What Is Digital Currency-How Does It Work
What is digital currency? It is defined as: money stored and moved in digital form. Sounds basic enough, but how does it all work?
This kind of currency is believed to be great to utilize for making purchases on the internet since if it works the way it was meant to, transactions ought to be rather confidential and untraceable back to the payer or user.
This means that hackers would no longer be able to gather individual information from individuals who utilize their credit cards to make online purchases. This would obviously decrease the number of stolen identities that happen every day.
To assist you understand more of, “what is digital currency?” I have actually done quite a bit of research on the subject and have actually found that there are several various types out there, each with it’s own distinct qualities.
Here are just a couple of with their descriptions following:
1. Digital Gold Currency – This type is backed by gold kept in vaults. The gold provides an additional measure of security and if you hold this kind of currency, you could possibly straight exchange it for solid gold bullion.
2. Centralized Currency Systems – these resemble PayPal and these business enable you to send out money all over the world as long as you have money in the account. For some services offered by these kinds 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 deal however your deal is non-refundable as soon as made. This type of system only works in one direction.
The E-cash idea has developed along with the development of the Internet. Individuals just do not feel comfortable with offering their personal credit card info online when making a purchase.
Too many bad things can occur like identity theft. No one wants their identity stolen.
So, numerous companies have actually tried to produce this type of payment or monetary system to lessen the risks of shopping online.
Many nations have effectively produced 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 money is transferred into a bank. They can then use the card for anything they require to utilize it for.
Some countries are dealing with or have systems that permit the user to move money through mobile devices. I believe this is somewhat 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 electronically.
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 may be a little more to it than I could explain in just one little article but I think you can get a good concept.