What is Digital currency?
Digital currency is a payment method which exists only in electronic form and is not tangible, however it is not under the regulation of the governments or issued by the central banks. Digital currency does not enjoy the same kind of stability when comparing to regular physical currencies but nowadays many people are using it for different purposes like shopping online or money transactions. Digital currency is also known as digital money, e-money and cybercash.
Cash vs Electronic Money?
Concept of e-money is still young but it’s versatility and reliability has made it big hit. Computer has revolutionized human life. Use of internet opened new dimensions in computer use. Today it is being used in every field, in every part of world.
• E-money ultimately works similar to paper money without the risks and inconvenience, which may occur with cash money.
• Unlike cash money, it can pass immediately between the two transactions online parties. Smart cards, credit cards, digital cash all of these makes money transfer in no time.
Advantages and disadvantages of Digital Currencies like Bitcoin.
• Fast and Easy Payments:
You just need the wallet address of the person/company whom you want to send money to and nothing else. No identity or No one.
No one except the owner of a wallet can make payments from a wallet.
• Low/ No Fees:
Banks charge fees to conduct payment and money transfer but with virtual currencies, these fees are very low or zero.
• No Fraud:
Once payment is sent, it can never be reversed. So there is no way someone can charge you back or no risk of Cheque bounce.
• Irreversible Payment: There’s no center point in payment processing so if you transfer someone by mistake and want to get a refund, you can only ask the person to refund payment and if he refused then forget about it.
• Not Worldwide Acceptance: There are not many companies, Institutes, websites or stores who accept it. If you want to use the money that is in the form of digital currency you need to sell the crypto then you can use the money.
• Losing Your Wallet or Password: If you stored your digital currencies in your mobile or laptop and if you lose it then there’s no way to get your money back you can’t complain to police or even some other person can’t get it, it’s like burning your money. The only way to keep it safe is to keep it offline.
Taxonomy of money and exchange mechanisms: