Digital currency (digital money, electronic money or electronic currency)
July. 26, 2020
Digital currency (digital money, electronic money or electronic currency) is a balance or a record stored in a distributed database on the Internet, in an electronic computer database, within digital files or within a stored-value card.
Examples of digital currencies include cryptocurrencies, virtual currencies, central bank digital currencies and e-Cash.
Digital currencies exhibit properties similar to other currencies, but do not have a physical form of banknotes and coins. Not having a physical form, they allow for nearly instantaneous transactions. Usually not issued by a governmental body, virtual currencies are not considered a legal tender and they enable ownership transfer across governmental borders.
These types of currencies may be used to buy physical goods and services, but may also be restricted to certain communities such as for use inside an online game. One type of digital currency is often traded for another digital currency using arbitrage strategies and techniques.
Digital money can either be centralized, where there is a central point of control over the money supply, or decentralized, where the control over the money supply can come from various sources.