Binance Labs Fellow Grin
What Is Digital Currency-How Does It Work
What is digital currency? It is defined as: cash kept and moved in digital form. Sounds basic enough, however how does it all work?
This kind of currency is thought to be good to use for making purchases on the internet because if it works the method it was meant to, transactions must be rather anonymous and untraceable back to the payer or user.
This indicates that hackers would no longer be able to collect personal info from individuals who use their charge card to make online purchases. This would certainly reduce the variety of taken identities that take place every day.
To assist you comprehend more of, “what is digital currency?” I have done quite a bit of research on the subject and have found that there are a number of 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 kept in vaults. The gold provides an extra step 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 resemble PayPal and these business permit 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 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 utilizing cash to make your deal but your deal is non-refundable once made. This type of system just operates in one instructions.
The E-cash concept has developed along with the evolution of the Internet. People simply do not feel comfortable with giving their individual charge card info online when buying.
Too many bad things can happen like identity theft. Nobody desires their identity stolen.
Many companies have attempted to create this type of payment or financial system to lessen the risks of shopping online.
Numerous nations have effectively created systems for “in-house” use 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 deposited 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 phones. I believe this is rather like what Chase lets their clients 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 gives you some concept of what is digital currency and how it is attempting to take it’s place worldwide of e-commerce. There might be a little more to it than I might explain in just one small short article however I believe you can get an excellent idea.