Digital Currency

Digital Currency is any currency which does not come in physical form (e.g notes or coins).  Digital Currency is computer based, relies on a network and is used for the transfer of goods and services without the need for a physical transaction.  It takes many forms such as standard bank transactions which are routed between banks, between accounts and sub accounts within banks, in game currencies and Cryptocurrencies, to name a few. The point here is that Digital Currency is not a new concept, however the way that Cryptocurrency has changed the payment landscape can be observed quite easily.

Some key advantages of Cryptocurrency as opposed to physical cash or physical transactions are its ability to be instantaneous, automated and decentralised.  This saves money for both the buyer and receiver of a transaction due to limited fees and charges, fewer middle parties, smaller transaction time frames and borderless transactional ability.

Many people think of Digital Currency as just being Bitcoin. However there are a myriad of options in the crypto space as can be seen when perusing a site such as Coinmarketcap. There is fierce online debate about which crypto fulfills the role as a superior currency; however the market clearly still shows favour to Bitcoin being the dominant player. Most will warn you not to discount other projects such as XRP or Litecoin.

Next: How Bitcoin has value