Digital Currency vs Cryptocurrency: What Are the Differences?

Did you know that transactions worth a total of over $130 billion take place through cryptocurrency every day? With seventy million users, it’s safe to say that crypto has gone mainstream! Yet, many people still do not understand the value and use of cryptocurrency today.

So in what ways is crypto different from the more familiar digital currency you likely use every day? Check out this digital currency vs cryptocurrency guide to find out everything you need to know!

The Basics of Digital Currency vs Cryptocurrency

A digital currency is any type of virtually represented money. When you check the balance of your bank account through an app, use your debit card to make a transaction online, or you use your phone to pay at the grocery store, you’re dealing with a type of digital currency. Simply put, it’s non-physical money used online.

So, what is cryptocurrency? Cryptocurrency is a type of decentralized digital currency that is not backed by an institution such as the government. Instead, its value is set by supply and demand and protected by heavy encryption.

Crypto is not legal tender; the US government considers it property. Still, you can spend it almost anywhere through crypto credit cards or third parties like the company behind bytefederal.com.

The Major Differences

While crypto is a form of digital currency, there are still many unique factors about crypto that appeal to users. For instance, users “mine” crypto themselves through complicated computer calculations. This means that users control the amount of crypto available and how much it’s worth.

Digital currencies have the same central authority that physical money does. Crypto, on the other hand, is regulated only by the community that uses it. No third party will be able to freeze your Bitcoin accounts or cancel a transaction.

Another major difference is that crypto is transparent. Any user can find all transaction details because they are shared publicly on the blockchain that hosts them. However, some cryptocurrencies are designed to be private.

Cryptocurrency Tips

Any cryptocurrency guide will tell you that crypto is a volatile market. Its value is prone to wild fluctuations, especially because it is still an emerging currency.

Here are a few ways you can get the most out of crypto:

• Research the types of cryptocurrency – some are scams while others have proven themselves over time
• Invest in multiple types of crypto
• Be patient through times of low value
• Manage your risk with careful budgeting
• Automate crypto purchases to avoid getting lost in the changing market

Learn More About Cryptocurrency Today!

There’s plenty more to learn about digital currency vs cryptocurrency – and you stand to gain a lot from the knowledge! If you’re interested in more than the crypto craze, continue your research now, and start investing!

If this article helped you out, you’ll love what the rest of this site has to offer! Check out the money and business pages for more information you need to know about crypto and beyond!