Difference between Digital currency and cryptocurrencies

[awosesun]

I was introducing cryptocurency to one of my friend and after so many explanation, he asked me the difference between the two currencies, so below was my answer to him

These forms of currencies are inherently similar. However, their similarity devolves into distinct features when they are examined more critically. Here are some of the major differences between digital currency and cryptocurrency.

1. Decentralization vs. centralization:

Banking system, a majority of digital currencies are regulated by regulatory bodies like the Federal Reserve or other designated government parastatals. This means that transactions are constantly monitored, and their value determined by these regulatory bodies.

On the other hand, cryptocurrencies are fully decentralized. This means that no institution is set aside to regulate them. The rules are set by its community. As a result, the viability of a cryptocurrency is highly dependent on the strength its community can garner.

2. Privacy:

Privacy in this sense refers to the ability to conceal the information of the account owner.

With digital currencies, this is practically impossible. To open a digital account, you need to upload your photo and fill in your personal details, to make use of services like PayPal, you have to fill in your information like name and address. Hence, you can easily be tracked.

On the other hand, you don’t necessarily need to disclose any of your personal information when opening a wallet for cryptocurrency trading. In fact, coins like Dash are available to provide full anonymity, and this is one of the reasons why cryptocurrencies were widely used on the dark web.

3. Transparency:

The framework of digital currencies only allows approved entities to get access to the transaction information. Information regarding transactions of which you’re not directly connected is withheld from you.

On the other hand, cryptocurrency transactions are made available to the public domain. Even though the people behind the transactions are unknown, this way, you can personally monitor how much money is in the system.

4. Legal framework:

Most digital currencies are backed by a recognized central authority. Having legal support from government and financial institution establishes their general usage and acceptance.

On the other hand, cryptocurrencies aren’t backed by any form of a recognized body. As a consequence, they’re not yet fully recognized as a legal tender worldwide.

5. Dominance:

Due to their recognized backing, digital currencies are accepted all over the world. Carrying out transactions with digital currency isn’t restricted by geographic borders, race or even belief systems.

Cryptocurrencies, on the other hand, are loners. They are only accepted by a small group of institutions and compared to other centralized digital coins, their popularity doesn’t measure. Although analysts pose that this will soon change and government regulations will be more favorable towards cryptocurrency.

6. Transaction interference:

Since transactions are monitored by central authorities when using digital currency, they can easily flag transactions suspected to be suspicious or even freeze an account temporarily on the request of the owner. This makes transaction reversible.

On the other hand, once a transaction is completed with cryptocurrency, it is automatically added to the Blockchain and is forever irreversible.

7. Value fluctuation:

For digital currencies, its value is determined and regulated by financial institutions. This makes the currency relatively stable.

Cryptocurrencies, on the other hand, are unregulated. This makes them highly volatile and susceptible to slight behavioral changes in its community.


Hope this will help many newbie here. Cause i myself still learning.

[abarbaz]

Digital currency (advanced cash or electronic cash or electronic money) is a sort of money accessible just in advanced shape, not in physical, (for example, banknotes and coins). Precedents incorporate virtual monetary forms and cryptographic forms of money or even national bank issued "computerized base cash". Computerized monetary standards, in the mean time, are reclaimed for physical products and ventures constantly. You can arrange items by means of PayPal

A Crypto-currencies forms like BTC, Eth are new, however change method of repayment with no clearing house, national banks and center individual or operators remain in the middle of the repayment party like national banks and banks. Accordingly, it's no additional expense of middle of the road party, quick, simple (once you see how to work the wallet paying little mind to hard wallet or delicate wallet). Its straight managing between 2 party, utilizing Crypto-currencies forms as medium of repayment for their merchandise and enterprises. Estimation of the Crypto-currencies standards is moved rely upon free market activity.

[Marcel555]

Cryptocurrency for me is a form of digital currency which is decentralized and provides anonymity to its holders. Hence it is tagged 'crypto'.
They are all forms of digital assets.

[Epimetheus]

The first and biggest difference between Digital currency and cryptocurrency is the nature of currency. Digital currency are centralize in nature which means they are under control of government where cryptocurrency are decentralised in nature which means they are not under control of any kind of authority or government. Secondly digital currency are regulated currency so they are more stable. Where as cryptocurrency are not regulated so they are highly volatile in nature. Digital currency are worldwide accepted currency where as crypto currency are accepted in limited number of country.

