What Is Digital Currency-How Does It Work
What is digital currency? It is defined as: cash saved and moved in digital form. Sounds easy 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 confidential and untraceable back to the payer or user.
This means that hackers would no longer be able to gather personal information from people who use their credit cards to make online purchases. This would clearly decrease the number of stolen identities that take place every day.
To help you comprehend 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 different types out there, each with it’s own distinct 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 measure of security and if you hold this type of currency, you might potentially directly exchange it for solid gold bullion.
2. Centralized Currency Systems – these are like PayPal and these business permit you to send cash all over the world as long as you have cash in the account. For some services provided by these types of business, you get charged a charge on the receivers end of the deal.
3. Decentralized Currency Systems – Like Bitcoin are all based on cryptography and/or trust networks. Also called Hard Electronic Currency, it is planned to be more like using money to make your deal but your deal is non-refundable as soon as made. This kind of system just operates in one instructions.
The E-cash idea has progressed together with the development of the Internet. Individuals just do not feel comfy with giving their individual credit card info online when purchasing.
A lot of bad things can take place like identity theft. No one wants their identity stolen.
So, many companies have tried to produce this kind of payment or monetary system to decrease the threats of shopping online.
Many countries have successfully produced systems for “internal” use such as Hong Kong’s Octopus card. This card works just like a sort of debit card where the user loads money onto the card and then all the money 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 believe this is somewhat like what Chase lets their customers do. Their customers 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 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 little bit more to it than I might describe in simply one small short article but I believe you can get a great idea.