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What Is Digital Currency-How Does It Work
What is digital currency? It is specified as: cash stored and transferred in digital form. Sounds easy enough, however how does it all work?
This type of currency is believed to be great to utilize for making purchases on the internet due to the fact that if it works the way it was indicated to, deals should be rather confidential and untraceable back to the payer or user.
This implies that hackers would no longer be able to collect personal details from people who use their charge card to make online purchases. This would certainly decrease the number of stolen identities that happen every day.
To assist you comprehend more of, “what is digital currency?” I have done a fair bit of research on the subject and have discovered 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 stored in vaults. The gold supplies an additional step of security and if you hold this type of currency, you could possibly straight exchange it for solid gold bullion.
2. Centralized Currency Systems – these resemble PayPal and these companies permit you to send money all over the world as long as you have money in the account. For some services offered by these kinds of business, you get charged a charge 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 intended to be more like using cash to make your deal however your deal is non-refundable as soon as made. This kind of system only works in one direction.
The E-cash idea has evolved along with the development of the Internet. Individuals simply do not feel comfortable with providing their individual credit card information over the Internet when making a purchase.
Too many bad things can occur like identity theft. No one wants their identity taken.
Many companies have tried to produce this type of payment or monetary system to reduce the risks of shopping online.
Many countries have actually effectively developed systems for “internal” 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 need to use it for.
Some countries are dealing with or have systems that allow the user to move money through mobile devices. I think this is somewhat like what Chase lets their customers do. Their clients can take a picture of their check, front and back, with their phone and make their deposit electronically.
I do hope that this gives you some concept of what is digital currency and how it is trying to take it’s location in the world of e-commerce. There might be a little more to it than I could explain in just one little post but I think you can get a great concept.