What Is Digital Currency-How Does It Work
What is digital currency? It is defined as: money kept and transferred in digital form. Sounds simple enough, but how does it all work?
This type of currency is believed to be excellent to use for making purchases on the internet because if it works the way it was meant to, deals should be rather anonymous and untraceable back to the payer or user.
This means that hackers would no longer have the ability to gather individual details from people who use their credit cards to make online purchases. This would obviously reduce the variety of stolen identities that happen every day.
To assist you comprehend more of, “what is digital currency?” I have actually done quite a bit of research on the subject and have actually found that there are several 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 provides an additional measure of security and if you hold this type of currency, you could perhaps straight exchange it for solid gold bullion.
2. Centralized Currency Systems – these are like PayPal and these companies allow you to send out cash all over the world as long as you have cash in the account. For some services offered by these kinds of companies, you get charged a cost on the receivers end of the deal.
3. Decentralized Currency Systems – Like Bitcoin are all based upon cryptography and/or trust networks. Likewise called Hard Electronic Currency, it is intended to be more like utilizing money to make your deal but your transaction is non-refundable when made. This type of system just works in one direction.
The E-cash concept has evolved in addition to the evolution of the Internet. Individuals just do not feel comfy with offering their personal credit card information over the Internet when purchasing.
A lot of bad things can occur like identity theft. No one wants their identity taken.
So, many business have tried to create this kind of payment or monetary system to lessen the risks of shopping online.
Numerous nations have actually successfully produced systems for “internal” use 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 after that all the money is transferred into a bank. They can then utilize the card for anything they require to use it for.
Some nations are working on or have systems that allow the user to transfer money through mobile devices. I believe this is somewhat like what Chase lets their customers do. Their customers can take a picture of their check, front and back, with their phone and make their deposit digitally.
I do hope that this gives you some idea of what is digital currency and how it is trying to take it’s location on the planet of e-commerce. There may be a bit more to it than I could describe in just one small short article however I think you can get a great idea.