What Is Digital Currency-How Does It Work
What is digital currency? It is defined as: cash stored and moved in digital kind. Sounds basic enough, however how does it all work?
This kind of currency is thought to be good to utilize for making purchases on the internet due to the fact that if it works the method it was meant to, deals need to be rather anonymous and untraceable back to the payer or user.
This indicates that hackers would no longer have the ability to gather personal info from people who use their charge card to make online purchases. This would certainly reduce the variety of taken identities that happen every day.
To assist you comprehend more of, “what is digital currency?” I have done quite a bit of research on the subject and have discovered that there are a number of different types out there, each with it’s own special qualities.
Here are just a few 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 perhaps straight exchange it for solid gold bullion.
2. Central Currency Systems – these are like PayPal and these companies allow you to send out money all over the world as long as you have cash in the account. For some services offered by these kinds of companies, you get charged a cost on the receivers end of the transaction.
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 money to make your deal but your transaction is non-refundable once made. This type of system just works in one direction.
The E-cash idea has actually evolved along with the evolution of the Web. Individuals simply do not feel comfortable with offering their personal credit card info over the Internet when buying.
Too many bad things can take place like identity theft. Nobody desires their identity stolen.
So, lots of business have attempted to produce this type of payment or monetary system to decrease the threats of shopping online.
Lots of countries have effectively developed systems for “internal” usage such as Hong Kong’s Octopus card. This card works just like a sort of debit card where the user loads cash onto the card and then all the cash is transferred into a bank. They can then use the card for anything they need to use it for.
Some countries are working on or have systems that enable the user to move cash through mobile phones. I think this is somewhat 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 digitally.
I do hope that this gives 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 bit more to it than I could describe in simply one little post but I think you can get a great idea.