Topic: Digital & Cryptocurrency are they same ? (Read 267 times)
Any currency maintained digitally is referred to as digital currency. But this is not the term's preferred usage, it can occasionally be used to refer to money that only exists online and has no physical existence. On the other hand, only digital money that is based on the blockchain, a form of technology where peer-peer interaction happens, storage format is referred to as cryptocurrency.
Digital and Cryptocurrency aren't the same.
Based on this link 3 https://www.investopedia.com/terms/d/digital-currency.asp, there are 3 types of digital currency and crypto is one of them.
Based on this link 3 https://www.investopedia.com/terms/d/digital-currency.asp, there are 3 types of digital currency and crypto is one of them.
- Cryptocurrency - these are not owned by any entity and its transactions are recorded on a digital ledger or what we know as blockchain.
- Virtual Currency - these are currencies controlled by a private company. An example of this is a currency we used in games like v-bucks in fortnite or valorant points(vp) in valorant that can be used in purchasing skins, battle pass, etc.
- CBDC or Central Bank Digital Currencies - these are regulated and issued by the central bank of a particular country, it's just the digital form of fiat that we usually use. China has their own CBDC which is called e-CNY, also known as digital yuan.
The infographic below briefly describes the main differences between digital currency and cryptocurrency, comparing them with each other against certain criteria.
This just explain entirely what the difference between both is, because I could remember a friend who just got into cryptocurrency asking me the same question you did, and I told him Digital currency is the digital phase of the fiat currency you and I know, used for online transaction, while Cryptocurrency is a decentralized coin used for store of value which is volatile in nature.
I would say that credit cards, online banks, and methods like PayPal represent digitalized fiat currency. It's not purely digital, because it exists in paper form, and you can go to an ATM or a bank office and withdraw that cash, but in many countries a majority of fiat transactions already happens in a digital way, and this tendency is growing.
There is no big deal in trying to make a pronounced difference between cryptocurrency and digital currency. You are free to use it interchangeably. You should only stress yourself if you are coming from a technical angle.
When you say digit, cryptocurrency uses digit and so it can be called a digital currency.
CBDCs are digital currencies too. So currency that enables you make payments or purchase something without presenting a physical cash is a digital currency.
So, both what you have in mind as digital currency and cryptocurrency are all digital currencies.
So, technically the difference should be that while cryptocurrency is a digital currency, but it is a type of digital currency that uses cryptography to confirm, save and implement transactions.
When you say digit, cryptocurrency uses digit and so it can be called a digital currency.
CBDCs are digital currencies too. So currency that enables you make payments or purchase something without presenting a physical cash is a digital currency.
So, both what you have in mind as digital currency and cryptocurrency are all digital currencies.
So, technically the difference should be that while cryptocurrency is a digital currency, but it is a type of digital currency that uses cryptography to confirm, save and implement transactions.
They is a slight difference between cryptocurrency and digital currency. Digital currency comprises of any any internet kind of currency which you can trade for exchange of goods and services, and one example of digital currency is gold currency, so this Gold currency were valuable in ancient days but not really currently. while cryptocurrency is currency of assets and it's tradable and investable in any form,and it's applicable with gold but cryptocurrency have more influential than Gold now.
Not all Digital Currencies are Cryptocurrencies but all Cryptocurrencies are Digital Currencies. So yes, in some way they are similar.
We can differentiate between Cryptocurrencies by placing them under specific categories. I for one prefer to split them up firstly into two kinds. DEcentralized and Centralized. Besides the Decentralized Cryptocurrencies, I do not think there is any Digital Currency that works in a decentralized manner so there is that. Digital Currencies are pretty much currencies that work virtually for various use cases. There is the digital Dollar you get on your bank account. There are digital coins you get in various games, if that even counts. They are not Cryptocurrencies and they work through centralized servers, serve a specific use case and, maybe most importantly, decisions are not taken by the community's power.
