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What Is Digital Currency-How Does It Work
What is digital currency? It is defined as: cash kept and moved in digital form. Sounds easy enough, but how does it all work?
This type of currency is believed to be good to use for making purchases on the internet since if it works the way it was implied to, deals need to be rather anonymous and untraceable back to the payer or user.
This suggests that hackers would no longer be able to gather individual info from individuals who utilize their credit cards to make online purchases. This would certainly decrease the variety of stolen identities that happen every day.
To assist you comprehend more of, “what is digital currency?” I have done quite a bit of research on the subject and have actually discovered that there are several different types out there, each with it’s own special qualities.
Here are simply a couple of with their descriptions following:
1. Digital Gold Currency – This type is backed by gold stored in vaults. The gold offers an extra measure of security and if you hold this kind of currency, you could potentially straight exchange it for solid gold bullion.
2. Central Currency Systems – these are like PayPal and these companies allow you to send cash all over the world as long as you have money in the account. For some services supplied by these types of companies, you get charged a cost on the receivers end of the transaction.
3. Decentralized Currency Systems – Like Bitcoin are all based on cryptography and/or trust networks. Likewise called Hard Electronic Currency, it is meant to be more like utilizing cash to make your transaction but your transaction is non-refundable once made. This kind of system only works in one direction.
The E-cash concept has actually developed along with the development of the Internet. Individuals simply do not feel comfortable with offering their individual charge card information online when making a purchase.
Too many bad things can occur like identity theft. No one desires their identity stolen.
Lots of companies have attempted to produce this type of payment or monetary system to minimize the risks of shopping online.
Lots of nations have effectively produced systems for “internal” use such as Hong Kong’s Octopus card. This card works similar to 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 utilize the card for anything they need to utilize it for.
Some countries are working on or have systems that allow the user to move cash through mobile phones. I believe this is rather like what Chase lets their clients do. Their consumers can take a photo 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 place on the planet of e-commerce. There may be a little bit more to it than I could describe in just one little post but I believe you can get an excellent concept.