What Is Digital Currency-How Does It Work
What is digital currency? It is defined as: cash kept and moved in digital form. Sounds basic enough, but how does it all work?
This kind of currency is thought to be excellent to use for making purchases on the internet due to the fact that if it works the way it was suggested to, transactions need to be rather anonymous and untraceable back to the payer or user.
This indicates that hackers would no longer be able to collect individual info from people who use their credit cards to make online purchases. This would obviously decrease the number of taken identities that take place every day.
To assist you comprehend more of, “what is digital currency?” I have actually 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 couple of with their descriptions following:
1. Digital Gold Currency – This type is backed by gold saved in vaults. The gold provides an additional measure of security and if you hold this kind of currency, you might perhaps straight exchange it for solid gold bullion.
2. Centralized Currency Systems – these resemble PayPal and these business permit you to send 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 fee 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 intended to be more like using money to make your transaction but your transaction is non-refundable once made. This type of system only operates in one direction.
The E-cash concept has actually progressed together with the advancement of the Web. People simply do not feel comfy with giving their individual credit card info online when purchasing.
A lot of bad things can take place like identity theft. No one wants their identity stolen.
Numerous business have attempted to develop this type of payment or financial system to minimize the dangers of shopping online.
Numerous nations have actually successfully developed systems for “in-house” use such as Hong Kong’s Octopus card. This card works much like a sort of debit card where the user loads money onto the card and then all the cash is transferred 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 consumers do. Their consumers can take an image of their check, front and back, with their phone and make their deposit digitally.
I do hope that this offers you some idea of what is digital currency and how it is attempting to take it’s location in the world of e-commerce. There might be a little more to it than I could explain in simply one small short article but I think you can get a great idea.