As name implies, digital currency is a type of payment
system that is created digitally and spent both online and offline with the aid
of the internet. Let us understand that, digital currency is not the same as
electronic money. Electronic money is your traditional fiat currency on an
electronic platform, like a credit card, atm card, mobile bank application or a
bank USSD code. It’s you managing your cash in your bank via electronic means.
Digital currency is different. I’ll explain.
Digital Currency is not physical cash or electronic cash but
has the ability to perform the same operations they carry out. That is, being
used as a medium of exchange, store of value and a unit of account, which are
the three main functions of money. In layman, you can buy with a digital
currency; you can store a digital currency just as you store your money; and
you can value a commodity or service with a digital. Just like Peter, George
can also read, write and eat but George is not Peter and Peter is not George.
They are not the same because they perform functions like the above
differently.
Digital Currency exhibits similar properties with physical
currencies but in a different way. Traditional currencies can be used for
transactions but digital currency allows for instantaneous transactions. There
is change of ownership with real life currencies but there has to be a border,
i.e. a bank, an identifiable person to transfer money with. However, digital
currencies allows for borderless transfer-of-ownership. It allows for a
nameless or anonymous transaction.
There are a lot of digital currencies in today internet
market space. We have Bitcoin, Perfect Money, litecoin, etc. You can read about
these three examples by going to the home page of this blog.
Digital Currencies are not acquired or stored like your
traditional fiat money though. You purchase or exchange digital currencies with
your traditional fiat currencies on certified exchange portals, such as (https://instantexchangers.net) and
placed in a software programmed online wallet (https://jostpay.com)
You can read previous post to find out more about these
digital currencies. That’s your abc on what digital currency is all about.
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