Type of digital currency

What is Digital Currency?

Digital Currency is a currency found only in an electronic form as it is used for trading over the internet. They are famous for allowing transparent and secured digital payments. Although their popularity is constantly growing, their adoption as a reliable alternative to physical money is nowhere close. Some of the popular digital currencies are Ethereum, Bitcoin and Litecoin.

How Does Digital Currency Work?

Also known as electronic currency, digital currencies are of various kinds, including virtual and cryptocurrencies as one of their types. The biggest category of electronic currency includes virtual, crypto-assets and digital money. Based on their purpose and functionality, electronic currencies work in different ways.

From a legal standpoint, there are mainly two types of digital currency, centralized, and decentralized. The centralized one usually is strictly regulated with pgovernment backing. It is subjected to all movements the physical version of the currency has and works just like real money would.

With the growing popularity of digital currencies in countries like the U.S., India and Japan, nations have started working towards regulating these currencies. In 2015, New York made headlines for being the first state in the U.S. to regulate virtual currency companies. Many countries have plans to launch their own cryptocurrencies.