What Is Digital Currency-How Does It Work
What is digital currency? It is defined as: cash kept and moved in digital type. Sounds basic enough, but how does it all work?
This type of currency is believed to be good to use for making purchases on the internet because if it works the method it was indicated to, deals need to be rather confidential and untraceable back to the payer or user.
This suggests that hackers would no longer be able to collect personal info from individuals who utilize their charge card to make online purchases. This would obviously reduce the number of stolen identities that take place every day.
To help you understand more of, “what is digital currency?” I have actually done a fair bit of research on the subject and have actually found that there are several various types out there, each with it’s own unique qualities.
Here are simply a few with their descriptions following:
1. Digital Gold Currency – This type is backed by gold kept in vaults. The gold supplies an extra step of security and if you hold this kind of currency, you could perhaps directly exchange it for solid gold bullion.
2. Centralized Currency Systems – these are like PayPal and these companies permit you to send cash 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 fee on the receivers end of the transaction.
3. Decentralized Currency Systems – Like Bitcoin are all based on cryptography and/or trust networks. Called Hard Electronic Currency, it is meant to be more like utilizing cash to make your transaction however your transaction is non-refundable when made. This type of system only operates in one direction.
The E-cash concept has actually developed along with the evolution of the Internet. People simply do not feel comfortable with providing their individual charge card details online when purchasing.
Too many bad things can take place like identity theft. No one wants their identity taken.
Many business have tried to develop this type of payment or monetary system to decrease the dangers of shopping online.
Numerous countries have effectively produced systems for “in-house” usage such as Hong Kong’s Octopus card. This card works similar to a sort of debit card where the user loads cash onto the card and then all the money is transferred into a bank. They can then use the card for anything they require to use it for.
Some countries are working on or have systems that allow the user to move money through mobile devices. I think this is somewhat like what Chase lets their consumers 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 offers you some concept of what is digital currency and how it is trying to take it’s place on the planet of e-commerce. There might be a little more to it than I could explain in just one little post however I think you can get an excellent concept.