Understanding the Dimensions of Digital Currency Se...

Credit cards had taken the place of paper money and made transactions easy across medium. They can be used to buy things online. With the internet banking facility, quick money transfers [...]

2015-07-23

By Admin

Understanding the Dimensions of Digital Currency Security

Credit cards had taken the place of paper money and made transactions easy across medium. They can be used to buy things online. With the internet banking facility, quick money transfers are possible. Now, wait for a minute and understand the mechanism in it. Merchants require your card details in their system the moment. It means they have the data that is required to make a purchase. Now it is completely up to the integrity of the merchants to not to use this detail to but things for their use. The same is the case with internet banking. You need to provide your account number and all the other details.

In short the process behind these transactions does not address common sense. You provide the same data to the other party to deposit money in your account that can be used for taking out money from the same account. The main reason behind the flaw is the lack of technology and sophisticated computers. With time, credit cards will provide a token that will differentiate the details making the confidential details stay intact.

The process will take some years to come by but as of now there is a system that is safe and secured. It never uses the same data for a deposit and withdrawal. It ensures that your money stays in the safe place. The new system of Bitcoin enhances the safety. As a first step, understanding the process is of utmost importance:

When you open an account, a unique address is assigned to you.

      1. In its true form, it is a spreadsheet that indicates the currency each address or user has.

      2. The person, who intends to send you currency, requires knowing the address. This detail is not confidential. It can be used by the person to send you money but for the withdrawal, there are separate parameters.

      3. The spreadsheet or data is stored in different computers. The entire system is decentralized so there is no risk of hacking a single computer and the loss of all data in the process.

      4. All, you need, is a password to transfer money between accounts. In the event of international transfers, it reduces the cost and days taken in transfer.

The electronic system makes it possible to make the transfers fast. Once the money enters your account it, remains there and cannot be claimed back. The entire process takes thirty minutes on an average. You can walk away with ease after the transfer and need not bother about any odds that the entire sum is taken back by the person who transferred the money back.

At its core, it corrects the mistake of its previous counterparts. It demarks the data that are required to take out or transfer currency from your account and makes sure that it stays confidential. The person, on the other hand, has your address that is not enough for taking out the money. The entire digital currency security is based on this fact.

The process is in its inception, and there are bound to be some initial difficulties surrounding it. Some of them are:

       A. The first problem is networking that restricts the usage, For a transfer of money between you and your friend, both of you are required to have the bitcoin account. Money cannot be transferred between two separate accounts under a different umbrella as is the case with banks or credit cards. As the process is upcoming trends not many people have an account into this.

       B. Another major factor is that as the terms are not clear due to its being in the initial stages, the banks are a bit shy to recognize them due to the lack of a regulatory framework. Traditional institutes do not want to take the risk in case of any problem. This is a norm for all the new processes. Some of the companies that use this medium provide the employees the salary in the form of bit icon points as they cannot pursue the bank into getting a checking account for them.

       C. While the merchants will be happy to move away from credit cards to this new mode of transfer as they have to pay for cards, the consumers may find it hectic to shift their stand. The reason being the consumer has to pay in cash or card and possibly in any other medium. The advantage, which the cards have here is that users can get cash backs and other offers on purchase. This mode needs to add value at all ends to gain popularity.

These are the few limitations that come up when a new technology is in place. Overcoming them one step after another can provide you with the enhanced experience that comes with safety. However, the system has some flaws in its present stage that can be come up with simple precautions in place. These safety issues are not glaring and can be solved from the user end:

       1. In case you are not engaging any company for leaping your password safe then you can look for no backup in case the key or password is lost. In the event, the computer, which has the details of the account, crashes the money in it crashes entirely. However, while placing these confidential details with a company be sure that you trust them well. Check their background and the process that they will initiate to go with the key protection procedure.

        2. As the passwords and keys are stored in your computer, the entire information can lie loose in case the system is hacked or affected by malware. Keeping all the money in your online wallet can be a risky decision. Segregate your accounts and keep a chunk of money in your physical wallet. Even if your system gets hacked all your money is not lost, and you stay safe. The best will be to engage a good antivirus and keep changing your passwords. This safety procedure can help you with enhanced safety that goes beyond digital currency.

        3. Losing keys and passwords can be a problem that can render your currency out of your reach. The best option is to note it down in the physical notebook and do not risk it to save somewhere in the computer. This process is followed by the companies on a larger case. It helps you to get the passwords in the event the system crashes.

Considering all these aspects, they are a safer option than credit cards both for the consumer and the merchant end. It provides the merchants and small businesses the opportunity to introduce a cost efficient process of transaction. It provides a larger platform for safe and cost effective solutions than its previous counterparts. It provides easy accessibility and quick transactions and can be thought of as a replacement for credit cards provided the regulations and networking are in place.

Its main benefit lies in its basic layout but spreading a concept needs much more than it. Given its technology and safety, it should reach its peak soon. With time as the things fall in place it can provide a platform to small businesses to save in terms of paying for setting up a system for transaction. The only aspect remains to come up with more value at the customer end to compete with credit card offers like cash backs.

2015-07-23

By Admin



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