What Is Digital Currency-How Does It Work
What is digital currency? It is defined as: money stored and moved in digital kind. Sounds simple enough, however how does it all work?
This type of currency is thought to be great to utilize for making purchases on the internet due to the fact that if it works the method it was indicated to, transactions ought to be rather anonymous and untraceable back to the payer or user.
This indicates that hackers would no longer be able to collect personal information from people who use their credit cards to make online purchases. This would certainly decrease the variety of stolen identities that happen every day.
To help you understand more of, “what is digital currency?” I have actually done a fair bit of research on the subject and have found that there are a number of various types out there, each with it’s own distinct 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 offers an additional step of security and if you hold this type of currency, you could potentially straight exchange it for solid gold bullion.
2. Centralized Currency Systems – these resemble PayPal and these companies permit you to send out cash all over the world as long as you have money in the account. For some services provided by these types of companies, you get charged a fee on the receivers end of the deal.
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 however your transaction is non-refundable as soon as made. This kind of system only operates in one direction.
The E-cash concept has developed along with the advancement of the Web. People just do not feel comfortable with giving their personal credit card info online when making a purchase.
A lot of bad things can take place like identity theft. No one desires their identity taken.
Numerous companies have tried to develop this type of payment or financial system to reduce the threats of shopping online.
Lots of countries have actually successfully produced systems for “in-house” use 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 deposited into a bank. They can then utilize the card for anything they need to utilize it for.
Some nations are dealing with 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 customers can take an image of their check, front and back, with their phone and make their deposit electronically.
I do hope that this gives you some idea of what is digital currency and how it is trying to take it’s place in the world of e-commerce. There might be a little bit more to it than I might explain in just one little post however I think you can get a good concept.