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What Is Digital Currency-How Does It Work
What is digital currency? It is defined as: cash stored and transferred in digital form. Sounds basic enough, however how does it all work?
This type of currency is thought to be good to use for making purchases on the internet due to the fact that if it works the way it was meant to, transactions should be rather anonymous and untraceable back to the payer or user.
This means that hackers would no longer have the ability to collect personal details from individuals who use their credit cards to make online purchases. This would undoubtedly decrease the number of stolen identities that take place every day.
To help you understand more of, “what is digital currency?” I have actually done quite a bit of research study on the subject and have found that there are a number of various types out there, each with it’s own unique qualities.
Here are simply a couple of with their descriptions following:
1. Digital Gold Currency – This type is backed by gold saved in vaults. The gold offers an extra step of security and if you hold this kind of currency, you might potentially directly exchange it for solid gold bullion.
2. Central Currency Systems – these are like PayPal and these business enable you to send out money all over the world as long as you have cash in the account. For some services provided 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 planned to be more like utilizing cash to make your transaction however your transaction is non-refundable once made. This kind of system only operates in one direction.
The E-cash concept has developed together with the development of the Internet. People simply do not feel comfy with offering their individual charge card details online when buying.
A lot of bad things can happen like identity theft. No one wants their identity stolen.
Lots of business have actually attempted to produce this type of payment or financial system to reduce the risks of shopping online.
Numerous countries have effectively created systems for “internal” use such as Hong Kong’s Octopus card. This card works much like a sort of debit card where the user loads money onto the card and then all the cash is transferred into a bank. They can then utilize the card for anything they need to utilize it for.
Some countries are dealing with or have systems that enable the user to move money through mobile devices. 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 on the planet of e-commerce. There may be a bit more to it than I could explain in simply one little article however I think you can get an excellent idea.