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What Is Digital Currency-How Does It Work
What is digital currency? It is defined as: money saved and transferred in digital type. Sounds basic enough, but how does it all work?
This type of currency is believed to be excellent to utilize for making purchases on the internet because if it works the way it was indicated to, transactions need to be rather confidential and untraceable back to the payer or user.
This means that hackers would no longer be able to collect personal info from people who use their credit cards to make online purchases. This would certainly decrease the number of taken identities that occur every day.
To help you understand more of, “what is digital currency?” I have done quite a bit of research on the subject and have found that there are numerous different types out there, each with it’s own distinct qualities.
Here are simply a few with their descriptions following:
1. Digital Gold Currency – This type is backed by gold saved in vaults. The gold offers an additional procedure of security and if you hold this kind of currency, you could possibly directly 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 offered by these types of business, you get charged a charge on the receivers end of the transaction.
3. Decentralized Currency Systems – Like Bitcoin are all based on cryptography and/or trust networks. Likewise 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 developed along with the evolution of the Web. People just do not feel comfy with providing their personal charge card info online when buying.
A lot of bad things can happen like identity theft. No one wants their identity taken.
Lots of companies have attempted to create this type of payment or financial system to decrease the risks of shopping online.
Lots of countries have successfully developed systems for “internal” usage such as Hong Kong’s Octopus card. This card works just like a sort of debit card where the user loads money 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 permit the user to move money through mobile phones. I think this is somewhat like what Chase lets their customers do. Their customers can take a photo of their check, front and back, with their phone and make their deposit electronically.
I do hope that this gives you some idea of what is digital currency and how it is trying to take it’s place in the world of e-commerce. There might be a bit more to it than I could explain in simply one small article but I believe you can get a great idea.