What Is Digital Currency-How Does It Work
What is digital currency? It is defined as: money stored and transferred in digital form. Sounds basic enough, but how does it all work?
This type of currency is believed to be great to utilize for making purchases on the internet because if it works the way it was implied to, transactions must be rather confidential and untraceable back to the payer or user.
This means that hackers would no longer be able 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 understand more of, “what is digital currency?” I have actually done quite a bit of research on the subject and have actually found that there are several different types out there, each with it’s own unique qualities.
Here are just a few with their descriptions following:
1. Digital Gold Currency – This type is backed by gold saved in vaults. The gold provides an extra step of security and if you hold this kind of currency, you might possibly directly exchange it for solid gold bullion.
2. Central Currency Systems – these are like PayPal and these business enable you to send out cash all over the world as long as you have cash in the account. For some services offered by these types of business, you get charged a charge on the receivers end of the deal.
3. Decentralized Currency Systems – Like Bitcoin are all based on cryptography and/or trust networks. Also called Hard Electronic Currency, it is intended to be more like using money to make your transaction but your transaction is non-refundable once made. This type of system just works in one instructions.
The E-cash concept has actually evolved along with the advancement of the Web. People simply do not feel comfy with providing their individual charge card information online when making a purchase.
Too many bad things can take place like identity theft. No one desires their identity stolen.
Numerous companies have actually tried to develop this type of payment or financial system to minimize the threats of shopping online.
Many nations have effectively produced systems for “internal” use such as Hong Kong’s Octopus card. This card works similar to a sort of debit card where the user loads cash onto the card and after that all the cash is deposited into a bank. They can then use the card for anything they require to use it for.
Some countries are working on or have systems that permit the user to move cash through mobile phones. I think this is rather like what Chase lets their consumers do. Their consumers can take an image of their check, front and back, with their phone and make their deposit electronically.
I do hope that this offers you some idea of what is digital currency and how it is attempting to take it’s location in the world of e-commerce. There might be a little bit more to it than I might explain in simply one little article however I believe you can get a good idea.