The evolution of money which has taken the globe to another level of financial development has been on the burner in the global financial round table discussion.
In this present evolutionary trend, it has been either the digital currencies or the cryptocurrencies. Whether be it digital or cryptocurrency, both are virtual currencies which are warehoused in a digital wallet.
What then is a digital currency?
According to Wikipedia, Digital 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 currencies show similar properties 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 as legitimate tender and they enable ownership transfer across governmental borders.
Digital money can either be centralized, where there is a central point of control over the money supply or decentralized, where the control over the money supply is predetermined or agreed upon democratically and internally.
EYE ON THE CRYPTOCURRENCIES:
A cryptocurrency, crypto-currency, or crypto is a group of binary data which is designed to work as a point of exchange wherein individual coin ownership records are stored in a ledger which is a computer dependent data using concrete cryptography to secure transaction records, to control the creation of additional coins, and to verify the transfer of coin ownership. Cryptocurrencies are generally physical fiats, as they are not backed by or convertible into a product. Some crypto systems use validators to maintain the cryptocurrency. In a proof-of-stake model, owners put up their tokens as guarantee. In return, they get authority over the token in proportion to the amount they stake. Generally, these liquidity providers get additional ownership in the token over time through network fees, newly minted tokens or other such reward mechanisms. Cryptocurrency does not come in physical form (like paper money) and is typically not issued by a central authority. Cryptocurrencies typically use immutable and decentalized as opposed to a central bank control (CBDC). When a cryptocurrency is minted before issuance or issued by a single issuer, it is generally considered centralized. When implemented with decentralized control, each cryptocurrency works through distributed ledger technology, basically a blockchain serves as a public financial transaction database.
Bitcoin, first released as open-source software in 2009, it is the first decentralized cryptocurrency. Since the release of bitcoin, many other cryptocurrency have been created.