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What Is Digital Currency-How Does It Work
What is digital currency? It is defined as: money kept and moved in digital type. Sounds easy enough, however how does it all work?
This kind of currency is believed to be great to use for making purchases on the internet because if it works the method it was indicated to, transactions need to be rather anonymous and untraceable back to the payer or user.
This indicates 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 decrease the variety of taken identities that happen every day.
To help you understand more of, “what is digital currency?” I have done a fair bit of research on the subject and have found 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 kept in vaults. The gold supplies an additional measure of security and if you hold this kind of currency, you could perhaps 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 kinds 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. Also called Hard Electronic Currency, it is planned to be more like using cash to make your transaction however your transaction is non-refundable once made. This type of system just operates in one direction.
The E-cash idea has evolved in addition to the advancement of the Web. People simply do not feel comfortable with offering their individual charge card info online when purchasing.
Too many bad things can happen like identity theft. Nobody desires their identity taken.
Numerous business have attempted to produce this type of payment or financial system to reduce the dangers of shopping online.
Many countries have successfully developed systems for “in-house” 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 utilize the card for anything they require to utilize it for.
Some countries are dealing with or have systems that allow the user to transfer money through mobile phones. I believe this is somewhat like what Chase lets their consumers do. Their customers can take a photo of their check, front and back, with their phone and make their deposit electronically.
I do hope that this provides you some concept of what is digital currency and how it is trying to take it’s location in the world of e-commerce. There might be a little more to it than I might describe in just one little short article but I think you can get a good idea.