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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, but how does it all work?
This kind of currency is believed to be good to use for making purchases on the internet since 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 have the ability to gather personal info from individuals who use their credit cards to make online purchases. This would obviously reduce the variety of stolen identities that occur every day.
To assist you understand more of, “what is digital currency?” I have done quite a bit of research on the subject and have found that there are several various types out there, each with it’s own distinct 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 supplies an additional measure of security and if you hold this type of currency, you could perhaps straight exchange it for solid gold bullion.
2. Centralized Currency Systems – these are like PayPal and these companies allow 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 companies, you get charged a charge on the receivers end of the transaction.
3. Decentralized Currency Systems – Like Bitcoin are all based upon cryptography and/or trust networks. Called Hard Electronic Currency, it is meant to be more like utilizing money to make your transaction but your transaction is non-refundable when made. This kind of system only operates in one direction.
The E-cash concept has actually evolved in addition to the advancement of the Internet. Individuals just do not feel comfortable with providing their personal charge card info online when buying.
Too many bad things can happen like identity theft. Nobody desires their identity taken.
So, many companies have actually tried to produce this type of payment or monetary system to minimize the threats of shopping online.
Many countries have actually effectively created systems for “in-house” 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 use 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 clients do. Their customers can take a picture of their check, front and back, with their phone and make their deposit digitally.
I do hope that this offers you some concept of what is digital currency and how it is trying to take it’s location on the planet of e-commerce. There may be a little more to it than I could describe in simply one little post but I think you can get a great concept.