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What Is Digital Currency-How Does It Work
What is digital currency? It is defined as: money kept and moved in digital kind. Sounds basic enough, however how does it all work?
This type of currency is believed to be good to use for making purchases on the internet due to the fact that if it works the method it was indicated to, transactions must be rather anonymous and untraceable back to the payer or user.
This implies that hackers would no longer have the ability to gather personal information from individuals who use their credit cards to make online purchases. This would certainly reduce the variety of stolen identities that occur 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 found that there are numerous different 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 saved in vaults. The gold supplies an additional step of security and if you hold this type of currency, you could perhaps straight exchange it for solid gold bullion.
2. Centralized Currency Systems – these are like PayPal and these business allow you to send cash all over the world as long as you have cash in the account. For some services offered by these types of business, you get charged a charge 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 planned to be more like using cash to make your transaction but your deal is non-refundable as soon as made. This type of system just works in one direction.
The E-cash concept has actually evolved along with the advancement of the Internet. People just do not feel comfy with giving their individual credit card details online when purchasing.
Too many bad things can occur like identity theft. No one wants their identity stolen.
Many companies have attempted to develop this type of payment or financial system to reduce the dangers of shopping online.
Numerous nations have successfully developed 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 cash onto the card and then all the money 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 enable the user to move cash through mobile phones. I believe this is somewhat 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 electronically.
I do hope that this offers you some idea of what is digital currency and how it is attempting to take it’s location on the planet of e-commerce. There may be a bit more to it than I might explain in simply one little post but I believe you can get a good idea.