Digital currency, also known as digital money or cyber cash is a type of payment method available only in the digital form which suggests that the currencies are not presented in physical form but are only transferred via the internet. This cash can be used to purchase goods across the globe and is ideal for boarder less transfer due to its properties. This idea of digital money was presented in a research paper by David Chaum who wrote about it in the year 1983 which he later established an electronic company called DigiCash that went bankrupt after a few years. Later over the years companies have been established that deal with transaction of money like WebMoney which was in Russia, E-Gold, Paypal, QQ Coins, Perfect Money and Liberty Reserve among others. Today with there are more than 1800 types of companies that deal with digital currency with Bitcoin currency being the most dominant at the moment in the market.
Digital currency at the present uses distributed ledger technology (DLT) as the main type of technology used in the whole process with Blockchain Technology being the leading DLT software production platform for this digital currency. This Digital currency which was conceptualized in the fourth quarter of the 20th century has presented several benefits in the market that includes:
It has reduced the cost and complexity of financial institutions since financial institutions are now able to transact large transactions at a reduced cost as unlike in the past where physical currency was involved. This benefit is also seen where Digital currencies are not bound by exchange rates or interest rates like the conventional financial institutions in the global market. This also helps eradicate third party which further reduces the cost of expenditure.
It has provided transparency to the users in such a way that the entities will know exactly who has used the system and how much has been transacted or traded through the system.
Digital currency also has the advantage of that providing anonymity and security in transactions in this way there is no risk of identity theft such that one can trade their cryptocurrency without anybody knowing or stealing information. This is unlike physical currency where individuals will know when one has a stack of cash or just the entire transaction process. Digital money is highly secured which means that nobody other than the wallet holder can use or have access to the wallet thus this reduces the degree of fraud in the whole process.
The most crucial benefit of digital currency is that it is accessible to everybody in that it reaches out to all the people provided one has the required technologies that are used. This makes trading available to all the people all the time which reduces the time taken to o transactions from the conventional old ways of taking days to access your cash to hours and even seconds. To a whole new world of new to come. #Rewordit