What Is Digital Currency-How Does It Work
What is digital currency? It is defined as: cash kept and transferred in digital form. Sounds simple enough, but how does it all work?
This kind of currency is believed to be great to utilize for making purchases on the internet because if it works the method it was implied to, transactions need to be rather anonymous and untraceable back to the payer or user.
This suggests that hackers would no longer have the ability to collect individual information from people who utilize their credit cards to make online purchases. This would certainly decrease 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 on the subject and have actually found that there are numerous various 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 extra measure of security and if you hold this kind of currency, you could perhaps directly exchange it for solid gold bullion.
2. Centralized Currency Systems – these are like PayPal and these business enable you to send out cash all over the world as long as you have money in the account. For some services supplied by these types of business, you get charged a cost 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 utilizing cash to make your deal but your transaction is non-refundable when made. This kind of system only works in one direction.
The E-cash idea has actually evolved along with the evolution of the Web. People simply do not feel comfy with giving their personal charge card information over the Internet when buying.
Too many bad things can happen like identity theft. No one wants their identity taken.
Many business have actually attempted to produce this type of payment or financial system to minimize the risks of shopping online.
Lots of countries have effectively developed systems for “internal” use 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 then all the cash is transferred 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 enable the user to transfer money through mobile devices. I believe this is rather like what Chase lets their customers do. Their consumers can take an image of their check, front and back, with their phone and make their deposit digitally.
I do hope that this provides you some concept of what is digital currency and how it is attempting to take it’s place in the world of e-commerce. There may be a bit more to it than I might explain in just one small post but I think you can get an excellent concept.