Digital Currency Definition
According to the European Central Bank's “Virtual Currency Survey conducted in 2016 – reported that the virtual currency is a digital representation of value, not merely issued by a central bank, credit institution or e-money institution, which, in some circumstances, can be used as an alternative to money. In a nutshell, digital currencies are another name for money used to pay for specific goods or services on the Internet.
As you can probably imagine, digital money is entirely digital nowadays, it doesn’t have a physical equivalent in the real world of existence. But, it acts in the same way as physical, traditional or fiat – money. You can receive, transfer and/or exchange digital currency for another currency. It can be used to pay for goods and services, in an online store, for example, and it has no geographical or politically borders limitation.
Some financial experts and tech gurus argue that the lines are now becoming blurred as we move toward a cashless society, stating that physical money that is used online, for banking and retail, etc. should be classed as a digital currency.
Cryptocurrencies are specific variants of digital currencies, cryptocurrency is under the category of digital assets. The cryptocurrencies' algorithm that powered the crypto world which used by the same GIFA token, Bitcoin and other cryptocurrencies, and is traded on the online communities (crypto exchanges) and backed by blockchain technologies. These digital assets are mostly used in peer-to-peer payments but are now increasingly used to pay for real-world goods and services. Have l informed you that with GIFA Token in your wallet you can able to buy luxurious cars at King Auto company and pay for services from other merchants.
Cryptocurrency is considered secure, reliable, and trustworthy as it is based on cryptography. The art of writing or solving codes, cryptography is a mix of different sciences, with mathematics at its base level. To be precise, cryptocurrencies use Blockchain and a decentralized ledger, which means that no single individual or supervisory authority controls the actions in the network. It is pure decentralization, at its most glorious!
The Main Differences
Though cryptocurrencies are a variant of digital currencies, there are some key differences between the two.
- Digital currencies are centralized, meaning that transaction within the network is regulated in a centralized location, like a bank. Cryptocurrencies are decentralized, and the regulations inside the network and governed by the majority of the community.
- Digital currencies are not transparent. With digital currencies, you cannot choose the address of the wallet and see all money transfers since the beginning of time. This information is kept strictly confidential and private. Cryptocurrencies are transparent. Anyone and everyone is able to see any and all transactions made and received by any user, as all revenue streams are placed in a public chain – the blockchain.
- Digital currencies have a central authority that can deal with any problems or issues. This central body can, for example, freeze or cancel transactions on the request of the participant or the authorities. Cryptocurrencies are regulated by their respective communities.
- Most countries have some legal framework surrounding digital currencies, for example, the EU’s Directive 2009/110/EC; and the US’ Article 4A of the Uniform Commercial Code.
Right now, the same cannot be said about cryptocurrencies. In most countries, the official status of cryptocurrency is not defined.
However, this situation is in constant flux and is being pushed by crypto exchanges such as Coinbase, Binance, , and GIFA Token. Our mantra is “Moving crypto forward, we want everyone to be a global citizen” and we’re working hand-in-hand with other fintech sectors in the industry include independent businesses and governments to help them understand the nature of crypto and blockchain technology in a bid to create an extensive and lasting financial solution that will bring widespread transparency beneficial and economic freedom to everyone on the blue planet.
So, there you have it. Digital currency is an umbrella term, comprising cryptocurrencies but the lines are definitely being blurred. Hopefully, we cleared up any confusion you might have had before you started reading!
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