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What Is Digital Currency-How Does It Work
What is digital currency? It is specified as: money kept and transferred in digital type. Sounds basic enough, but how does it all work?
This kind of currency is believed to be good to use for making purchases on the internet because if it works the way it was meant to, transactions should be rather anonymous and untraceable back to the payer or user.
This suggests that hackers would no longer have the ability to gather individual information from individuals who utilize their charge card to make online purchases. This would obviously decrease the number of stolen identities that happen every day.
To help you comprehend more of, “what is digital currency?” I have done a fair bit of research on the subject and have actually found that there are numerous various types out there, each with it’s own unique qualities.
Here are simply a couple of with their descriptions following:
1. Digital Gold Currency – This type is backed by gold stored in vaults. The gold provides an extra step 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 are like PayPal and these business permit 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 cost on the receivers end of the transaction.
3. Decentralized Currency Systems – Like Bitcoin are all based on cryptography and/or trust networks. Also called Hard Electronic Currency, it is meant to be more like using money to make your transaction however your deal is non-refundable as soon as made. This type of system just operates in one direction.
The E-cash concept has actually evolved along with the development of the Internet. People just do not feel comfortable with providing their personal charge card info over the Internet when purchasing.
Too many bad things can happen like identity theft. No one desires their identity stolen.
So, many companies have tried to produce this type of payment or monetary system to reduce the dangers of shopping online.
Numerous nations have effectively developed systems for “internal” 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 then all the money is transferred into a bank. They can then use the card for anything they require to use it for.
Some nations are dealing with or have systems that enable the user to transfer cash through mobile phones. I believe this is rather like what Chase lets their clients do. Their consumers 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 concept of what is digital currency and how it is trying to take it’s location on the planet of e-commerce. There might be a little bit more to it than I could describe in simply one little article however I think you can get a good concept.