What Is Digital Currency-How Does It Work
What is digital currency? It is defined as: cash kept and moved in digital type. Sounds easy enough, however how does it all work?
This type of currency is thought to be good to utilize for making purchases on the internet due to the fact that if it works the method it was implied to, transactions 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 personal details from individuals who utilize their credit cards to make online purchases. This would obviously reduce the number of taken identities that take place 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 discovered that there are numerous various types out there, each with it’s own unique qualities.
Here are just a couple of with their descriptions following:
1. Digital Gold Currency – This type is backed by gold kept in vaults. The gold supplies an extra measure of security and if you hold this kind of currency, you could potentially directly exchange it for solid gold bullion.
2. Central Currency Systems – these are like PayPal and these companies allow you to send cash all over the world as long as you have cash in the account. For some services provided 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 on cryptography and/or trust networks. Called Hard Electronic Currency, it is meant to be more like utilizing cash to make your transaction but your transaction is non-refundable when made. This kind of system only works in one direction.
The E-cash concept has progressed along with the evolution of the Internet. People just do not feel comfortable with giving their personal charge card details online when making a purchase.
Too many bad things can occur like identity theft. Nobody desires their identity taken.
Lots of companies have actually attempted to produce this type of payment or financial system to minimize the threats of shopping online.
Lots of countries have successfully developed systems for “internal” use such as Hong Kong’s Octopus card. This card works much like a sort of debit card where the user loads money onto the card and then all the money is deposited into a bank. They can then use the card for anything they need to use it for.
Some countries are dealing with or have systems that permit the user to transfer cash through mobile devices. I think this is somewhat like what Chase lets their clients do. Their clients 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 idea of what is digital currency and how it is attempting to take it’s location in the world of e-commerce. There may be a little bit more to it than I could explain in just one little short article however I believe you can get a good idea.