What Is Digital Currency-How Does It Work
What is digital currency? It is defined as: money saved and transferred in digital form. Sounds easy enough, but how does it all work?
This kind of currency is thought to be great to use for making purchases on the internet because if it works the method it was meant to, transactions should be rather anonymous and untraceable back to the payer or user.
This implies that hackers would no longer have the ability to collect individual information from people who use their charge card to make online purchases. This would obviously decrease the variety of taken identities that occur every day.
To assist you comprehend more of, “what is digital currency?” I have done a fair bit of research on the subject and have found that there are numerous various types out there, each with it’s own distinct qualities.
Here are simply a couple of with their descriptions following:
1. Digital Gold Currency – This type is backed by gold stored in vaults. The gold offers an extra step of security and if you hold this kind of currency, you could perhaps straight exchange it for solid gold bullion.
2. Centralized Currency Systems – these resemble PayPal and these companies permit you to send money all over the world as long as you have money in the account. For some services supplied by these kinds of business, 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 money to make your transaction however your transaction is non-refundable as soon as made. This kind of system only operates in one direction.
The E-cash idea has actually developed in addition to the development of the Web. Individuals simply do not feel comfortable with offering their individual credit card information online when buying.
A lot of bad things can happen like identity theft. Nobody wants their identity stolen.
So, many business have attempted to develop this type of payment or monetary system to minimize the risks of shopping online.
Lots of nations have successfully developed systems for “internal” use 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 then all the cash is transferred into a bank. They can then use the card for anything they need to utilize it for.
Some countries are working on or have systems that permit the user to transfer money through mobile phones. I believe this is rather like what Chase lets their customers do. Their clients can take a picture 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 trying to take it’s location on the planet of e-commerce. There might be a little bit more to it than I could describe in simply one little post but I believe you can get a great concept.