Min menu

Pages

The difference between digital and cryptocurrencies

 A new economy has emerged parallel to technological development, and trade relations have become dependent on advanced technical methods in trade exchange and payment of prices, which led to the emergence of a new concept of the economy in the world, which is the crypto economy, cryptocurrencies, and many confuse digital currencies and cryptocurrencies, so in this article an attempt to show The difference between digital currencies and cryptocurrencies and what are the basic differences between the two, cryptocurrencies and digital currencies?


Digital currencies:

Where digital currencies are the money used on the Internet, and they are digital money that exists in the form of numbers, which do not have a physical equivalent in the real world. But digital currencies have all the characteristics of traditional money such as local currencies, and you can obtain them, transfer them or exchange them in other currencies, and they are also used to pay for goods and services, such as filling phone and Internet accounts, or buying goods over the Internet, and paying bills. Also, digital currencies do not have geographical or political borders, as transactions may be sent from anywhere to any point in the world, and digital accounts and their wallets can be considered as bank deposits.


 Cryptocurrencies:

Cryptocurrencies are considered a variety of encrypted digital currencies that have their own system, and cryptocurrencies are used as a means of exchange, and I have gained the confidence of the dealers for their reliance on a complex encrypted system, making communications safe and protected, meaning no information is changed, how what was its type, or allowed to be It is viewed by a third party, and it has a system and protocol called the blockchain or the decentralized digital ledger, and this means that there is no third authority that controls all the procedures, transactions, transfers and transmissions in the network.



 The main differences between cryptocurrencies and digital currencies:

  Although cryptocurrencies are a type of digital currency, there are some basic differences.

By structure:

 Digital currencies are centralized, while cryptocurrencies are decentralized, as they are established on distributed computer systems that manage transactions.

In terms of definitions:

Cryptocurrencies require user identification. With the documents and the permanent address, while the operations in the cryptocurrency do not need any documented definition.


With regard to the transparency of dealing with both:

Digital currencies are not transparent, so wallets ’financial transactions cannot be tracked, and money transfers cannot be seen, as this information remains confidential, and only those who provide the service of digital currencies and cryptocurrencies see transparent. Anyone can see any user’s transactions, as all sources of revenue are placed in a chain General.


 Legal between the two types:

Most countries have some legal framework for digital currencies, such as Directive 2009/110 / EC in the European Union, and Article 4A of the Federal Trade Law in the United States, while cryptocurrencies are not legally recognized yet. Finally, between cryptocurrencies and digital currencies, the difference is that the first is decentralized encrypted, not subject to any central authority, and intermediaries are not relied upon for its management, and the second is central currencies that are traded digitally via the Internet, and its central system is subject to intermediaries.

reaction:

Comments