On the other hand there is Bitcoin and XRP. Bitcoin is a Decentralized Digital Cryptocurrency and XRP is a Centralized Digital Cryptocurrency as far as I can tell.
Anyway. As said in the paragraphs above. You can refer to Bitcoin as a Digital Currency but you can not refer to the digital USD as a Cryptocurrency. Although digital, they are two different beasts.
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Regards,
PrivacyG
We can differentiate between Cryptocurrencies by placing them under specific categories. I for one prefer to split them up firstly into two kinds. DEcentralized and Centralized. Besides the Decentralized Cryptocurrencies, I do not think there is any Digital Currency that works in a decentralized manner so there is that. Digital Currencies are pretty much currencies that work virtually for various use cases. There is the digital Dollar you get on your bank account. There are digital coins you get in various games, if that even counts. They are not Cryptocurrencies and they work through centralized servers, serve a specific use case and, maybe most importantly, decisions are not taken by the community's power.
On the other hand there is Bitcoin and XRP. Bitcoin is a Decentralized Digital Cryptocurrency and XRP is a Centralized Digital Cryptocurrency as far as I can tell.
Anyway. As said in the paragraphs above. You can refer to Bitcoin as a Digital Currency but you can not refer to the digital USD as a Cryptocurrency. Although digital, they are two different beasts.
-
Regards,
PrivacyG
Digital currency is like fiat money but it is usually used online, and is controlled by the government of that country, crypto currency is not controlled by the government of any country.
I think those definitions are totally wrong.
Seems like he has wrong source of getting this knowledge and is using these terms interchangibly which is wrong perception.People need to realise that digital coins or so called CDBC using blockchain technology can't be termed as crypto as the term is derived from cryptography and encryption which was used in bitcoin.Second, there are cryptocurrencies that do no use blockchain technology. For example, XRP and IOTA.
XRP uses its own public ledger named after it's currency only and is totally centralised coin having no firm future in the market.Same is the case with IOTA who don't use blockchain technology for transactions.but the only recommended one is cryptocurrency which is decentralized while others cbdc is centralized
Not all crypto currencies are decentralised as many are having centralised control while only bitcoin holds the true decentralisation concept with it and yes all those CDBC are government issued and you know they will never let the control flow away from them.For investment, I can recommend bitcoin, altcoins are riskier and are seen more like gambling. For spending, I will recommend fiat, this can differ from region to region, but in the country I am located in, spending cryptocurrencies is more like a stress and like not possible because people prefer to use it just as investment.
I would say you could spend and invest both at the time if you wish to do fulfilling the base objective of bitcoin as alternative to payment modes but yes there is still need to be mass adoption to spend it freely so it's hard at the time to buy stuff with it so best is to invest and safely hold your coins.
but the only recommended one is cryptocurrency which is decentralized while others cbdc is centralized
Let me focus more directly on fiat (although, the digital form of fiat, but which is nothing different in this regard to paper fiat) and cryptocurrencies, they are both recommendable and useful.For investment, I can recommend bitcoin, altcoins are riskier and are seen more like gambling. For spending, I will recommend fiat, this can differ from region to region, but in the country I am located in, spending cryptocurrencies is more like a stress and like not possible because people prefer to use it just as investment.
The infographic below briefly describes the main differences between digital currency and cryptocurrency, comparing them with each other against certain criteria.
I would also add that digital currency is always a form of fiat money that is controlled by governments. It requires a centralized clearing house to function because it is not possible to prevent double-spend in digital currency without authorities who see and control all transactions. Cryptocurrency is not necessarily a store of value because, for that, it should have a robust monetary policy and decentralization, which most cryptocurrencies don't have. It is also worth pointing out that bitcoin doesn't use encryption.
The value of digital currencies is very far from being considered stable because an uncontrolled printing and questionable regulation on the part of central banks makes these currencies subject to gradual debasement. The value of cryptocurrencies is dictated mostly by a free market, namely the laws of supply and demand, which naturally results in unexpected price fluctuations.
