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What Is Digital Currency-How Does It Work
What is digital currency? It is defined as: cash saved and moved in digital form. Sounds basic enough, however how does it all work?
This type of currency is believed to be good to use for making purchases on the internet since 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 individual information from people who utilize their credit cards to make online purchases. This would certainly reduce the number of stolen identities that take place every day.
To assist you comprehend more of, “what is digital currency?” I have done a fair bit of research on the subject and have found that there are numerous various types out there, each with it’s own unique 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 supplies an additional step of security and if you hold this type of currency, you could possibly directly exchange it for solid gold bullion.
2. Centralized Currency Systems – these are like PayPal and these companies enable you to send cash all over the world as long as you have money in the account. For some services provided by these types of business, you get charged a charge 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 cash to make your transaction but your transaction is non-refundable once made. This kind of system only works in one direction.
The E-cash concept has actually developed together with the evolution of the Web. People just do not feel comfy with giving their personal credit card info over the Internet when buying.
A lot of bad things can take place like identity theft. Nobody wants their identity stolen.
Numerous companies have actually tried to develop this type of payment or financial system to decrease the risks of shopping online.
Many countries have actually successfully developed 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 money onto the card and after that all the cash is transferred into a bank. They can then use the card for anything they need to utilize it for.
Some nations are dealing with or have systems that enable the user to move money through mobile phones. I think this is somewhat 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 gives you some concept of what is digital currency and how it is trying to take it’s location worldwide of e-commerce. There may be a little more to it than I could explain in simply one little article however I believe you can get a great concept.