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What Is Digital Currency-How Does It Work
What is digital currency? It is defined as: money saved and moved in digital form. Sounds easy enough, but how does it all work?
This kind of currency is thought to be excellent to use for making purchases on the internet since if it works the method it was suggested to, transactions must be rather confidential and untraceable back to the payer or user.
This means that hackers would no longer have the ability to gather personal details from individuals who use their credit cards to make online purchases. This would obviously reduce the number of stolen identities that take place every day.
To assist you understand more of, “what is digital currency?” I have done quite a bit of research on the subject and have actually found that there are several different types out there, each with it’s own special qualities.
Here are simply a few with their descriptions following:
1. Digital Gold Currency – This type is backed by gold kept in vaults. The gold provides an additional step of security and if you hold this kind of currency, you might possibly directly exchange it for solid gold bullion.
2. Centralized Currency Systems – these resemble 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 cost 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 utilizing cash to make your deal but your deal is non-refundable when made. This type of system just works in one instructions.
The E-cash concept has developed together with the evolution of the Web. Individuals just do not feel comfy with giving their individual charge card info online when making a purchase.
Too many bad things can take place like identity theft. No one wants their identity taken.
So, lots of business have tried to develop this kind of payment or monetary system to reduce the risks of shopping online.
Lots of countries have actually successfully created systems for “internal” usage 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 cash is transferred into a bank. They can then utilize the card for anything they need to use it for.
Some countries are working on or have systems that allow the user to transfer money through mobile devices. I think this is somewhat like what Chase lets their customers do. Their clients 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 concept of what is digital currency and how it is trying to take it’s location on the planet of e-commerce. There might be a little more to it than I might explain in just one little article however I believe you can get an excellent idea.