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What Is Digital Currency-How Does It Work
What is digital currency? It is specified 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 great 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 means that hackers would no longer be able to gather individual information from individuals who utilize their credit cards to make online purchases. This would clearly reduce the number of stolen identities that happen 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 actually found that there are numerous different 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 kept in vaults. The gold offers an additional measure of security and if you hold this kind of currency, you might perhaps straight exchange it for solid gold bullion.
2. Centralized Currency Systems – these are like PayPal and these companies enable you to send out cash all over the world as long as you have cash in the account. For some services offered 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 upon cryptography and/or trust networks. Called Hard Electronic Currency, it is planned to be more like using cash to make your deal but your transaction is non-refundable once made. This kind of system only works in one direction.
The E-cash idea has progressed along with the development of the Internet. Individuals simply do not feel comfy with providing their individual credit card details over the Internet when making a purchase.
A lot of bad things can happen like identity theft. Nobody desires their identity stolen.
So, lots of companies have tried to create this kind of payment or monetary system to decrease the threats of shopping online.
Numerous countries have actually successfully created systems for “internal” use such as Hong Kong’s Octopus card. This card works much like a sort of debit card where the user loads money onto the card and after that all the cash is deposited into a bank. They can then use the card for anything they require to use it for.
Some nations are working on or have systems that permit the user to move money through mobile phones. I think this is somewhat like what Chase lets their consumers do. Their consumers 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 idea of what is digital currency and how it is trying to take it’s place on the planet of e-commerce. There may be a bit more to it than I might explain in just one small post but I think you can get a good concept.