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What Is Digital Currency-How Does It Work
What is digital currency? It is defined as: cash kept and transferred in digital type. Sounds simple enough, but how does it all work?
This kind of currency is thought to be good to use for making purchases on the internet because if it works the way it was indicated to, transactions need to be rather confidential and untraceable back to the payer or user.
This implies that hackers would no longer have the ability to collect individual info from individuals who use their credit cards to make online purchases. This would obviously reduce the number of taken identities that take place every day.
To help you understand more of, “what is digital currency?” I have actually done a fair bit of research study on the subject and have actually found that there are numerous 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 offers an additional procedure of security and if you hold this type of currency, you could perhaps directly exchange it for solid gold bullion.
2. Central Currency Systems – these resemble PayPal and these companies allow you to send cash all over the world as long as you have cash in the account. For some services offered by these types of companies, you get charged a fee on the receivers end of the transaction.
3. Decentralized Currency Systems – Like Bitcoin are all based upon cryptography and/or trust networks. Also called Hard Electronic Currency, it is meant to be more like using money to make your transaction however your transaction is non-refundable when made. This kind of system only works in one instructions.
The E-cash idea has evolved together with the development of the Internet. People just do not feel comfortable with giving their individual charge card info over the Internet when making a purchase.
A lot of bad things can happen like identity theft. No one desires their identity stolen.
Many companies have actually attempted to develop this type of payment or monetary system to reduce the dangers of shopping online.
Numerous countries have successfully developed systems for “internal” usage such as Hong Kong’s Octopus card. This card works similar to a sort of debit card where the user loads money onto the card and then 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 enable the user to move cash through mobile phones. I think this is somewhat like what Chase lets their clients do. Their customers can take an image of their check, front and back, with their phone and make their deposit digitally.
I do hope that this provides you some idea 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 little more to it than I could explain in simply one little article but I believe you can get a great concept.