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What Is Digital Currency-How Does It Work
What is digital currency? It is defined as: cash stored and transferred in digital form. Sounds basic enough, however how does it all work?
This kind of currency is thought to be excellent to use for making purchases on the internet because if it works the way it was meant to, transactions should be rather anonymous and untraceable back to the payer or user.
This indicates that hackers would no longer have the ability to collect individual details from people who use their credit cards to make online purchases. This would undoubtedly decrease the number of taken identities that take place every day.
To assist you comprehend more of, “what is digital currency?” I have done a fair bit of research on the subject and have discovered that there are a number of different types out there, each with it’s own special qualities.
Here are just a couple of 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 might potentially directly exchange it for solid gold bullion.
2. Centralized Currency Systems – these are like PayPal and these companies enable you to send money all over the world as long as you have cash in the account. For some services supplied 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 upon cryptography and/or trust networks. Called Hard Electronic Currency, it is planned to be more like utilizing cash to make your deal but your deal is non-refundable when made. This kind of system only operates in one instructions.
The E-cash concept has actually developed together with the advancement of the Internet. People simply do not feel comfortable with offering their individual charge card information over the Internet when making a purchase.
A lot of bad things can occur like identity theft. No one wants their identity taken.
So, many business have tried to produce this type of payment or monetary system to minimize the dangers of shopping online.
Many countries have actually successfully produced 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 money is transferred 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 permit the user to transfer money through mobile phones. I believe this is rather like what Chase lets their clients 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 concept of what is digital currency and how it is trying to take it’s place on the planet of e-commerce. There may be a bit more to it than I might explain in simply one small post but I believe you can get a great idea.