What Is Digital Currency-How Does It Work
What is digital currency? It is specified as: cash kept and transferred in digital form. Sounds basic enough, but how does it all work?
This kind of currency is believed to be good to utilize for making purchases on the internet since 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 be able to collect individual information from people who use their charge card to make online purchases. This would obviously decrease the number of stolen identities that occur every day.
To help you understand more of, “what is digital currency?” I have done quite a 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 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 additional procedure of security and if you hold this kind of currency, you could possibly directly 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 supplied 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. Also called Hard Electronic Currency, it is meant to be more like using cash to make your transaction but your transaction is non-refundable when made. This type of system only operates in one direction.
The E-cash idea has actually progressed along with the development of the Internet. Individuals simply do not feel comfy with offering their personal credit card details over the Internet when purchasing.
Too many bad things can take place like identity theft. No one wants their identity stolen.
Many companies have actually tried to develop this type of payment or financial system to minimize the risks of shopping online.
Numerous nations have successfully created systems for “internal” 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 utilize the card for anything they require to utilize it for.
Some countries are working on or have systems that enable the user to transfer cash through mobile phones. I think this is somewhat like what Chase lets their consumers do. Their clients can take a photo of their check, front and back, with their phone and make their deposit digitally.
I do hope that this provides you some concept of what is digital currency and how it is attempting to take it’s place in the world of e-commerce. There might be a bit more to it than I could explain in simply one little short article but I think you can get a great idea.