[Nnedaddy1]

The difference between the two currencies is this:
Digital currency is has a centralized structure  while cryptocurrency has a decentralized structure  .

Digital currency is relatively stable while cryptocurrency is not.....as a matter of fact,  cryptocurrency is highly volatile.

While government have powers and control over digital currency it can not be said of cryptocurrency.

Etc

[DJ_Rick]

Thanks for outlining all differences between the digital currency and cryptocurrencies. I hope that we will be able to use both of them because these are new trends and this will allow to enjoy many pros

[Cryptogid]

The both types of currency is revolving round decentralized and centralized, currency, you have nailed enough points to keep us calm..well done.

[hildacitra]

It is nice questions because I was ever in trap defining the term of Digital currency and Crypto currency. There are many analogies miss perception to define and differ between Both currency. Basically, Crypto currency can be defined as digital currency as the existence is on the internet or in form of digital, but not all digital money is Crypto currency. The term of Digital currency is a term for all digital money in the internet. What makes different between digital money and crypto currency is that Crypto currency is created with cryptography technology decentralized which use Blockchain technology.
In simple that all transactions in Crypto will be on every computer which uses it.

[FlightyPouch]

There is also this one term that is been asked me including these two which is the virtual currency, they said that it is like that Virtual Currency and Crytpo Currency are the same but it is not, really. Virtual Currency is a currency with no physical state but it is still different with crypto currencies. The examples I can give is the game money or game credits we are seeing to a lot of game platforms these days.

[pooya87]

1. Decentralization vs. centralization:

Banking system, a majority of digital currencies are regulated by regulatory bodies like the Federal Reserve or other designated government parastatals. This means that transactions are constantly monitored, and their value determined by these regulatory bodies.

On the other hand, cryptocurrencies are fully decentralized. This means that no institution is set aside to regulate them. The rules are set by its community. As a result, the viability of a cryptocurrency is highly dependent on the strength its community can garner.

wrong.
first of all this is not a difference between the two categories.
secondly being a cryptocurrency doesn't mean it is also "decentralized". as an example you can take a look at so many centralized altcoins. they also are cryptocurrencies but they are fully centralized. examples are XRP, USDT, ETH, ...

2. Privacy:

Privacy in this sense refers to the ability to conceal the information of the account owner.

With digital currencies, this is practically impossible. To open a digital account, you need to upload your photo and fill in your personal details, to make use of services like PayPal, you have to fill in your information like name and address. Hence, you can easily be tracked.

On the other hand, you don’t necessarily need to disclose any of your personal information when opening a wallet for cryptocurrency trading. In fact, coins like Dash are available to provide full anonymity, and this is one of the reasons why cryptocurrencies were widely used on the dark web.

not necessarily.
again a cryptocurrency may not even provide you with any kind of privacy. it just happens that bitcoin and a lot of the altcoins do it. otherwise there can be coins that don't give you any kind of privacy.

3. Transparency:

The framework of digital currencies only allows approved entities to get access to the transaction information. Information regarding transactions of which you’re not directly connected is withheld from you.

On the other hand, cryptocurrency transactions are made available to the public domain. Even though the people behind the transactions are unknown, this way, you can personally monitor how much money is in the system.

i wouldn't say this is a difference either because you are generalizing again. for example in case of anon coins such as Monero, they offer enough obfuscation that makes it impossible to track, monitor,...

6. Transaction interference:

Since transactions are monitored by central authorities when using digital currency, they can easily flag transactions suspected to be suspicious or even freeze an account temporarily on the request of the owner. This makes transaction reversible.

On the other hand, once a transaction is completed with cryptocurrency, it is automatically added to the Blockchain and is forever irreversible.

this point depends on whether the coin has immutability or not. and again the centralization issue arises. for example in bitcoin when your transaction is included in a block, it will be practically irreversible because of the design and the fact that reversing it needs an attack and costs a lot.
but a centralized coin without immutability can easily reverse any coin they want, and even spend them.



basically i would say the main difference (if not the only one) is that cryptocurrency is a sub category of digital currencies that is based on cryptography and the blockchain technology.

