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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 form. Sounds simple enough, however how does it all work?
This type of currency is thought to be great to use for making purchases on the internet since if it works the method it was suggested to, deals need to be rather anonymous and untraceable back to the payer or user.
This means that hackers would no longer have the ability to gather personal details from people who use their credit cards to make online purchases. This would obviously decrease the number of stolen identities that take place every day.
To assist you understand more of, “what is digital currency?” I have actually done a fair bit of research on the subject and have discovered that there are a number of 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 supplies an extra step of security and if you hold this type of currency, you might perhaps directly exchange it for solid gold bullion.
2. Centralized Currency Systems – these resemble PayPal and these companies allow you to send out cash all over the world as long as you have money in the account. For some services provided 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. Called Hard Electronic Currency, it is planned to be more like using money to make your transaction however your deal is non-refundable when made. This type of system only operates in one instructions.
The E-cash idea has progressed along with the development of the Internet. People simply do not feel comfortable with offering their individual charge card details online when purchasing.
Too many bad things can happen like identity theft. Nobody wants their identity taken.
So, lots of companies have actually attempted to produce this kind of payment or monetary system to lessen the dangers of shopping online.
Numerous countries have actually successfully developed systems for “in-house” use 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 money is deposited into a bank. They can then use the card for anything they need to utilize it for.
Some countries are dealing with or have systems that allow the user to transfer cash through mobile phones. I think this is somewhat like what Chase lets their customers do. Their clients can take a photo of their check, front and back, with their phone and make their deposit electronically.
I do hope that this offers you some concept of what is digital currency and how it is trying to take it’s place on the planet of e-commerce. There might be a little bit more to it than I might explain in just one little article but I think you can get a great idea.