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What Is Digital Currency-How Does It Work
What is digital currency? It is defined as: money stored and moved in digital type. Sounds easy enough, but how does it all work?
This kind 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 indicated to, transactions ought to be rather anonymous and untraceable back to the payer or user.
This means that hackers would no longer be able to collect personal info from people who use their credit cards to make online purchases. This would obviously reduce the variety of stolen identities that occur every day.
To help you comprehend more of, “what is digital currency?” I have done a fair bit of research on the subject and have actually found that there are a number of different types out there, each with it’s own special qualities.
Here are just a couple of with their descriptions following:
1. Digital Gold Currency – This type is backed by gold kept in vaults. The gold supplies an extra step of security and if you hold this type of currency, you could perhaps directly exchange it for solid gold bullion.
2. Centralized Currency Systems – these are like PayPal and these business enable you to send cash 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 fee on the receivers end of the transaction.
3. Decentralized Currency Systems – Like Bitcoin are all based on cryptography and/or trust networks. Called Hard Electronic Currency, it is planned to be more like using cash to make your deal however your transaction is non-refundable once made. This kind of system only operates in one direction.
The E-cash idea has evolved along with the development of the Web. People simply do not feel comfy with giving their personal credit card information online when purchasing.
Too many bad things can occur like identity theft. No one desires their identity stolen.
Many companies have tried to develop this type of payment or monetary system to minimize the risks of shopping online.
Many countries have successfully developed 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 money onto the card and then all the cash is deposited into a bank. They can then use the card for anything they need to use it for.
Some countries are dealing with or have systems that permit the user to move money through mobile phones. I think this is rather like what Chase lets their clients do. Their clients can take a picture of their check, front and back, with their phone and make their deposit digitally.
I do hope that this offers you some concept of what is digital currency and how it is attempting to take it’s location worldwide of e-commerce. There may be a bit more to it than I could describe in simply one little post however I believe you can get a great concept.