Digital Currency
Digital currency is a form of money that exists only in digital or electronic form. It is not backed by any physical asset, such as gold or silver, and it does not have the same legal status as traditional forms of money. Digital currencies are also sometimes referred to as “cryptocurrency” due to their use of cryptography for security measures and verifying transactions.
Most digital currencies share certain characteristics with traditional forms of money such as being able to buy goods and services online, store value over time, be exchanged between users directly without relying on intermediaries (such as banks), operate across borders, and provide anonymity when used correctly. However they differ from traditional fiat currency mainly because they are decentralized — meaning there isn’t a central authority overseeing them like governments do with national fiat currencies — instead relying on distributed ledger technology (DLT) networks like blockchain which allow funds to be transferred securely peer-to-peer without an intermediary involved. This makes them much less prone to fraud or manipulation than other payment methods since all participants need consensus before any transaction can take place within the network; this requires trust among the users but eliminates third party interference altogether so no one user has control over anyone else’s funds which provides added security against theft or loss through malicious activity or negligence from individual actors within the system.
The most popular examples include Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC) , Ripple(XRP). Each cryptocurrency works differently depending on its design features but generally speaking these systems rely heavily on encryption techniques for securing data stored in each unit while providing transparency into how those units move around through DLT records maintained by miners who validate transactions occurring within the network using specialized computer hardware called ASICs . To get started investing in digital currency you’ll first need create an account at an exchange where you can purchase various coins then transfer those coins into your own personal wallet before trading them freely throughout different exchanges worldwide – always make sure that whichever platform you decide to use offers adequate protection against hackers & cybercriminals!