[HabBear]

We're close to currency just being called currency. And then there are variations with how those currencies are constructed and made available. A currency becomes digital when it can be exchanged via the internet (for lack of a more sophisticated term). Crypocurrency means the identity of the participants in an exchange and the security of each transaction is protected by cryptographic means.

[udidrone]

I think digital currencies is include all thing that we use as payment in digital transaction, even it is fiat, or anything else that we can use as payment, it can be called digital currency. But crypto is i can't explain about crypto, but like bitcoin and others of it.

[nicster551]

I was introducing cryptocurency to one of my friend and after so many explanation, he asked me the difference between the two currencies, so below was my answer to him

These forms of currencies are inherently similar. However, their similarity devolves into distinct features when they are examined more critically. Here are some of the major differences between digital currency and cryptocurrency.

1. Decentralization vs. centralization:

Banking system, a majority of digital currencies are regulated by regulatory bodies like the Federal Reserve or other designated government parastatals. This means that transactions are constantly monitored, and their value determined by these regulatory bodies.

On the other hand, cryptocurrencies are fully decentralized. This means that no institution is set aside to regulate them. The rules are set by its community. As a result, the viability of a cryptocurrency is highly dependent on the strength its community can garner.

2. Privacy:

Privacy in this sense refers to the ability to conceal the information of the account owner.

With digital currencies, this is practically impossible. To open a digital account, you need to upload your photo and fill in your personal details, to make use of services like PayPal, you have to fill in your information like name and address. Hence, you can easily be tracked.

On the other hand, you don’t necessarily need to disclose any of your personal information when opening a wallet for cryptocurrency trading. In fact, coins like Dash are available to provide full anonymity, and this is one of the reasons why cryptocurrencies were widely used on the dark web.

3. Transparency:

The framework of digital currencies only allows approved entities to get access to the transaction information. Information regarding transactions of which you’re not directly connected is withheld from you.

On the other hand, cryptocurrency transactions are made available to the public domain. Even though the people behind the transactions are unknown, this way, you can personally monitor how much money is in the system.

4. Legal framework:

Most digital currencies are backed by a recognized central authority. Having legal support from government and financial institution establishes their general usage and acceptance.

On the other hand, cryptocurrencies aren’t backed by any form of a recognized body. As a consequence, they’re not yet fully recognized as a legal tender worldwide.

5. Dominance:

Due to their recognized backing, digital currencies are accepted all over the world. Carrying out transactions with digital currency isn’t restricted by geographic borders, race or even belief systems.

Cryptocurrencies, on the other hand, are loners. They are only accepted by a small group of institutions and compared to other centralized digital coins, their popularity doesn’t measure. Although analysts pose that this will soon change and government regulations will be more favorable towards cryptocurrency.

6. Transaction interference:

Since transactions are monitored by central authorities when using digital currency, they can easily flag transactions suspected to be suspicious or even freeze an account temporarily on the request of the owner. This makes transaction reversible.

On the other hand, once a transaction is completed with cryptocurrency, it is automatically added to the Blockchain and is forever irreversible.

7. Value fluctuation:

For digital currencies, its value is determined and regulated by financial institutions. This makes the currency relatively stable.

Cryptocurrencies, on the other hand, are unregulated. This makes them highly volatile and susceptible to slight behavioral changes in its community.


Hope this will help many newbie here. Cause i myself still learning.

I didn't know that they can be different, but I know that somehow that they are the same and would try to change our financial systems in the future.

[Pursuer]

We're close to currency just being called currency. And then there are variations with how those currencies are constructed and made available. A currency becomes digital when it can be exchanged via the internet (for lack of a more sophisticated term). Crypocurrency means the identity of the participants in an exchange and the security of each transaction is protected by cryptographic means.

"digital" doesn't have to need internet, it needs to be in any form but physical and it requires computers. for example it can be your phone. but since these methods of payment are usually not only in one place so they need internet to connect to the central database.
as for cryptocurrency it is not about "identity of the participants" but the transactions itself. your identity is not protected, your transactions are.

[DAVETUN]

Cryptocurrency is a digital currency that work as a form of exchange that uses cryptography to verift transactions and control the creation of new unit of the token, While A digital currency is a form of currency that is available only in digital or electronic form, and not in physical form, please not that digital currency might not be a cryptocurrency base on it form of generation or development.

