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What Is Digital Currency-How Does It Work
What is digital currency? It is specified as: money saved and transferred in digital kind. Sounds basic enough, however how does it all work?
This kind of currency is thought to be great to use for making purchases on the internet due to the fact that if it works the way it was indicated to, transactions should be rather anonymous and untraceable back to the payer or user.
This implies that hackers would no longer have the ability to gather personal info from individuals who use their credit cards to make online purchases. This would clearly reduce the number of stolen identities that occur every day.
To help you comprehend more of, “what is digital currency?” I have actually done a fair bit of research study on the subject and have found that there are several different types out there, each with it’s own distinct qualities.
Here are simply a few with their descriptions following:
1. Digital Gold Currency – This type is backed by gold saved in vaults. The gold provides an additional procedure of security and if you hold this kind of currency, you could possibly straight exchange it for solid gold bullion.
2. Central Currency Systems – these are like PayPal and these business allow you to send out money all over the world as long as you have cash in the account. For some services offered by these types 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. Called Hard Electronic Currency, it is meant to be more like using cash to make your transaction however your transaction is non-refundable once made. This type of system just works in one direction.
The E-cash concept has developed along with the development of the Internet. Individuals simply do not feel comfortable with providing their individual credit card info online when purchasing.
Too many bad things can occur like identity theft. No one wants their identity stolen.
So, many business have actually tried to produce this type of payment or monetary system to reduce the threats of shopping online.
Many countries have effectively created systems for “internal” usage 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 after that 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 dealing with or have systems that permit the user to move cash through mobile devices. I think this is rather like what Chase lets their customers 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 gives you some concept of what is digital currency and how it is trying to take it’s location on the planet of e-commerce. There may be a little bit more to it than I might explain in simply one small post however I think you can get an excellent idea.