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What Is Digital Currency-How Does It Work
What is digital currency? It is defined as: cash stored and transferred in digital type. Sounds simple enough, however how does it all work?
This kind of currency is thought to be great to utilize for making purchases on the internet because if it works the way it was suggested to, deals should 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 obviously reduce the number of taken identities that happen every day.
To help you comprehend more of, “what is digital currency?” I have done quite a bit of research study on the subject and have found that there are numerous 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 saved in vaults. The gold provides an extra measure of security and if you hold this kind of currency, you could potentially straight exchange it for solid gold bullion.
2. Centralized Currency Systems – these resemble PayPal and these companies enable you to send money all over the world as long as you have money in the account. For some services offered by these types of business, you get charged a charge 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 meant to be more like using cash to make your deal however your transaction is non-refundable once made. This kind of system only operates in one direction.
The E-cash idea has actually evolved along with the development of the Internet. People simply do not feel comfortable with providing their personal credit card details online when making a purchase.
A lot of bad things can happen like identity theft. No one wants their identity stolen.
Many companies have actually attempted to create this type of payment or financial 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 after that all the cash is transferred into a bank. They can then use the card for anything they require to use it for.
Some nations are dealing with or have systems that enable the user to transfer money through mobile phones. I think this is somewhat like what Chase lets their customers do. Their clients 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 in the world of e-commerce. There may be a bit more to it than I could describe in just one small post however I think you can get a good concept.