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What Is Digital Currency-How Does It Work
What is digital currency? It is defined as: money stored and transferred in digital type. Sounds easy enough, however how does it all work?
This type of currency is thought to be good to utilize for making purchases on the internet since if it works the way it was meant to, transactions must be rather anonymous and untraceable back to the payer or user.
This indicates that hackers would no longer be able to collect personal information from people who utilize their credit cards to make online purchases. This would obviously reduce the number of taken identities that occur every day.
To assist 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 a number of various types out there, each with it’s own unique qualities.
Here are simply a few with their descriptions following:
1. Digital Gold Currency – This type is backed by gold stored in vaults. The gold offers 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 are like PayPal and these business enable you to send out cash all over the world as long as you have money in the account. For some services supplied by these types of business, you get charged a charge on the receivers end of the deal.
3. Decentralized Currency Systems – Like Bitcoin are all based upon cryptography and/or trust networks. 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 actually progressed along with the advancement of the Internet. People simply do not feel comfortable with giving their individual credit card information over the Internet when making a purchase.
Too many bad things can take place like identity theft. No one wants their identity stolen.
Many business have tried to produce this type of payment or financial system to minimize the dangers of shopping online.
Many nations have actually effectively created systems for “internal” use such as Hong Kong’s Octopus card. This card works similar to a sort of debit card where the user loads cash onto the card and then all the money is deposited 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 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 electronically.
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 may be a bit more to it than I could describe in just one little article however I believe you can get a good idea.