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What Is Digital Currency-How Does It Work
What is digital currency? It is defined as: money kept and transferred in digital form. Sounds simple enough, but how does it all work?
This type of currency is thought to be excellent to use for making purchases on the internet due to the fact that if it works the way it was implied to, transactions need to be rather anonymous and untraceable back to the payer or user.
This indicates that hackers would no longer have the ability to collect individual details from people who use their credit cards to make online purchases. This would clearly reduce the number of stolen identities that occur every day.
To assist you comprehend more of, “what is digital currency?” I have done a fair bit of research study on the subject and have actually found that there are a number of different types out there, each with it’s own special qualities.
Here are just a few with their descriptions following:
1. Digital Gold Currency – This type is backed by gold saved in vaults. The gold offers an additional measure of security and if you hold this kind of currency, you could perhaps directly exchange it for solid gold bullion.
2. Central Currency Systems – these resemble PayPal and these companies permit you to send out money all over the world as long as you have money in the account. For some services provided by these kinds of companies, you get charged a cost 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 meant to be more like using money to make your deal however your deal is non-refundable when made. This type of system only works in one direction.
The E-cash concept has evolved in addition to the advancement of the Internet. Individuals just do not feel comfortable with offering their individual credit card info online when purchasing.
Too many bad things can take place like identity theft. No one wants their identity taken.
Numerous business have actually tried to create this type of payment or financial system to decrease the threats of shopping online.
Numerous nations have successfully created systems for “in-house” usage 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 then 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 believe this is somewhat like what Chase lets their clients do. Their consumers can take a picture of their check, front and back, with their phone and make their deposit electronically.
I do hope that this offers you some idea of what is digital currency and how it is trying to take it’s place worldwide of e-commerce. There may be a little bit more to it than I could describe in simply one small short article but I think you can get a great idea.