit cards to make online purchases. This would obviously reduce the variety of stolen identities that take place every day.
To help you understand more of, “what is digital currency?” I have done a fair bit of research on the subject and have discovered that there are a number of different types out there, each with it’s own unique qualities.
Here are just a few with their descriptions following:
1. Digital Gold Currency – This type is backed by gold saved in vaults. The gold offers an additional step of security and if you hold this type of currency, you could possibly straight exchange it for solid gold bullion.
2. Central Currency Systems – these are like PayPal and these companies permit you to send out money all over the world as long as you have money in the account. For some services provided by these types of companies, you get charged a charge on the receivers end of the transaction.
3. Decentralized Currency Systems – Like Bitcoin are all based upon cryptography and/or trust networks. Called Hard Electronic Currency, it is meant to be more like utilizing cash to make your deal however your transaction is non-refundable when made. This type of system just works in one direction.
The E-cash idea has developed along with the advancement of the Web. Individuals just do not feel comfy with offering their personal credit card information over the Internet when buying.
Too many bad things can occur like identity theft. No one wants their identity stolen.
So, lots of business have actually tried to produce this type of payment or monetary system to reduce the threats of shopping online.
Lots of nations have successfully developed systems for “in-house” usage such as Hong Kong’s Octopus card. This card works just like a sort of debit card where the user loads cash onto the card and after that all the money is deposited into a bank. They can then use the card for anything they require to use it for.
Some nations are dealing with or have systems that allow the user to move money through mobile phones. I think this is rather like what Chase lets their customers do. Their clients can take a photo of their check, front and back, with their phone and make their deposit digitally.
I do hope that this offers you some concept of what is digital currency and how it is attempting to take it’s place in the world of e-commerce. There may be a little bit more to it than I could explain in just one little article but I believe you can get a great concept.