What Is Digital Currency-How Does It Work
What is digital currency? It is defined as: money kept and moved in digital form. Sounds basic enough, however how does it all work?
This type of currency is thought to be great to utilize for making purchases on the internet since if it works the method it was suggested to, transactions must be rather anonymous and untraceable back to the payer or user.
This implies that hackers would no longer be able to gather individual information from individuals who use their credit cards to make online purchases. This would obviously reduce the number of stolen identities that occur every day.
To assist you comprehend more of, “what is digital currency?” I have actually done a fair bit of research on the subject and have discovered that there are several different types out there, each with it’s own special 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 extra measure of security and if you hold this type of currency, you might perhaps straight exchange it for solid gold bullion.
2. Centralized Currency Systems – these are like PayPal and these companies enable you to send cash all over the world as long as you have money in the account. For some services provided by these types of companies, you get charged a charge on the receivers end of the transaction.
3. Decentralized Currency Systems – Like Bitcoin are all based upon cryptography and/or trust networks. Called Hard Electronic Currency, it is planned to be more like utilizing money to make your transaction but your transaction is non-refundable when made. This type of system only operates in one direction.
The E-cash idea has actually progressed along with the advancement of the Internet. Individuals simply 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.
Lots of companies have tried to produce this type of payment or monetary system to decrease the threats of shopping online.
Lots of countries have successfully created systems for “in-house” use 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 utilize it for.
Some countries are working on or have systems that enable the user to move cash through mobile phones. I believe this is somewhat like what Chase lets their customers do. Their customers can take a photo 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 attempting to take it’s place worldwide of e-commerce. There may be a little bit more to it than I could describe in just one small post but I think you can get a great idea.