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What Is Digital Currency-How Does It Work
What is digital currency? It is defined as: money saved and transferred in digital form. Sounds simple enough, however how does it all work?
This type of currency is believed to be great to use for making purchases on the internet due to the fact that if it works the way it was suggested to, transactions should be rather anonymous and untraceable back to the payer or user.
This implies that hackers would no longer be able to gather personal information from individuals who use their credit cards to make online purchases. This would clearly decrease the variety of stolen identities that take place every day.
To help you understand more of, “what is digital currency?” I have done a fair bit of research on the subject and have actually found that there are several various types out there, each with it’s own distinct qualities.
Here are simply a couple of with their descriptions following:
1. Digital Gold Currency – This type is backed by gold stored in vaults. The gold offers an extra procedure of security and if you hold this type of currency, you might potentially directly exchange it for solid gold bullion.
2. Centralized Currency Systems – these are like PayPal and these business allow you to send money all over the world as long as you have money in the account. For some services provided by these types of companies, you get charged a fee on the receivers end of the deal.
3. Decentralized Currency Systems – Like Bitcoin are all based on cryptography and/or trust networks. Called Hard Electronic Currency, it is planned to be more like using money to make your transaction but your transaction is non-refundable when made. This type of system only works in one instructions.
The E-cash concept has actually evolved along with the evolution of the Internet. People simply do not feel comfy with offering their individual charge card information over the Internet when buying.
A lot of bad things can occur like identity theft. No one desires their identity stolen.
Many companies have tried to create this type of payment or financial system to reduce the threats of shopping online.
Many countries have successfully developed systems for “internal” use 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 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 enable the user to move money through mobile devices. I believe this is rather like what Chase lets their customers do. Their consumers can take a photo of their check, front and back, with their phone and make their deposit digitally.
I do hope that this offers you some idea of what is digital currency and how it is trying to take it’s place in the world of e-commerce. There might be a bit more to it than I could explain in just one little post however I believe you can get a great concept.