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What Is Digital Currency-How Does It Work
What is digital currency? It is defined as: cash saved and transferred in digital form. Sounds easy enough, however how does it all work?
This kind of currency is thought to be excellent to use for making purchases on the internet because if it works the method it was suggested to, deals ought to be rather confidential and untraceable back to the payer or user.
This implies that hackers would no longer have the ability to gather individual details from people who use their charge card to make online purchases. This would obviously decrease the number of stolen identities that take place 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 discovered that there are a number of various types out there, each with it’s own special qualities.
Here are simply a few with their descriptions following:
1. Digital Gold Currency – This type is backed by gold stored in vaults. The gold provides an extra step of security and if you hold this kind of currency, you could perhaps directly exchange it for solid gold bullion.
2. Central Currency Systems – these are like PayPal and these companies enable you to send out money 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 charge on the receivers end of the deal.
3. Decentralized Currency Systems – Like Bitcoin are all based on cryptography and/or trust networks. Called Hard Electronic Currency, it is intended to be more like using cash to make your deal but your deal is non-refundable once made. This type of system just operates in one instructions.
The E-cash concept has progressed along with the advancement of the Internet. Individuals just do not feel comfy with giving their personal charge card information online when purchasing.
Too many bad things can occur like identity theft. Nobody wants their identity taken.
Lots of business have tried to develop this type of payment or financial system to minimize the threats of shopping online.
Lots of countries have successfully developed 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 then all the money is transferred 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 enable the user to move cash through mobile phones. I believe this is somewhat like what Chase lets their customers do. Their clients can take an image of their check, front and back, with their phone and make their deposit electronically.
I do hope that this provides you some concept of what is digital currency and how it is trying to take it’s place in the world of e-commerce. There may be a little bit more to it than I might explain in just one little post but I believe you can get a great concept.