What Is Digital Currency-How Does It Work
What is digital currency? It is defined as: cash saved and transferred in digital form. Sounds simple enough, however how does it all work?
This type of currency is believed to be great to utilize for making purchases on the internet due to the fact that if it works the way it was suggested to, transactions should be rather confidential and untraceable back to the payer or user.
This suggests that hackers would no longer have the ability to gather individual details from people who use their charge card to make online purchases. This would obviously decrease the number of taken 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 numerous different types out there, each with it’s own special 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 provides an additional step of security and if you hold this type of currency, you could possibly directly exchange it for solid gold bullion.
2. Central Currency Systems – these are like 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 kinds of business, you get charged a cost 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 meant to be more like using cash to make your transaction however your deal is non-refundable when made. This kind of system just operates in one direction.
The E-cash idea has progressed along with the development of the Internet. People simply do not feel comfortable with giving their individual charge card information over the Internet when buying.
Too many bad things can occur like identity theft. No one wants their identity taken.
Numerous business have actually attempted to develop this type of payment or financial system to decrease the risks of shopping online.
Lots of countries have actually effectively 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 after that all the cash is transferred into a bank. They can then utilize the card for anything they require to use it for.
Some countries are working on or have systems that permit the user to move money through mobile phones. I think this is rather like what Chase lets their consumers do. Their clients can take an image 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 location on the planet of e-commerce. There may be a bit more to it than I could describe in just one small post but I believe you can get a great idea.