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What Is Digital Currency-How Does It Work
What is digital currency? It is defined as: cash saved and moved in digital type. Sounds basic enough, however how does it all work?
This kind of currency is thought to be great to utilize for making purchases on the internet due to the fact that if it works the way it was meant to, transactions should be rather confidential and untraceable back to the payer or user.
This indicates that hackers would no longer have the ability to gather individual details from individuals who use their credit cards to make online purchases. This would certainly reduce the variety of stolen identities that take place every day.
To help you comprehend more of, “what is digital currency?” I have actually done quite a bit of research on the subject and have discovered that there are several 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 stored in vaults. The gold offers an extra measure of security and if you hold this type of currency, you might possibly straight exchange it for solid gold bullion.
2. Centralized Currency Systems – these resemble PayPal and these companies allow you to send cash all over the world as long as you have money in the account. For some services provided by these types of companies, you get charged a cost on the receivers end of the deal.
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 cash to make your transaction but your deal is non-refundable once made. This type of system only works in one direction.
The E-cash idea has developed along with the development of the Internet. People just do not feel comfortable with providing their personal charge card details online when buying.
Too many bad things can take place like identity theft. Nobody wants their identity stolen.
Many companies have actually attempted to develop this type of payment or financial system to reduce the dangers of shopping online.
Numerous countries have effectively developed systems for “internal” use 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 money is deposited into a bank. They can then utilize the card for anything they require to use it for.
Some countries are dealing with or have systems that enable the user to transfer cash 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 gives you some concept of what is digital currency and how it is trying to take it’s place on the planet of e-commerce. There may be a bit more to it than I might explain in just one small article however I think you can get a good idea.