What is the difference between digital currency and cryptocurrency?

Written by Evgenia Sidorova
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What is the difference between digital currency and cryptocurrency?

What is the difference between digital currency and cryptocurrency?

Money is evolving. While in the past people used gold or paper money, in modern society people started to use electronic money, which was maintained by banks, but the evolution of money has gone even further. Digital currency and cryptocurrency emerged. What is the difference between cryptocurrency and digital currency? What are the peculiarities of one and the other? You can find answers to all these questions in this article, as well as possibly learn something new for yourself.

What is digital currency?

It is important to clearly understand the difference between digital currency and digital currency. Digital currency is not the kind of money you can transfer between banks. Digital currency is most often used by active internet users, namely webmasters, freelancers, bloggers and so on.

To the striking examples of digital currency can be attributed payment systems such as PayPal, Neteller, Skrill, WebMoney, Perfect Money and so on. That is, digital currency is the currency that is actively used for Internet payments and any transactions on the Internet.

For example, you have your own website or you run a channel on You Tube. You have invested a lot of work in their creation and implementation, were able to place ads and your income needs to be derived. You may still need to pay for hired workers who help create content on your web resources.

You withdraw your profits in digital currency, send the transactions to the people who work for you, and pocket the difference.

Transactions are very fast and it is also possible to exchange digital currency as immediately by SWIFT transfer to your bank card or through online exchangers. This is a very convenient tool that facilitates commercial transactions on the Internet.

What is cryptocurrency?

Cryptocurrency is an evolutionary extension of digital currency, but it has its own special technology called blockchain. The most famous example of cryptocurrencies is Bitcoin.

The peculiarity of cryptocurrencies is decentralization and encryption of data on the owners of this currency, as well as on the transactions performed. With the help of cryptocurrencies it is possible to maintain complete anonymity. The crypto industry is actively developing every year. In the past, the main disadvantage of cryptocurrencies was their volatility, so many people used digital currencies on the Internet because their value was clearly tied to the same US dollars. Cryptocurrencies have fluctuated in value up to a certain point, but still managed to create a semblance of a cryptocurrency digital currency and this is the USDT of Tether Limited.

And unlike digital currencies – cryptocurrencies can also be stored on Ledger-type cold wallets. It looks like a flash drive and with a connection to electronic devices you can access your money. It’s as safe and convenient as possible. But which is better? To use digital currencies or should you switch completely to cryptocurrencies?

Digital currency vs cryptocurrency

So what is better? It is worth recalling the main pros and cons of this or that form of electronic money.

Cryptocurrencies have more volatility, but this is not the main disadvantage, because there are those cryptocurrencies that are pegged to fiat currencies at a ratio of 1 to 1.

The only thing that is not yet fully provided is not all owners of web sites and blogs can withdraw their earnings in cryptocurrency, but many can accept donations in it from their loyal audience.

Digital currency, on the other hand, while keeping up with cryptocurrencies in terms of transaction speed, has almost the same advantages as cryptocurrencies, but they do have one serious limitation.

Digital currencies as well as money in electronic banking systems are controlled by the central bank. Although legally electronic payment systems are not banks, as such, but their collateral is maintained by them.

For example, the electronic payment system Web Money is provided by different legal entities in different countries, but nevertheless they are controlled by banks. They require you to disclose your personal data, which contradicts the concept of anonymity. Also, there is no question of decentralization of payments. Your money can easily be frozen and access to your own money blocked. With cryptocurrency, this is out of the question, even though it has its own risks.

Based on this, we can conclude that cryptocurrencies and digital currencies are extremely convenient in terms of transaction speed and convenience. But cryptocurrencies win on other characteristics, namely the privacy and security of payments.


Now you know the answer to the question – “What is the difference between digital currency and cryptocurrency. However, you don’t have to use one or the other. You can continue to use both digital currencies and cryptocurrencies.

These are two types of means of payment that simplify our online activities. However, cryptocurrencies will benefit from one factor.

Blocking a payment system, even if it is registered in an offshore zone, is much easier than blocking a cryptocurrency.

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