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What Is Digital Currency-How Does It Work
What is digital currency? It is defined as: cash stored and moved in digital kind. 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 due to the fact that 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 information from individuals who use their credit cards to make online purchases. This would clearly reduce the number of taken identities that occur every day.
To assist you comprehend more of, “what is digital currency?” I have actually done a fair bit of research on the subject and have actually found that there are a number of various 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 extra step 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 resemble PayPal and these companies allow you to send money all over the world as long as you have money in the account. For some services supplied 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 on cryptography and/or trust networks. Called Hard Electronic Currency, it is intended to be more like utilizing money to make your transaction however your transaction is non-refundable when made. This type of system just works in one instructions.
The E-cash idea has actually developed along with the evolution of the Internet. People just do not feel comfortable with offering their individual charge card info over the Internet when making a purchase.
Too many bad things can take place like identity theft. No one desires their identity taken.
So, many companies have attempted to produce this type of payment or monetary system to minimize the dangers of shopping online.
Many nations have successfully created systems for “in-house” use 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 money 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 permit the user to move cash through mobile phones. I think this is somewhat like what Chase lets their consumers do. Their consumers can take a photo 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 on the planet of e-commerce. There might be a little bit more to it than I might describe in simply one little post but I think you can get an excellent idea.