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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 type. Sounds basic enough, however how does it all work?
This type of currency is believed to be great to utilize for making purchases on the internet because if it works the way it was indicated to, transactions ought to be rather confidential and untraceable back to the payer or user.
This indicates that hackers would no longer have the ability to collect individual details from people who use their credit cards to make online purchases. This would obviously reduce the number of stolen identities that happen every day.
To help you comprehend more of, “what is digital currency?” I have done a fair bit of research on the subject and have discovered that there are a number of various types out there, each with it’s own special qualities.
Here are just a few with their descriptions following:
1. Digital Gold Currency – This type is backed by gold stored in vaults. The gold provides an extra step of security and if you hold this kind of currency, you could perhaps directly exchange it for solid gold bullion.
2. Centralized Currency Systems – these are like PayPal and these companies enable you to send money all over the world as long as you have cash in the account. For some services provided 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 money to make your transaction but your deal is non-refundable as soon as made. This type of system only operates in one direction.
The E-cash concept has actually developed together with the evolution of the Internet. Individuals just do not feel comfortable with giving their personal credit card information online when making a purchase.
Too many bad things can happen like identity theft. No one desires their identity taken.
So, many companies have tried to produce this type of payment or monetary system to lessen the threats of shopping online.
Lots of nations have actually successfully 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 money is transferred into a bank. They can then use the card for anything they need to utilize it for.
Some nations are dealing with or have systems that enable the user to transfer cash through mobile phones. I think this is rather like what Chase lets their consumers do. Their consumers 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 location in the world of e-commerce. There might be a little bit more to it than I might describe in just one small article however I think you can get a good idea.