[nuraziaaziz]

I was introducing cryptocurency to one of my friend and after so many explanation, he asked me the difference between the two currencies, so below was my answer to him

These forms of currencies are inherently similar. However, their similarity devolves into distinct features when they are examined more critically. Here are some of the major differences between digital currency and cryptocurrency.

1. Decentralization vs. centralization:

Banking system, a majority of digital currencies are regulated by regulatory bodies like the Federal Reserve or other designated government parastatals. This means that transactions are constantly monitored, and their value determined by these regulatory bodies.

On the other hand, cryptocurrencies are fully decentralized. This means that no institution is set aside to regulate them. The rules are set by its community. As a result, the viability of a cryptocurrency is highly dependent on the strength its community can garner.

2. Privacy:

Privacy in this sense refers to the ability to conceal the information of the account owner.

With digital currencies, this is practically impossible. To open a digital account, you need to upload your photo and fill in your personal details, to make use of services like PayPal, you have to fill in your information like name and address. Hence, you can easily be tracked.

On the other hand, you don’t necessarily need to disclose any of your personal information when opening a wallet for cryptocurrency trading. In fact, coins like Dash are available to provide full anonymity, and this is one of the reasons why cryptocurrencies were widely used on the dark web.

3. Transparency:

The framework of digital currencies only allows approved entities to get access to the transaction information. Information regarding transactions of which you’re not directly connected is withheld from you.

On the other hand, cryptocurrency transactions are made available to the public domain. Even though the people behind the transactions are unknown, this way, you can personally monitor how much money is in the system.

4. Legal framework:

Most digital currencies are backed by a recognized central authority. Having legal support from government and financial institution establishes their general usage and acceptance.

On the other hand, cryptocurrencies aren’t backed by any form of a recognized body. As a consequence, they’re not yet fully recognized as a legal tender worldwide.

5. Dominance:

Due to their recognized backing, digital currencies are accepted all over the world. Carrying out transactions with digital currency isn’t restricted by geographic borders, race or even belief systems.

Cryptocurrencies, on the other hand, are loners. They are only accepted by a small group of institutions and compared to other centralized digital coins, their popularity doesn’t measure. Although analysts pose that this will soon change and government regulations will be more favorable towards cryptocurrency.

6. Transaction interference:

Since transactions are monitored by central authorities when using digital currency, they can easily flag transactions suspected to be suspicious or even freeze an account temporarily on the request of the owner. This makes transaction reversible.

On the other hand, once a transaction is completed with cryptocurrency, it is automatically added to the Blockchain and is forever irreversible.

7. Value fluctuation:

For digital currencies, its value is determined and regulated by financial institutions. This makes the currency relatively stable.

Cryptocurrencies, on the other hand, are unregulated. This makes them highly volatile and susceptible to slight behavioral changes in its community.


Hope this will help many newbie here. Cause i myself still learning.

Thank you for this information. It's useful for me newbie like me.

[The.Bet.Group]

I've always considered crypto as a form of digital currency. I'd say keep them under one roof. In fact this might even cause more confusion from a newbie's perspective.

[Eraldo Coil]

The only thing that i know about the difference between digital currency and cryptocurrencies is that digital currency is run or the government is holding it they provide stuff for it to grow and for the people to use it while cryptocrrencies are moving on freely, government doesn't have power to control the crypto only the who's people using it.

[jaaeeeyyyy]

I think digital currencies is include all thing that we use as payment in digital transaction, even it is fiat, or anything else that we can use as payment, it can be called digital currency. But crypto is i can't explain about crypto, but like bitcoin and others of it.

Yes it is, Digital currency and cryptocurrency is both useful on digital media however the main difference is that Digital currency can be a coverted fiat like Dollars, won stored at online wallet for example Paypal and Cryptocurrency is a currency in a form of cryptography like BITCOIN and ETHEREUM. However, we both coined it as digital currency often since we are using it on digital world.

[BitcoinHunt3r]

I've always considered crypto as a form of digital currency. I'd say keep them under one roof. In fact this might even cause more confusion from a newbie's perspective.

True, cryptocurrency is kind of digital currency. There are a lot of things that considered as digital currency even it not related with fiat, Like mobile pulse, In game currency, etc. If crypto i can't describe it really detail.