What Is Digital Currency-How Does It Work
What is digital currency? It is defined as: money saved and transferred in digital kind. Sounds easy enough, but how does it all work?
This type of currency is believed to be good to use for making purchases on the internet due to the fact that if it works the method it was meant to, transactions ought to be rather anonymous and untraceable back to the payer or user.
This indicates that hackers would no longer have the ability to collect personal info from individuals who utilize 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 actually found that there are several different types out there, each with it’s own unique qualities.
Here are simply a couple of with their descriptions following:
1. Digital Gold Currency – This type is backed by gold stored in vaults. The gold supplies an extra measure of security and if you hold this type of currency, you could potentially directly exchange it for solid gold bullion.
2. Central Currency Systems – these are like PayPal and these companies enable you to send money all over the world as long as you have cash in the account. For some services offered by these types of business, 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. Also called Hard Electronic Currency, it is planned to be more like using money to make your transaction but your deal is non-refundable as soon as made. This kind of system only works in one instructions.
The E-cash idea has actually developed together with the advancement of the Internet. People just do not feel comfortable with providing their individual credit card information over the Internet when making a purchase.
A lot of bad things can occur like identity theft. No one wants their identity stolen.
So, lots of business have attempted to develop this type of payment or monetary system to reduce the dangers of shopping online.
Lots of countries have effectively created systems for “internal” usage such as Hong Kong’s Octopus card. This card works much like a sort of debit card where the user loads cash onto the card and then all the cash is transferred into a bank. They can then use the card for anything they require to utilize it for.
Some countries are working on or have systems that permit the user to move cash through mobile phones. I think this is rather like what Chase lets their consumers do. Their clients can take a picture of their check, front and back, with their phone and make their deposit electronically.
I do hope that this gives you some concept of what is digital currency and how it is trying to take it’s location on the planet of e-commerce. There may be a little more to it than I might explain in simply one small article but I think you can get a great concept.