Cryptocurrency is often confused with digital currency, but this is a mistake, as there are fundamental differences between them. In this article, we will find out the difference, as well as combine their advantages for the benefit of the financial sector.
Digital currency is money used for online payments. It exists only in digital form and has no real equivalent. But they have all the characteristics of fiat money: they can be sent, received, exchanged, cashed out. They can be used to pay for goods in online shops, pay for utilities, telecommunication, internet, fines, etc. Money from digital wallets can be sent and received throughout the country.
And cryptocurrency is a type of digital currency that is considered a more secure tool for data exchange due to cryptography. Cryptography ensures the accuracy of the protocols and algorithms created and analysed in order to transfer data without alteration or destruction. Cryptocurrencies are based on blockchain technology. All transactions in its network are not controlled by any regulatory authorities.
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Although cryptocurrency is a type of digital currency, there are significant differences between them:
The centralized systems implementation into a decentralized network could be successful. More than two billion people neither have bank accounts nor use their services worldwide while more than five billion people use mobile communications. The number of bank customers will significantly increase if it becomes possible to implement the banking system into mobile networks. Cryptocurrency and blockchain will provide people with security and transparency via decentralization. Digital money at the same time will provide the governing body with the rules.