What Is Digital Currency-How Does It Work
What is digital currency? It is defined as: cash saved and transferred in digital type. Sounds simple enough, however how does it all work?
This kind of currency is thought to be great to use for making purchases on the internet due to the fact that if it works the way it was suggested to, deals should be rather anonymous and untraceable back to the payer or user.
This suggests that hackers would no longer have the ability to collect personal details from people who utilize their charge card to make online purchases. This would clearly decrease the number of taken identities that happen every day.
To assist you understand more of, “what is digital currency?” I have done a fair bit of research on the subject and have actually discovered that there are numerous various types out there, each with it’s own special qualities.
Here are just a few with their descriptions following:
1. Digital Gold Currency – This type is backed by gold stored in vaults. The gold supplies an additional procedure of security and if you hold this type of currency, you could potentially directly exchange it for solid gold bullion.
2. Centralized Currency Systems – these resemble PayPal and these companies enable you to send out money all over the world as long as you have money in the account. For some services provided by these kinds 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. Also called Hard Electronic Currency, it is meant to be more like using money to make your transaction however your deal is non-refundable as soon as made. This type of system only works in one direction.
The E-cash concept has actually developed along with the development of the Web. People just do not feel comfortable with providing their individual charge card details online when making a purchase.
A lot of bad things can happen like identity theft. No one desires their identity taken.
So, lots of business have tried to produce this kind of payment or monetary system to minimize the dangers of shopping online.
Many nations have successfully created systems for “in-house” 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 cash is deposited into a bank. They can then utilize the card for anything they require to utilize it for.
Some countries are working on or have systems that permit the user to move cash through mobile devices. I believe this is rather like what Chase lets their customers do. Their customers can take an image of their check, front and back, with their phone and make their deposit digitally.
I do hope that this gives you some concept of what is digital currency and how it is trying to take it’s place worldwide of e-commerce. There might be a bit more to it than I could describe in just one little article but I believe you can get a good idea.