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What Is Digital Currency-How Does It Work

 

What is digital currency? It is specified as: cash saved and moved in digital form. Sounds easy enough, but how does it all work?

This type of currency is thought to be good to use for making purchases on the internet because if it works the way it was suggested to, deals should be rather anonymous and untraceable back to the payer or user.

This indicates that hackers would no longer be able to collect individual info from people who utilize their credit cards to make online purchases. This would clearly reduce the number of taken identities that occur every day.

To help you understand more of, “what is digital currency?” I have actually done quite a bit of research on the subject and have discovered that there are numerous different types out there, each with it’s own special qualities.

Here are just a couple of with their descriptions following:

1. Digital Gold Currency – This type is backed by gold kept in vaults. The gold provides an extra step of security and if you hold this type of currency, you could perhaps straight exchange it for solid gold bullion.

2. Centralized Currency Systems – these resemble PayPal and these companies permit you to send out cash all over the world as long as you have cash in the account. For some services provided by these types of business, you get charged a charge on the receivers end of the deal.

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 using money to make your transaction however your deal is non-refundable when made. This kind of system only operates in one direction.

The E-cash concept has evolved together with the advancement of the Web. Individuals simply do not feel comfy with offering their personal charge card information over the Internet when making a purchase.

Too many bad things can happen like identity theft. No one wants their identity taken.

So, many companies have actually attempted to produce this type of payment or monetary system to reduce the risks of shopping online.

Lots of nations have successfully developed systems for “in-house” usage 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 after that all the cash is deposited into a bank. They can then use the card for anything they require to utilize it for.

Some nations are working on or have systems that enable the user to transfer cash through mobile phones. I believe this is somewhat like what Chase lets their consumers do. Their clients can take a picture of their check, front and back, with their phone and make their deposit electronically.

I do hope that this gives you some idea of what is digital currency and how it is attempting to take it’s location on the planet of e-commerce. There may be a little bit more to it than I could explain in just one small post however I think you can get a great idea.

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