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What Is Digital Currency-How Does It Work
What is digital currency? It is defined as: money kept and moved in digital form. Sounds simple enough, but how does it all work?
This type of currency is thought to be excellent to use for making purchases on the internet due to the fact that if it works the method it was implied to, transactions need to be rather anonymous and untraceable back to the payer or user.
This suggests that hackers would no longer have the ability to gather individual details from people who utilize their credit cards to make online purchases. This would obviously reduce the variety of taken identities that occur every day.
To help you comprehend more of, “what is digital currency?” I have done quite a bit of research on the subject and have found that there are numerous different 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 kept in vaults. The gold offers an extra procedure of security and if you hold this type of currency, you might possibly straight exchange it for solid gold bullion.
2. Centralized Currency Systems – these are like PayPal and these companies enable you to send out cash 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 fee on the receivers end of the deal.
3. Decentralized Currency Systems – Like Bitcoin are all based on cryptography and/or trust networks. Likewise called Hard Electronic Currency, it is meant to be more like using money to make your transaction however your transaction is non-refundable once made. This kind of system only works in one direction.
The E-cash concept has evolved in addition to the evolution of the Internet. People simply do not feel comfortable with offering their individual charge card info online when making a purchase.
Too many bad things can occur like identity theft. No one desires their identity stolen.
Numerous companies have tried to create this type of payment or monetary system to minimize the dangers of shopping online.
Lots of countries have actually effectively created systems for “internal” usage such as Hong Kong’s Octopus card. This card works much like a sort of debit card where the user loads money onto the card and after that all the money is deposited into a bank. They can then use the card for anything they require to utilize it for.
Some countries are dealing with or have systems that allow the user to move cash through mobile phones. I believe this is somewhat like what Chase lets their customers do. Their clients 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 concept of what is digital currency and how it is attempting to take it’s location in the world of e-commerce. There might be a bit more to it than I could explain in just one small post but I think you can get an excellent idea.