Digital currency is a type of currency that is created and stored electronically, using computer networks and cryptographic algorithms to secure and verify transactions. Digital currency is also known as digital money, electronic money, or virtual currency.
There are two main types of digital currency: fiat digital currencies, which are issued and backed by a central authority, and cryptocurrencies, which are decentralized and not backed by a central authority.
Fiat digital currencies, such as e-euros and e-dollars, are issued by central banks and are designed to be used as a substitute for traditional fiat currencies. They are typically used for online transactions and are not widely accepted as a form of payment in physical stores.
Cryptocurrencies, on the other hand, are decentralized and use cryptography for security. They are not backed by a central authority and are not considered legal tender in most countries. Examples of cryptocurrencies include Bitcoin, Ethereum, and Litecoin. Cryptocurrencies are used for a variety of purposes, including as a store of value, a medium of exchange, and a means of raising capital.
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