What Is Digital Currency-How Does It Work
What is digital currency? It is defined as: cash stored and moved in digital kind. Sounds simple enough, however how does it all work?
This kind of currency is believed to be excellent to utilize for making purchases on the internet due to the fact that if it works the method it was suggested to, deals need to be rather anonymous and untraceable back to the payer or user.
This means that hackers would no longer be able to collect personal info from individuals who utilize their credit cards to make online purchases. This would undoubtedly reduce the variety of taken identities that take place every day.
To help you understand more of, “what is digital currency?” I have done quite a bit of research study on the subject and have found that there are a number of different types out there, each with it’s own unique qualities.
Here are simply a couple of with their descriptions following:
1. Digital Gold Currency – This type is backed by gold kept in vaults. The gold provides an additional step of security and if you hold this kind of currency, you could potentially directly exchange it for solid gold bullion.
2. Centralized Currency Systems – these resemble PayPal and these business permit you to send money all over the world as long as you have cash in the account. For some services offered by these kinds of business, 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 intended to be more like using cash to make your transaction however your deal is non-refundable as soon as made. This type of system only works in one direction.
The E-cash concept has actually evolved along with the evolution of the Web. Individuals just do not feel comfortable with giving their individual charge card info over the Internet when making a purchase.
Too many bad things can take place like identity theft. No one desires their identity stolen.
So, lots of business have actually tried to produce this type of payment or monetary system to lessen the risks of shopping online.
Many countries have 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 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 allow the user to transfer money through mobile phones. 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 electronically.
I do hope that this provides 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 bit more to it than I might explain in just one small short article but I think you can get a good idea.