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What Is Digital Currency-How Does It Work
What is digital currency? It is specified as: cash saved and moved in digital form. Sounds easy enough, but how does it all work?
This type of currency is believed to be good to use for making purchases on the internet due to the fact that if it works the way it was meant to, deals should be rather confidential and untraceable back to the payer or user.
This means that hackers would no longer be able to collect personal information from individuals who use their credit cards to make online purchases. This would obviously reduce the number of stolen identities that happen every day.
To help you understand more of, “what is digital currency?” I have actually done quite a bit of research on the subject and have actually discovered that there are a number of different types out there, each with it’s own special qualities.
Here are simply a few with their descriptions following:
1. Digital Gold Currency – This type is backed by gold kept in vaults. The gold supplies an additional measure of security and if you hold this kind of currency, you could perhaps directly exchange it for solid gold bullion.
2. Centralized 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 offered by these types of business, you get charged a fee on the receivers end of the deal.
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 money to make your transaction but your deal is non-refundable as soon as made. This type of system only works in one direction.
The E-cash idea has actually progressed along with the advancement of the Web. People just do not feel comfy with giving their individual charge card information online when purchasing.
A lot of bad things can occur like identity theft. No one desires their identity taken.
Many companies have actually tried to produce this type of payment or monetary system to lessen the dangers of shopping online.
Many countries have successfully produced systems for “internal” usage such as Hong Kong’s Octopus card. This card works much like a sort of debit card where the user loads money onto the card and then all the cash is deposited into a bank. They can then use the card for anything they need to use it for.
Some countries are working on or have systems that permit the user to transfer money through mobile devices. I think this is rather like what Chase lets their consumers do. Their customers can take an image of their check, front and back, with their phone and make their deposit electronically.
I do hope that this gives you some idea of what is digital currency and how it is trying to take it’s place worldwide of e-commerce. There might be a little bit more to it than I could describe in just one small post but I believe you can get an excellent concept.