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What Is Digital Currency-How Does It Work
What is digital currency? It is specified as: money stored and transferred in digital kind. Sounds basic enough, but how does it all work?
This kind of currency is believed to be great to use for making purchases on the internet due to the fact that if it works the way it was indicated to, transactions need to be rather anonymous and untraceable back to the payer or user.
This implies that hackers would no longer be able to collect individual information from people who use their credit cards to make online purchases. This would undoubtedly reduce the number of stolen identities that happen every day.
To help you understand more of, “what is digital currency?” I have done a fair bit of research study on the subject and have found that there are several different types out there, each with it’s own unique qualities.
Here are simply a few with their descriptions following:
1. Digital Gold Currency – This type is backed by gold stored in vaults. The gold supplies an additional step of security and if you hold this type of currency, you could potentially directly exchange it for solid gold bullion.
2. Centralized 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 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 deal is non-refundable once made. This kind of system only works in one instructions.
The E-cash concept has evolved along with the evolution of the Web. People just do not feel comfy with providing their personal charge card info online when purchasing.
Too many bad things can take place like identity theft. No one desires their identity stolen.
Lots of companies have attempted to develop this type of payment or monetary system to minimize the threats of shopping online.
Numerous countries have effectively produced systems for “in-house” 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 money is deposited into a bank. They can then utilize the card for anything they need to utilize it for.
Some countries are dealing with or have systems that enable the user to move money through mobile phones. I think this is somewhat like what Chase lets their customers do. Their customers can take an image 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 location on the planet of e-commerce. There might be a bit more to it than I could explain in simply one small article however I think you can get a great idea.