I would also add that digital currency is always a form of fiat money that is controlled by governments. It requires a centralized clearing house to function because it is not possible to prevent double-spend in digital currency without authorities who see and control all transactions. Cryptocurrency is not necessarily a store of value because, for that, it should have a robust monetary policy and decentralization, which most cryptocurrencies don't have. It is also worth pointing out that bitcoin doesn't use encryption.
The value of digital currencies is very far from being considered stable because an uncontrolled printing and questionable regulation on the part of central banks makes these currencies subject to gradual debasement. The value of cryptocurrencies is dictated mostly by a free market, namely the laws of supply and demand, which naturally results in unexpected price fluctuations.
Those are terrible definitions if you ask me.
Basically digital currency is any currency that doesn't have a physical form, so it includes your online banking system, your debit/credit card, your PayPal, bitcoin, shitcoins and even tokens.
But a cryptocurrency is supposed to be a currency that relies mainly on cryptography and blockchain technology although some altcoins don't follow this definition exactly. Meaning a lot of them are not currencies or some of them don't even use a blockchain.
Basically digital currency is any currency that doesn't have a physical form, so it includes your online banking system, your debit/credit card, your PayPal, bitcoin, shitcoins and even tokens.
But a cryptocurrency is supposed to be a currency that relies mainly on cryptography and blockchain technology although some altcoins don't follow this definition exactly. Meaning a lot of them are not currencies or some of them don't even use a blockchain.
2 different things with the main differentiator being some sort of form of a blockchain. No blockchain= digital; Blockchain= cryptocurrency and/or digital. Basically, digital currency appears it is going to be virtual fiat, esp where a centralized entity is involved.
The main difference of both digital currency and cryptocurrency is the cryptography, digital currency doesn't need implemented cryptography since they using their own poor security. While cryptocurrency they're using cryptography and recorded to blockchain about any transactions ever created.
It's not really a thing to discuss, people just need to understand between shitcoins e.g. ICO, IDO, IEO, DEFI, NFT, and CBDC with Bitcoin.
It's not really a thing to discuss, people just need to understand between shitcoins e.g. ICO, IDO, IEO, DEFI, NFT, and CBDC with Bitcoin.
No, they are different, technically.
Digital currency is somewhat lower than cryptocurrency technically. Cryptocurrency is backed by blockchain technology whilst digital currency is not.
People use another term, virtual currency too. It is commonly used by governments when they want to compromise the misleading term in order to prevent as many citizens in their nations to learn about and get access to cryptocurrency.
Because people naturally want to have something real, not virtual. They feel safer with real things, not virtual ones.
Sum up: Cryptocurrency is bigger than digital currency.
Digital currency is somewhat lower than cryptocurrency technically. Cryptocurrency is backed by blockchain technology whilst digital currency is not.
People use another term, virtual currency too. It is commonly used by governments when they want to compromise the misleading term in order to prevent as many citizens in their nations to learn about and get access to cryptocurrency.
Because people naturally want to have something real, not virtual. They feel safer with real things, not virtual ones.
Sum up: Cryptocurrency is bigger than digital currency.
Digital Currency and Cryptocurrency It may seem that digital currency means cryptocurrency
Every cryptocurrency is a digital currency but not all digital currency are cryptocurrency, this is why we have other digital currency like that in fiat currency which is CBDC, but the only recommended one is cryptocurrency which is decentralized while others cbdc is centralized, dome countries have succeeded in the launched of cbdc but the role couldn't do bitcoin in cryptocurrency any harm by surpressing it acceptability by the people because it's what they really want.
