What is Digital Currency?
During the past decade there have been continuous developments in financial technology as consumers shift towards online and mobile financial services. Global interest in crypto-currencies increased rapidly. In this article, we will discuss some knowledge about Digital Currency.
What is Digital Currency?
Digital currency(DIGICCY) is an alternative currency in the form of electronic currency. Digital gold coin and password currency belong to digital currency.It is not as tangible as dollar bills or coins. It uses computers to calculate and transfer. The most successful and widely used form of digital currency is encrypted currency Bitcoin. Digital money is exchanged using technologies such as Smartphones, Credit Cards, and Online cryptocurrency exchanges. In some cases, it can be converted to cash in kind, such as withdrawing money from ATM.
The advantage of Digital Currency
The biggest innovation in digital currency compared to the previous currency is the underlying support of the new technology of Blockchain.
The five characteristics of the Blockchain (public chain): decentralization, openness, autonomy, anonymity and information cannot be modified. From the data point of view, the Blockchain can realize distributed recording and storage of data. From the effect point of view, the Blockchain can generate a set of non-tamperable and trustworthy databases recorded in chronological order, and this set of databases is not Stored on a central server. Therefore, Blockchain technology is a set of database operation techniques that are maintained by decentralization, trust, and encryption algorithms.
From the perspective of the evolution and development of money, digital money must be the development trend in the future, and Blockchain is the only most reliable technology which can be verified in many basic technology agreements and fully meet the needs of currency issuance, circulation, supervision and other links.
The difference between Digital, Virtual, and Cryptocurrencies
Virtual currencies were developed because of trust issues with financial institutions and digital transactions. Though they aren't even considered to be "money" by everyone, virtual currencies are independent of traditional banks and could eventually pose competition for them.
First, there are three terms that are sometimes used interchangeably that we need to sort out: Digital Currency, Virtual Currency, and Cryptocurrency.
Virtual currency was defined in 2012 by the European Central Bank as "a type of unregulated, digital money, which is issued and usually controlled by its developers, and used and accepted among the members of a specific virtual community." Last year, the US Department of Treasury said that digital currency operates like traditional currency, but does not have all the same attributes — as in, it doesn't have legal tender.
Digital currency, however, is a form of virtual currency that is electronically created and stored. Some types of digital currencies are Cryptocurrencies, but not all of them are.
So that leads us to the more specific definition of a Cryptocurrency, which is a subset of digital currencies that uses cryptography for security so that it is extremely difficult to counterfeit. A defining feature of these is the fact they are not issued by any central authority.
If you want to learn more about Digital Currency, Bybit will explain the process step-by-step and remain available to answer any questions.