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What Is Digital Currency-How Does It Work
What is digital currency? It is defined as: money saved and transferred in digital form. Sounds simple enough, but how does it all work?
This type of currency is thought to be great to use for making purchases on the internet because if it works the way it was suggested to, transactions need to be rather confidential and untraceable back to the payer or user.
This indicates that hackers would no longer be able to gather individual information from individuals who utilize their credit cards to make online purchases. This would undoubtedly decrease the variety of taken identities that take place every day.
To help you understand more of, “what is digital currency?” I have actually done a fair bit of research on the subject and have discovered that there are numerous different types out there, each with it’s own special qualities.
Here are simply a couple of with their descriptions following:
1. Digital Gold Currency – This type is backed by gold kept in vaults. The gold provides an extra step of security and if you hold this type of currency, you could perhaps directly exchange it for solid gold bullion.
2. Centralized Currency Systems – these resemble PayPal and these business allow you to send money all over the world as long as you have money in the account. For some services offered by these types of companies, you get charged a charge on the receivers end of the transaction.
3. Decentralized Currency Systems – Like Bitcoin are all based upon cryptography and/or trust networks. Likewise called Hard Electronic Currency, it is planned to be more like utilizing cash to make your deal but your deal is non-refundable once made. This type of system only works in one instructions.
The E-cash concept has evolved in addition to the evolution of the Internet. People just do not feel comfy with giving their individual credit card info online when purchasing.
A lot of bad things can occur like identity theft. Nobody desires their identity taken.
So, lots of business have actually attempted to produce this type of payment or monetary system to reduce the threats of shopping online.
Many countries have actually successfully 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 cash onto the card and then all the cash is deposited into a bank. They can then use the card for anything they require to use it for.
Some countries are dealing with or have systems that permit the user to transfer cash through mobile devices. I think this is somewhat like what Chase lets their consumers do. Their customers can take an image of their check, front and back, with their phone and make their deposit digitally.
I do hope that this gives you some idea of what is digital currency and how it is attempting to take it’s location worldwide of e-commerce. There may be a little more to it than I could describe in just one small post but I think you can get a great concept.