Is Digital Currency the future money? Though things about the future of money are opening up solely, the buzz has definitely become stronger. People are curious about what digitization of currency means and how cryptocurrency and other digital crypto assets work. If you have a lot going on in your mind, you can read some ideas on terms like digital currency management, crypto assets, etc. curated below.

What Does Cryptocurrency Mean and is it same as Digital Currency?

Cryptocurrency finds its roots in cryptology. The exchange of information in coded language happens in cryptology. This idea of exchanging information is coupled with public ledge maintenance technology called blockchain. The resultant is cryptocurrency. It just holds the value of the transaction and the transactions are recorded in the blockchain. There is no centralized authority presiding the transactions happening in cryptocurrency.

Some people are accepting the term digital currency for cryptocurrency, but the two differ slightly. As a digital currency management beginner, you must know that cryptocurrency is an asset that is managed using decentralized ledger maintained in a blockchain. But, digital currency is just the digital form of a fiat currency. It is not governed by the blockchain technology but has the centralized regulatory authority. So, the digital currency can be seen as the type of currency borrowing its features from cryptocurrency but regulated and stored through a different mechanism.

Features of Digital Currency

In India, the digital currency about to be introduced will be known as CBDC or Central Bank Digital Currency. The cryptocurrency experts in India call it a welcome move by the Government. It will be characterized by:

  1. Intangibility: The digital currency will simply be the digitized form of the fiat currency. It will be presented just by a record on the computer and will replace all currency notes and coins. 
  2. Centralized regulatory authority: Though it will be saved using distributed ledger system, the regulatory authority will be centralized and only one. 
  3. Cryptography-based authentication: The validation of transaction will be done using cryptography. Private keys will be given to the agencies involved in authentication. It will allow them to have the privacy of peer-to-peer transaction but the cover of central regulatory authority will provide them the protection from frauds and unwarranted transactions.

Role of Digital Currency

The digital currency will simply be the enabler of a transaction. It will be used to sell or buy the goods or services. Also, the transaction of property or availing any service will be done through digital currency. The agencies involved in transaction will enjoy better safety, transparency and quickness of the exchange of goods/service and digital currency.

The Road Ahead

With the introduction of crypto mutual funds and crypto index fund, the investment in crypto assets has already started. You may approach the cryptocurrency experts in India to understand the working of these investment platforms. In future, you may be doing the same with digital currencies and will be using the expertise gained today to trade in these in future. 

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