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What Is Digital Currency-How Does It Work
What is digital currency? It is specified as: money saved and moved in digital form. Sounds easy enough, but how does it all work?
This type of currency is believed to be excellent to use for making purchases on the internet because if it works the method it was suggested to, transactions should be rather anonymous and untraceable back to the payer or user.
This indicates that hackers would no longer be able to collect personal info from individuals who use their credit cards to make online purchases. This would certainly decrease the variety of stolen identities that occur every day.
To help you understand more of, “what is digital currency?” I have done quite a bit of research on the subject and have actually discovered that there are numerous different types out there, each with it’s own distinct qualities.
Here are simply a few with their descriptions following:
1. Digital Gold Currency – This type is backed by gold stored in vaults. The gold offers an extra measure of security and if you hold this type of currency, you could potentially straight 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 fee on the receivers end of the transaction.
3. Decentralized Currency Systems – Like Bitcoin are all based upon cryptography and/or trust networks. Called Hard Electronic Currency, it is planned to be more like utilizing cash to make your deal but your deal is non-refundable when made. This kind of system only operates in one direction.
The E-cash concept has actually developed along with the evolution of the Internet. Individuals simply do not feel comfy with offering their personal charge card info online when buying.
Too many bad things can occur like identity theft. No one wants their identity stolen.
So, lots of business have tried to develop this kind of payment or monetary system to reduce the threats of shopping online.
Numerous countries have actually successfully produced 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 after that all the money is transferred into a bank. They can then utilize the card for anything they need to use it for.
Some countries are dealing with or have systems that allow the user to move cash through mobile phones. I think this is rather 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 digitally.
I do hope that this offers you some concept of what is digital currency and how it is attempting to take it’s place in the world of e-commerce. There may be a bit more to it than I could describe in just one little article but I think you can get a good concept.