What Is Digital Currency-How Does It Work
What is digital currency? It is defined as: cash stored and transferred in digital type. Sounds simple enough, but how does it all work?
This kind of currency is thought to be great to use for making purchases on the internet because if it works the way it was indicated to, deals should be rather anonymous and untraceable back to the payer or user.
This means that hackers would no longer be able to collect individual details from people who use their credit cards to make online purchases. This would obviously reduce the variety of stolen identities that happen every day.
To help you comprehend more of, “what is digital currency?” I have done quite a bit of research study on the subject and have found that there are numerous 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 offers an extra procedure of security and if you hold this kind of currency, you could perhaps straight 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 types of companies, you get charged a fee on the receivers end of the deal.
3. Decentralized Currency Systems – Like Bitcoin are all based upon cryptography and/or trust networks. Called Hard Electronic Currency, it is meant to be more like utilizing cash to make your deal but your deal is non-refundable once made. This type of system only works in one direction.
The E-cash idea has developed together with the advancement of the Web. Individuals just do not feel comfy with providing their personal charge card information online when purchasing.
Too many bad things can happen like identity theft. Nobody wants their identity taken.
Lots of business have tried to develop this type of payment or financial system to reduce the threats of shopping online.
Numerous countries have effectively developed systems for “in-house” usage such as Hong Kong’s Octopus card. This card works just like a sort of debit card where the user loads cash onto the card and then all the cash is deposited into a bank. They can then use the card for anything they need to use it for.
Some countries are working on or have systems that enable the user to transfer cash through mobile phones. I think this is rather like what Chase lets their customers do. Their customers can take a picture 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 on the planet of e-commerce. There might be a little bit more to it than I could explain in simply one little short article but I think you can get a great idea.