Binance Chief Strategy Officer
What Is Digital Currency-How Does It Work
What is digital currency? It is specified as: cash kept and moved in digital type. Sounds easy enough, however how does it all work?
This type of currency is thought to be great to utilize for making purchases on the internet since if it works the way it was suggested to, transactions ought to be rather anonymous and untraceable back to the payer or user.
This indicates that hackers would no longer have the ability to gather individual details from people who utilize their charge card to make online purchases. This would clearly decrease the number of taken identities that occur 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 different types out there, each with it’s own unique qualities.
Here are just a few with their descriptions following:
1. Digital Gold Currency – This type is backed by gold stored in vaults. The gold provides an extra measure of security and if you hold this kind of currency, you might possibly directly exchange it for solid gold bullion.
2. Central Currency Systems – these resemble PayPal and these companies permit 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 fee on the receivers end of the deal.
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 money to make your deal but your transaction is non-refundable once made. This type of system only works in one direction.
The E-cash concept has evolved in addition to the development of the Internet. People simply do not feel comfortable with providing their personal credit card details over the Internet when buying.
A lot of bad things can occur like identity theft. Nobody wants their identity stolen.
So, many business have actually attempted to create this type of payment or monetary system to minimize the dangers of shopping online.
Lots of nations have actually effectively 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 cash onto the card and then all the cash is transferred into a bank. They can then utilize the card for anything they need to utilize it for.
Some countries are working on or have systems that permit the user to move cash through mobile devices. I believe this is rather like what Chase lets their clients 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 provides you some idea of what is digital currency and how it is attempting to take it’s place on the planet of e-commerce. There may be a bit more to it than I could describe in just one little short article however I think you can get an excellent concept.