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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 type. Sounds simple enough, however how does it all work?
This type of currency is believed 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 ought to be rather anonymous and untraceable back to the payer or user.
This means that hackers would no longer be able to gather personal information from people who use their credit cards to make online purchases. This would obviously reduce the number of stolen identities that take place every day.
To assist you understand more of, “what is digital currency?” I have done a fair bit of research on the subject and have found that there are numerous 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 saved in vaults. The gold supplies an extra step of security and if you hold this type of currency, you might possibly straight exchange it for solid gold bullion.
2. Central Currency Systems – these resemble PayPal and these companies enable you to send 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 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 intended to be more like utilizing cash to make your deal however your deal is non-refundable as soon as made. This type of system just operates in one direction.
The E-cash idea has developed in addition to the advancement of the Web. People simply do not feel comfortable with giving their individual credit card details over the Internet when making a purchase.
A lot of bad things can happen like identity theft. No one wants their identity stolen.
Lots of business have tried to develop this type of payment or monetary system to lessen the dangers of shopping online.
Lots of countries have effectively produced systems for “in-house” 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 money is deposited into a bank. They can then use the card for anything they require to utilize it for.
Some nations are working on or have systems that permit the user to transfer money through mobile phones. I think this is somewhat like what Chase lets their clients do. Their clients can take a picture of their check, front and back, with their phone and make their deposit digitally.
I do hope that this provides you some idea of what is digital currency and how it is trying to take it’s place on the planet of e-commerce. There may be a bit more to it than I might describe in just one little post however I believe you can get a good idea.