I'm quoting something from wikipedia to get a lot of comparisons about what digital currency is. Here's the quote: https://en.wikipedia.org/wiki/Digital_currency
There is an important point from the explanation of the quote above where digital currencies also include cryptocurrencies. This means that any currency that is connected to the internet and is transacted electronically is called a digital currency. Cryptocurrencies are different digital currencies in that they are built on a blockchain [though not all]. Some of them have developed decentralized nature like bitcoin, but most of them are centralized. Correct me if wrong.
Quote
Digital currency (digital money, electronic money or electronic currency) is any currency, money, or money-like asset that is primarily managed, stored or exchanged on digital computer systems, especially over the internet. Types of digital currencies include cryptocurrency, virtual currency and central bank digital currency. Digital currency may be recorded on a distributed database on the internet, a centralized electronic computer database owned by a company or bank, within digital files or even on a stored-value card.
Digital currencies exhibit properties similar to traditional currencies, but generally do not have a physical form, unlike currencies with printed banknotes or minted coins. This lack of physical form allows nearly instantaneous transactions over the internet and removes the cost associated with distributing notes and coins. Usually not issued by a governmental body, virtual currencies are not considered a legal tender and they enable ownership transfer across governmental borders.
This type of currency may be used to buy physical goods and services, but may also be restricted to certain communities such as for use inside an online game.
Digital money can either be centralized, where there is a central point of control over the money supply (for instance, a bank), or decentralized, where the control over the money supply is predetermined or agreed upon democratically.
Digital currencies exhibit properties similar to traditional currencies, but generally do not have a physical form, unlike currencies with printed banknotes or minted coins. This lack of physical form allows nearly instantaneous transactions over the internet and removes the cost associated with distributing notes and coins. Usually not issued by a governmental body, virtual currencies are not considered a legal tender and they enable ownership transfer across governmental borders.
This type of currency may be used to buy physical goods and services, but may also be restricted to certain communities such as for use inside an online game.
Digital money can either be centralized, where there is a central point of control over the money supply (for instance, a bank), or decentralized, where the control over the money supply is predetermined or agreed upon democratically.
There is an important point from the explanation of the quote above where digital currencies also include cryptocurrencies. This means that any currency that is connected to the internet and is transacted electronically is called a digital currency. Cryptocurrencies are different digital currencies in that they are built on a blockchain [though not all]. Some of them have developed decentralized nature like bitcoin, but most of them are centralized. Correct me if wrong.
Cryptocurrencies are digital currencies. The thing is that there are different kinds of digital currencies, the one your country is planning on launching is a centralized digital currency (or CBDC), meaning it is controlled by your government and issued by them, they are somewhat similar to centralized digital crypto like XRP, the only difference is that CBDC's are issued by central banks. Bitcoin is also a digital currency, but a decentralized one, thus they more or less mean the same thing as they are both digital currencies, but of different kinds. Digital currency is just like the general name for both of them (crypto and CBDC's), see the excerpt below:
Quote
Digital currency (digital money, electronic money or electronic currency) is any currency, money, or money-like asset that is primarily managed, stored or exchanged on digital computer systems, especially over the internet. Types of digital currencies include cryptocurrency, virtual currency and central bank digital currency.
I don't think it's true to use the terms "digital currency" and "cryptocurrency" interchangeably.
Cryptocurrency (as its name suggests) is a currency that use encryption algorithms. In a digital currency, there's not necessarily encryption algorithms.
Cryptocurrency (as its name suggests) is a currency that use encryption algorithms. In a digital currency, there's not necessarily encryption algorithms.
Cryptocurrencies are still somehow decentralized, they are called decentralized currencies, although only bitcoin is most decentralized, others (altcoins) have centralized authority and not fully decentralized, but not controlled by the government unlike fiat, and the control can not be compared too, they are different. Fiat that is controlled totally by the government can be a digital currency, like the fiat transferred electronically while using credit cards or from bank to bank through e-transact while using bank app. Also CBDCs are new fiat that are also digital currencies. Not all digital currencies are cryptocurrencies.
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