Types of Digital Currency
Digital currency is a digital or electronic form of money that is not physical. Digital currency is stored in an electronic distributed database within stored value cards or digital files and may be used to buy services and physical goods using an electronic device.
Cryptocurrency
Today cryptocurrencies have become a global phenomenon known by most people but understood by few. To realize digital cash, you need a payment network with account balances and transactions. One major problem every payment network has to solve is to prevent double-spending.
That is to prevent one entity from spending the same amount twice use. Usually, a central server keeps records of all the balances in a decentralized network. Some examples of cryptocurrency include;
Bitcoin
Bitcoin is the first decentralized type of digital currency. Bitcoin relies on something called the blockchain. A simple way to understand this is to imagine a ledger.
Every time anyone buys or sells anything related to bitcoin is recorded in this ledger called the blockchain, and then it is copied hundreds and thousands of times every single hour across multiple computers to make sure that everyone is on the exact same page.
Litecoin
This is a type of cryptocurrency that was designed to improve on bitcoin technology with a lower fee, shorter transaction times, and more concentrated miners
Ethereum
Ethereum is a blockchain-based software platform. It is the second-best cryptocurrency after bitcoin. Ethereum can be electronically stored, transferred from one online wallet to another, and traded electronically.
Bank Digital Currency
This is a digital currency established as money that has no intrinsic value. It may have value only because the government maintains its values, or the parties involved in exchange agree its values.
E-Cash
This is a digital money product that provides a way to pay for products and services without resorting to physical money.
Virtual Currency
This type of unregulated digital currency is issued and controlled by only its developers, and a specific virtual community uses it. The central bank or public authority does not issue virtual currency, but legal people accept it as payment. And it can be stored in digital wallets, traded electronically, or transferred from one wallet to another.…