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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 type. Sounds simple enough, however how does it all work?
This type of currency is thought to be excellent to use for making purchases on the internet due to the fact that if it works the method it was suggested to, transactions must be rather anonymous and untraceable back to the payer or user.
This indicates that hackers would no longer have the ability to gather individual information from people who use their charge card to make online purchases. This would clearly reduce the number of stolen 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 actually found that there are a number of various types out there, each with it’s own unique qualities.
Here are just a few with their descriptions following:
1. Digital Gold Currency – This type is backed by gold stored in vaults. The gold provides an extra step of security and if you hold this kind of currency, you might possibly straight exchange it for solid gold bullion.
2. Central Currency Systems – these are like PayPal and these business permit you to send out money all over the world as long as you have money in the account. For some services provided 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 on cryptography and/or trust networks. Also called Hard Electronic Currency, it is meant to be more like using cash to make your transaction however your transaction is non-refundable as soon as made. This kind of system just operates in one direction.
The E-cash concept has actually evolved along with the advancement of the Internet. Individuals simply do not feel comfortable with providing their personal credit card information online when buying.
A lot of bad things can happen like identity theft. No one desires their identity taken.
So, lots of companies have tried to develop this type of payment or monetary system to reduce the threats of shopping online.
Numerous nations have 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 after that all the money is deposited into a bank. They can then use the card for anything they need to utilize it for.
Some countries are working on or have systems that enable the user to move money through mobile phones. I believe this is somewhat like what Chase lets their clients do. Their customers can take a picture of their check, front and back, with their phone and make their deposit electronically.
I do hope that this offers 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 may be a little bit more to it than I could describe in simply one small article but I believe you can get a great idea.