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What Is Digital Currency-How Does It Work
What is digital currency? It is defined as: money kept and transferred in digital kind. Sounds easy enough, however how does it all work?
This type of currency is thought to be great to use for making purchases on the internet because if it works the way it was indicated to, transactions should be rather confidential and untraceable back to the payer or user.
This indicates that hackers would no longer be able to gather individual information from people who use their charge card to make online purchases. This would obviously decrease the variety of taken identities that happen 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 unique qualities.
Here are simply a couple of with their descriptions following:
1. Digital Gold Currency – This type is backed by gold kept in vaults. The gold provides an additional measure of security and if you hold this type of currency, you could possibly straight exchange it for solid gold bullion.
2. Centralized Currency Systems – these resemble PayPal and these business permit you to send out cash 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 fee on the receivers end of the transaction.
3. Decentralized Currency Systems – Like Bitcoin are all based on cryptography and/or trust networks. Also called Hard Electronic Currency, it is meant to be more like using cash to make your transaction however your transaction is non-refundable as soon as made. This type of system just operates in one direction.
The E-cash concept has actually developed in addition to the advancement of the Web. People just do not feel comfy with giving their personal credit card details over the Internet when making a purchase.
Too many bad things can occur like identity theft. Nobody wants their identity taken.
Lots of business have actually tried to develop this type of payment or monetary system to decrease the risks of shopping online.
Many countries have effectively created systems for “in-house” use such as Hong Kong’s Octopus card. This card works just like a sort of debit card where the user loads money onto the card and then all the cash is deposited into a bank. They can then use the card for anything they require to utilize it for.
Some countries are working on or have systems that permit the user to move cash through mobile devices. I think this is rather like what Chase lets their consumers do. Their customers can take a picture 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 on the planet of e-commerce. There might be a little bit more to it than I could describe in just one small short article but I think you can get an excellent idea.