What Is Digital Currency-How Does It Work
What is digital currency? It is specified as: money stored and transferred in digital kind. Sounds easy enough, however how does it all work?
This kind of currency is believed to be great to use for making purchases on the internet since if it works the method it was implied to, deals should be rather anonymous and untraceable back to the payer or user.
This implies that hackers would no longer be able to gather personal information from individuals who utilize their charge card to make online purchases. This would clearly reduce the number of stolen identities that occur every day.
To assist you understand more of, “what is digital currency?” I have done quite a bit of research on the subject and have actually discovered that there are several various types out there, each with it’s own distinct qualities.
Here are just a few with their descriptions following:
1. Digital Gold Currency – This type is backed by gold saved in vaults. The gold supplies an extra step of security and if you hold this type of currency, you might possibly straight exchange it for solid gold bullion.
2. Centralized Currency Systems – these resemble PayPal and these business permit you to send out money all over the world as long as you have money in the account. For some services supplied by these types of business, you get charged a fee on the receivers end of the transaction.
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 utilizing money to make your transaction but your transaction is non-refundable once made. This type of system just works in one direction.
The E-cash idea has developed along with the evolution of the Web. People just do not feel comfortable with giving their personal charge card info over the Internet when buying.
A lot of bad things can happen like identity theft. No one wants their identity stolen.
So, numerous companies have tried to produce this kind of payment or monetary system to reduce the dangers of shopping online.
Lots of countries have 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 cash onto the card and after that all the cash is transferred into a bank. They can then use the card for anything they require to use it for.
Some nations are working on or have systems that enable the user to move money through mobile devices. I believe this is rather like what Chase lets their customers do. Their clients can take a picture 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 trying to take it’s place in the world of e-commerce. There may be a bit more to it than I could explain in simply one small post but I think you can get an excellent idea.