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What Is Digital Currency-How Does It Work
What is digital currency? It is defined as: cash saved and transferred in digital type. Sounds basic enough, however how does it all work?
This kind of currency is thought to be excellent to use for making purchases on the internet due to the fact that if it works the method it was meant to, transactions should be rather anonymous and untraceable back to the payer or user.
This implies that hackers would no longer be able to gather personal details from people who use their credit cards to make online purchases. This would obviously reduce the variety of stolen identities that take place every day.
To assist you understand more of, “what is digital currency?” I have done quite a bit of research on the subject and have found that there are several 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 provides an additional measure of security and if you hold this kind of currency, you could perhaps straight exchange it for solid gold bullion.
2. Central Currency Systems – these are like PayPal and these companies allow you to send out money all over the world as long as you have money in the account. For some services provided by these types of companies, you get charged a fee on the receivers end of the transaction.
3. Decentralized Currency Systems – Like Bitcoin are all based upon cryptography and/or trust networks. Likewise called Hard Electronic Currency, it is intended to be more like using money to make your deal however your deal is non-refundable once made. This kind of system just works in one direction.
The E-cash concept has actually progressed in addition to the advancement of the Web. People just do not feel comfortable with giving their personal credit card details online when buying.
A lot of bad things can take place like identity theft. Nobody wants their identity taken.
So, many business have tried to create this type of payment or monetary system to minimize the dangers of shopping online.
Many nations have actually successfully produced systems for “internal” usage such as Hong Kong’s Octopus card. This card works similar to a sort of debit card where the user loads cash onto the card and then all the money is transferred into a bank. They can then use the card for anything they require to use it for.
Some countries are working on or have systems that enable the user to move cash through mobile devices. I think 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 digitally.
I do hope that this gives you some concept of what is digital currency and how it is attempting to take it’s location in the world of e-commerce. There may be a bit more to it than I might explain in just one small short article but I think you can get a great idea.