What Is Digital Currency-How Does It Work
What is digital currency? It is defined as: cash kept and moved in digital form. Sounds simple enough, however how does it all work?
This type of currency is thought to be excellent to use for making purchases on the internet since if it works the way it was meant to, transactions 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 info from individuals who use their charge card to make online purchases. This would clearly decrease the number of stolen identities that take place every day.
To help 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 a number of 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 kept in vaults. The gold supplies an additional step of security and if you hold this kind of currency, you might possibly straight exchange it for solid gold bullion.
2. Centralized Currency Systems – these resemble PayPal and these companies permit 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 business, 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. Also called Hard Electronic Currency, it is meant to be more like using cash to make your transaction however your deal is non-refundable once made. This type of system just operates in one direction.
The E-cash idea has developed along with the development of the Web. People simply do not feel comfortable with offering their personal credit card details online when buying.
A lot of bad things can take place like identity theft. No one desires their identity stolen.
So, lots of companies have actually tried to create this kind of payment or monetary system to reduce the dangers of shopping online.
Lots of nations have actually effectively 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 money onto the card and then all the money is deposited into a bank. They can then utilize the card for anything they require to use it for.
Some countries are working on or have systems that enable the user to transfer cash through mobile phones. I believe this is somewhat like what Chase lets their clients do. Their consumers can take a picture of their check, front and back, with their phone and make their deposit digitally.
I do hope that this offers you some idea of what is digital currency and how it is trying to take it’s location worldwide of e-commerce. There might be a little bit more to it than I might explain in just one small post but I think you can get a good idea.