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What Is Digital Currency-How Does It Work
What is digital currency? It is specified as: cash stored and moved in digital form. Sounds simple enough, but how does it all work?
This kind of currency is thought to be excellent to use for making purchases on the internet because if it works the way it was implied to, transactions must be rather confidential and untraceable back to the payer or user.
This means that hackers would no longer be able to collect individual details from individuals who utilize their credit cards to make online purchases. This would obviously reduce the number of taken identities that take place 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 numerous different 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 kept in vaults. The gold offers an additional measure of security and if you hold this type of currency, you might potentially straight exchange it for solid gold bullion.
2. Centralized Currency Systems – these are like PayPal and these business enable you to send out 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 fee on the receivers end of the transaction.
3. Decentralized Currency Systems – Like Bitcoin are all based on cryptography and/or trust networks. Called Hard Electronic Currency, it is intended to be more like using money to make your transaction but your transaction is non-refundable once made. This type of system just works in one instructions.
The E-cash idea has actually developed along with the development of the Web. People just do not feel comfy with giving their individual credit card information over the Internet when making a purchase.
A lot of bad things can happen like identity theft. Nobody wants their identity stolen.
Lots of companies have attempted to develop this type of payment or financial system to decrease the risks of shopping online.
Numerous countries have actually successfully created systems for “internal” 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 countries are dealing with or have systems that permit the user to move cash through mobile phones. I believe this is somewhat like what Chase lets their clients do. Their customers 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 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 article however I think you can get a good concept.