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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 form. 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 since if it works the way it was indicated to, deals should be rather anonymous and untraceable back to the payer or user.
This means that hackers would no longer be able to collect personal information from individuals who utilize their credit cards to make online purchases. This would certainly reduce the number of stolen identities that happen every day.
To help you understand more of, “what is digital currency?” I have actually done quite a bit of research on the subject and have actually discovered that there are several different types out there, each with it’s own distinct 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 extra step of security and if you hold this kind of currency, you could perhaps 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 cash in the account. For some services provided by these types of companies, you get charged a cost on the receivers end of the transaction.
3. Decentralized Currency Systems – Like Bitcoin are all based on cryptography and/or trust networks. Called Hard Electronic Currency, it is planned to be more like utilizing money to make your deal however your transaction is non-refundable when made. This kind of system just works in one direction.
The E-cash concept has actually progressed together with the evolution of the Web. Individuals simply do not feel comfy with offering their individual credit card details over the Internet when making a purchase.
A lot of bad things can occur like identity theft. No one desires their identity stolen.
Many business have actually tried to create this type of payment or monetary system to reduce the dangers of shopping online.
Many countries have actually successfully developed systems for “in-house” use 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 after that all the money 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 allow the user to transfer money through mobile phones. I believe this is rather like what Chase lets their clients do. Their clients can take a picture of their check, front and back, with their phone and make their deposit digitally.
I do hope that this offers 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 might be a bit more to it than I could describe in just one small article however I believe you can get a good idea.