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What Is Digital Currency-How Does It Work
What is digital currency? It is specified as: money kept and transferred in digital form. Sounds easy enough, but how does it all work?
This kind of currency is believed to be excellent to use for making purchases on the internet because if it works the method it was suggested 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 individual info from people who utilize their credit cards to make online purchases. This would obviously decrease the variety of stolen identities that happen 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 discovered that there are several different types out there, each with it’s own special qualities.
Here are just a couple of with their descriptions following:
1. Digital Gold Currency – This type is backed by gold stored in vaults. The gold provides an extra step of security and if you hold this type of currency, you could potentially directly exchange it for solid gold bullion.
2. Central Currency Systems – these are like PayPal and these companies permit you to send cash 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 upon cryptography and/or trust networks. Called Hard Electronic Currency, it is intended to be more like using cash to make your transaction however your transaction is non-refundable as soon as made. This type of system only operates in one instructions.
The E-cash concept has progressed together with the development of the Web. People simply do not feel comfy with providing their personal charge card details over the Internet when making a purchase.
Too many bad things can happen like identity theft. Nobody wants their identity taken.
So, numerous business have tried to develop this type of payment or monetary system to decrease the dangers of shopping online.
Many countries have effectively 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 money is deposited into a bank. They can then utilize the card for anything they need to utilize it for.
Some nations are dealing with or have systems that enable the user to move cash through mobile phones. I think this is somewhat like what Chase lets their customers do. Their clients can take a photo of their check, front and back, with their phone and make their deposit digitally.
I do hope that this gives you some idea of what is digital currency and how it is trying to take it’s location worldwide of e-commerce. There may be a little more to it than I could explain in just one small article but I think you can get a good idea.