- What is digital money?
Digital money or currency is a form of money that only exists in electronic form. Digital money lacks a tangible form like a bill, check, or coin. It is booked and transmitted by electronic codes on computers. As technology becomes more promising, people are moving into the digitized world, including digital payments.
- Detailed explanation of digital money:
New forms of technology now enable safer and smoother use of digital money. Digital money can be transferred and exchanged using technologies such as credit cards, smartphones and online cryptocurrency exchanges. Cryptocurrency refers to a type of digital money protected by cryptography, making it almost impossible to counterfeit or spend time. It exists through decentralized networks based on blockchain technology, which is essentially a ledger stored across a network of computers. The important feature of cryptocurrencies is that a central bank or government does not issue them, which frees them from the hurdle of government interference or manipulation. Digital money is traced back to the invention of the internet. In the first days, there were difficulties in getting the population to use digital money; however, as people become more comfortable with the technology and the technology itself becomes more secure, more people are now willing to use digital money.
- What are examples of digital money?
The most common form of digital money is money held by banks and central government deposits. Institutions hold a certain level of capital to weather economic stress; however, the money is not kept in a safe in any physical location. Instead, it is hosted electronically in the form of digital money. Banks and central governments process transactions involving millions or billions of foreign currencies but do not use physical cash. Another prominent form of digital money is cryptocurrency. As explained above, it is a form of digital money that exists over a blockchain network. Some forms of cryptocurrency include
Ø Bitcoin
Ø Ethereum
Ø Ripple
Ø Litecoin
- What are the risks of digital money?
Payment fraud is a major risk stemming from the increasing use of digital money. Payment fraud can be committed in many ways. Generally, however, it includes fraudulent or unauthorized transactions made by a cyber-criminal. Some common forms of payment fraud are
Ø Fraudulent payments
Ø Illegal payments
Ø Insider manipulation
Ø Data theft
Ø Seizure and criminal offenses
Since money is not physically transferred, it is impossible to know who is on the other side of a transaction. It offers cyber criminals opportunities to gain access to sensitive information or scam people with digital money.
We @CloudPloys provide cyber security for you to stay secured from the hackers and invasions. Get in contact with CloudPloys today to keep your digitalized payment safe. Stay tuned for more.
