What Is Digital Currency-How Does It Work
What is digital currency? It is specified as: money kept and transferred in digital type. Sounds basic enough, however how does it all work?
This type of currency is thought to be excellent to use for making purchases on the internet because if it works the method it was meant to, transactions must be rather anonymous and untraceable back to the payer or user.
This means that hackers would no longer have the ability to gather personal information from people who use their credit cards to make online purchases. This would obviously decrease the number of stolen identities that take place 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 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 provides an extra procedure of security and if you hold this kind of currency, you could possibly directly exchange it for solid gold bullion.
2. Centralized Currency Systems – these are like PayPal and these companies allow you to send cash all over the world as long as you have cash 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 on cryptography and/or trust networks. 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 kind of system only works in one instructions.
The E-cash idea has actually evolved in addition to the development of the Internet. Individuals simply do not feel comfortable with offering their individual credit card info over the Internet when making a purchase.
Too many bad things can take place like identity theft. Nobody desires their identity taken.
Numerous companies have attempted to develop this type of payment or financial system to decrease the threats of shopping online.
Lots of countries have successfully produced systems for “internal” usage 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 deposited into a bank. They can then use the card for anything they require to utilize it for.
Some countries are working on or have systems that allow the user to transfer cash through mobile phones. I think this is somewhat like what Chase lets their customers do. Their clients can take an image 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 attempting to take it’s location on the planet of e-commerce. There may be a little bit more to it than I might explain in just one small short article but I think you can get a great idea.