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What Is Digital Currency-How Does It Work
What is digital currency? It is defined as: money stored and transferred in digital kind. Sounds basic enough, but how does it all work?
This kind of currency is believed to be good to utilize for making purchases on the internet due to the fact that if it works the way it was implied to, deals should be rather anonymous and untraceable back to the payer or user.
This means that hackers would no longer be able to gather personal info from people who use their credit cards to make online purchases. This would obviously reduce the number of stolen identities that happen every day.
To assist you understand more of, “what is digital currency?” I have actually 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 distinct 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 provides an additional measure of security and if you hold this kind of currency, you could perhaps straight exchange it for solid gold bullion.
2. Centralized Currency Systems – these are like 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 supplied by these kinds of companies, you get charged a charge on the receivers end of the transaction.
3. Decentralized Currency Systems – Like Bitcoin are all based on cryptography and/or trust networks. Also called Hard Electronic Currency, it is meant to be more like utilizing cash to make your transaction but your transaction is non-refundable when made. This type of system only operates in one direction.
The E-cash concept has actually developed in addition to the development of the Internet. Individuals just do not feel comfortable with providing their individual credit card info over the Internet when buying.
Too many bad things can happen like identity theft. No one desires their identity stolen.
So, numerous business have tried to produce this kind of payment or monetary system to minimize the dangers of shopping online.
Lots of countries have effectively created 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 money onto the card and after that all the cash is transferred into a bank. They can then use the card for anything they need to use it for.
Some nations are working on or have systems that permit the user to transfer money through mobile devices. I think this is somewhat like what Chase lets their consumers do. Their customers can take a photo 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 attempting to take it’s location in the world of e-commerce. There may be a little bit more to it than I might describe in simply one little short article but I believe you can get a great idea.