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What Is Digital Currency-How Does It Work
What is digital currency? It is defined as: cash stored and moved in digital form. Sounds basic enough, but how does it all work?
This kind of currency is believed to be excellent to use for making purchases on the internet due to the fact that if it works the way it was indicated to, transactions should be rather anonymous and untraceable back to the payer or user.
This means that hackers would no longer be able to collect individual information from individuals who utilize their charge card to make online purchases. This would obviously reduce the number of taken identities that take place every day.
To help you comprehend more of, “what is digital currency?” I have actually done a fair bit of research study on the subject and have actually found that there are a number of 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 offers an additional measure 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 resemble PayPal and these companies enable you to send out money all over the world as long as you have money in the account. For some services supplied by these types 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. Also called Hard Electronic Currency, it is intended to be more like utilizing cash to make your deal but your transaction is non-refundable when made. This kind of system only works in one direction.
The E-cash concept has evolved in addition to the evolution of the Internet. Individuals just do not feel comfy with giving their individual charge card details over the Internet when buying.
Too many bad things can happen like identity theft. No one wants their identity stolen.
So, many business have attempted to produce this kind of payment or monetary system to minimize the dangers of shopping online.
Many countries have actually successfully developed systems for “internal” use such as Hong Kong’s Octopus card. This card works much like a sort of debit card where the user loads cash onto the card and then all the cash 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 permit the user to move cash through mobile phones. I think this is rather like what Chase lets their customers do. Their consumers can take an image of their check, front and back, with their phone and make their deposit digitally.
I do hope that this offers you some idea of what is digital currency and how it is trying to take it’s place in the world of e-commerce. There might be a little bit more to it than I might describe in simply one small post but I think you can get a great idea.