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What Is Digital Currency-How Does It Work
What is digital currency? It is defined as: cash kept and transferred in digital kind. Sounds easy enough, but how does it all work?
This kind of currency is believed to be good to use for making purchases on the internet due to the fact that if it works the way it was suggested 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 individual info from individuals who utilize their credit cards to make online purchases. This would clearly reduce the number of taken identities that take place every day.
To help you understand more of, “what is digital currency?” I have done a fair bit of research on the subject and have found that there are numerous various types out there, each with it’s own unique qualities.
Here are simply a few with their descriptions following:
1. Digital Gold Currency – This type is backed by gold saved in vaults. The gold supplies an extra step of security and if you hold this kind of currency, you could possibly straight exchange it for solid gold bullion.
2. Centralized Currency Systems – these resemble PayPal and these business enable you to send out money all over the world as long as you have money in the account. For some services offered by these kinds of business, you get charged a fee 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 using cash to make your transaction however your transaction is non-refundable when made. This kind of system only operates in one direction.
The E-cash concept has actually evolved along with the evolution of the Web. Individuals just do not feel comfy with giving their personal credit card information over the Internet when purchasing.
Too many bad things can occur like identity theft. No one wants their identity taken.
Lots of business have actually tried to develop this type of payment or monetary system to reduce the dangers of shopping online.
Many countries have effectively developed systems for “in-house” use 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 transferred into a bank. They can then use the card for anything they need to utilize it for.
Some nations are working on or have systems that allow the user to move cash through mobile phones. I believe this is rather 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 digitally.
I do hope that this gives you some idea of what is digital currency and how it is trying to take it’s location in the world of e-commerce. There may be a bit more to it than I might explain in just one little article but I believe you can get a good concept.