What Is Digital Currency-How Does It Work
What is digital currency? It is defined as: cash stored and moved in digital kind. Sounds simple enough, but how does it all work?
This type of currency is believed to be great to use for making purchases on the internet because if it works the method it was implied to, transactions should be rather confidential and untraceable back to the payer or user.
This indicates that hackers would no longer have the ability to collect personal info from people who utilize their credit cards to make online purchases. This would obviously reduce the variety of stolen identities that happen every day.
To assist you understand more of, “what is digital currency?” I have actually 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 unique qualities.
Here are just a couple of with their descriptions following:
1. Digital Gold Currency – This type is backed by gold stored in vaults. The gold supplies an extra measure of security and if you hold this type of currency, you could perhaps straight exchange it for solid gold bullion.
2. Centralized Currency Systems – these are like 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 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 planned to be more like using cash to make your transaction however your transaction is non-refundable when made. This type of system only works in one direction.
The E-cash concept has progressed together with the development of the Internet. Individuals simply do not feel comfortable with providing their personal charge card information online when purchasing.
Too many bad things can take place like identity theft. No one wants their identity stolen.
So, numerous business have actually attempted to develop this kind of payment or monetary system to decrease the threats of shopping online.
Many countries have actually successfully developed systems for “in-house” usage such as Hong Kong’s Octopus card. This card works much like a sort of debit card where the user loads cash onto the card and then all the money is transferred into a bank. They can then utilize the card for anything they require to use it for.
Some countries are working on or have systems that allow the user to move cash through mobile phones. I think this is somewhat like what Chase lets their consumers do. Their consumers can take an image of their check, front and back, with their phone and make their deposit electronically.
I do hope that this provides you some concept of what is digital currency and how it is trying to take it’s location on the planet of e-commerce. There may be a little more to it than I might explain in simply one little article however I think you can get a good concept.