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What Is Digital Currency-How Does It Work
What is digital currency? It is defined as: cash kept and moved in digital kind. Sounds easy enough, but how does it all work?
This type of currency is thought to be great to use for making purchases on the internet due to the fact that if it works the method it was meant to, transactions should be rather confidential and untraceable back to the payer or user.
This suggests that hackers would no longer be able to collect individual information from individuals who use their credit cards to make online purchases. This would obviously decrease the number 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 discovered that there are numerous various types out there, each with it’s own distinct 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 step of security and if you hold this kind of currency, you could potentially straight 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 money 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. Called Hard Electronic Currency, it is planned to be more like using cash to make your deal however your transaction is non-refundable as soon as made. This type of system just works in one direction.
The E-cash idea has actually evolved together with the advancement of the Web. Individuals simply do not feel comfy with providing their individual credit card information over the Internet when buying.
A lot of bad things can occur like identity theft. Nobody wants their identity stolen.
So, numerous companies have actually tried to develop this kind of payment or monetary system to reduce the risks of shopping online.
Lots of nations have successfully created 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 cash onto the card and after that all the money is deposited into a bank. They can then use the card for anything they need to use it for.
Some nations are working on or have systems that enable the user to move cash through mobile phones. I believe this is somewhat like what Chase lets their consumers do. Their consumers can take a picture of their check, front and back, with their phone and make their deposit electronically.
I do hope that this provides you some idea of what is digital currency and how it is trying to take it’s place worldwide of e-commerce. There may be a bit more to it than I could explain in simply one little short article but I believe you can get a great concept.