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.
Cryptocurrency is an encrypted data string that denotes a unit of currency. It is monitored and organized by a peer-to-peer network called a blockchain, which also serves as a secure ledger of transactions, e.g., buying, selling, and transferring.
Difference between Cryptocurrency & Digital Currency:
1. Digital currency is the electronic for of fiat money that can be used in contactless transactions.
- Cryptocurrency is a store of value that is secured by encryption.
2. Digital currency is regulated by central authority (RBI for India).
- Cryptocurrency is decentralized and unregulated.
3. Digital currency rates are stable, and currencies are globally accepted.
- Cryptocurrency rates are highly volatile, and digital coins are not widely accepted yet.
4. Digital currency transactions are only known to the sender, receiver, and the bank.
- Cryptocurrency transactions are publicly available on a decentralized ledger.
5. Digital currency needs strong passwords to protect digital wallets, banking apps, credit, debit cards.
- Cryptocurrencies are secured by encryption.
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