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What Is Digital Currency-How Does It Work
What is digital currency? It is defined as: money kept and moved in digital type. Sounds simple enough, but how does it all work?
This type of currency is thought to be good to use for making purchases on the internet due to the fact that if it works the way it was suggested to, deals must be rather anonymous and untraceable back to the payer or user.
This suggests that hackers would no longer be able to gather personal info from individuals who use their charge card to make online purchases. This would clearly decrease the variety of stolen identities that take place every day.
To assist you comprehend more of, “what is digital currency?” I have actually done a fair bit of research on the subject and have actually found that there are a number of different 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 stored in vaults. The gold supplies an additional measure of security and if you hold this type of currency, you could potentially straight exchange it for solid gold bullion.
2. Central Currency Systems – these are like PayPal and these business permit you to send money all over the world as long as you have money in the account. For some services supplied by these kinds of companies, you get charged a cost 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 meant to be more like utilizing cash to make your transaction however your transaction is non-refundable once made. This type of system only works in one instructions.
The E-cash concept has developed along with the development of the Internet. People just do not feel comfortable with giving their personal credit card info over the Internet when purchasing.
A lot of bad things can take place like identity theft. Nobody desires their identity taken.
So, numerous companies have actually attempted to create this type of payment or monetary system to reduce the risks of shopping online.
Numerous countries have actually effectively created 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 cash is transferred into a bank. They can then use the card for anything they require to utilize it for.
Some nations are dealing with or have systems that enable the user to transfer money through mobile phones. I think 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 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 describe in just one little post but I think you can get a good concept.