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What Is Digital Currency-How Does It Work
What is digital currency? It is defined as: money kept and transferred in digital form. Sounds basic enough, however how does it all work?
This type of currency is believed to be great to use for making purchases on the internet since if it works the way it was suggested to, transactions should be rather confidential and untraceable back to the payer or user.
This means that hackers would no longer be able to collect personal details from individuals who utilize their charge card to make online purchases. This would certainly decrease the number of stolen identities that occur every day.
To help you understand more of, “what is digital currency?” I have done a fair bit of research study on the subject and have found that there are a number of various types out there, each with it’s own distinct qualities.
Here are just a couple of with their descriptions following:
1. Digital Gold Currency – This type is backed by gold stored in vaults. The gold offers an additional step of security and if you hold this kind of currency, you could potentially directly exchange it for solid gold bullion.
2. Centralized Currency Systems – these resemble PayPal and these business permit you to send out 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. Likewise called Hard Electronic Currency, it is planned to be more like using cash to make your transaction but your deal is non-refundable once made. This type of system just works in one instructions.
The E-cash idea has actually developed together with the development of the Internet. People just do not feel comfortable with providing their individual credit card info over the Internet when making a purchase.
Too many bad things can take place like identity theft. No one desires their identity stolen.
Many companies have tried to create this type of payment or financial system to lessen the threats of shopping online.
Lots of countries have actually effectively produced systems for “in-house” use 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 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 move money through mobile devices. I believe this is somewhat like what Chase lets their consumers do. Their consumers can take a photo of their check, front and back, with their phone and make their deposit digitally.
I do hope that this provides you some concept of what is digital currency and how it is trying to take it’s place worldwide of e-commerce. There may be a little bit more to it than I could explain in simply one little article however I believe you can get an excellent idea.