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What Is Digital Currency-How Does It Work
What is digital currency? It is defined as: cash saved and moved in digital form. Sounds basic enough, however how does it all work?
This type of currency is thought to be great to use for making purchases on the internet because if it works the way it was implied to, deals must be rather anonymous and untraceable back to the payer or user.
This means that hackers would no longer be able to gather individual information from individuals who use their charge card to make online purchases. This would obviously decrease the number of stolen identities that happen every day.
To help you understand more of, “what is digital currency?” I have actually done quite a bit of research on the subject and have discovered that there are a number of 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 provides an additional step of security and if you hold this type of currency, you could perhaps straight exchange it for solid gold bullion.
2. Central Currency Systems – these resemble PayPal and these business allow you to send out cash all over the world as long as you have cash in the account. For some services offered by these kinds of companies, you get charged a charge 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 using cash to make your transaction however your transaction is non-refundable when made. This type of system just works in one direction.
The E-cash concept has actually progressed along with the development of the Internet. People simply do not feel comfortable with providing their individual charge card information over the Internet when buying.
Too many bad things can happen like identity theft. No one desires their identity taken.
Numerous business have tried to create this type of payment or monetary system to lessen the risks of shopping online.
Many countries have successfully created 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 money onto the card and after that all the cash is deposited into a bank. They can then utilize the card for anything they require to utilize it for.
Some countries are working on or have systems that allow the user to move money through mobile phones. I believe this is rather like what Chase lets their clients 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 concept of what is digital currency and how it is trying to take it’s place worldwide of e-commerce. There might be a bit more to it than I could describe in simply one small short article but I believe you can get a good concept.