Difference between cryptocurrency and digital currency?
What is the digital currency?
The best example for digital currency is PayPal.It is the money that is used by the Internet, available only in digital form,(For example banknotes and coins). It is also known as digital money or electronic money or electronic currency.
- They have all the qualities of conventional money. Like standard currency, they can be received, translated or exchanged for another currency.
- The digital currency is centralized, there is a certain group of people or a network of computers that monitor network transactions.
- To use the digital currency you need to identify the user by using documents issued by the government.
- In digital currency you can not choose a wallet address and see all money orders, this information is confidential.
- The digital currency system provides for the existence of a central authority that deals with problems.The user can cancel or freeze the transaction at the request of the participant or authorities, as well as on suspicion of fraud or money laundering.
What is a cryptocurrency?
The best example for Cryptocurrency is Bitcoin, Ethereum etc.Cryptocurrency is an asset that is used as a means of exchange and is considered reliable because it is based on cryptography.The main characteristic of CryptoCurrencies is decentralizing, unlike other digital currency.
- The cryptocurrency is based on the Blockchain technology which basically stores the information in journals that contain the information of owner and information in each block. All the transactions are confirming and verify by individual’s computers.
- Cryptocurrency, in turn, is decentralized, and the rules are established by the majority of members of the crypto community.
- To buy, invest in the cryptocurrency, nothing is required. However, cryptocurrencies do not provide complete anonymity. Despite the fact that addresses do not contain any confidential information – names, registration, etc., every transaction is registered, and senders and recipients are well known. Thus, any transaction can be tracked.
- Cryptocurrency, on the contrary, is transparent, you can see the list of transactions of any user since all revenue streams are placed in a public chain.
- Cryptocurrency is regulated by the community. It is highly unlikely that users will approve changes in the blockсhain.