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Digital Currency vs. Cryptocurrency What is the Difference?

To date, many people consider cryptocurrency and digital money the same. And if you are one of those, think twice! These two forms of currency are different from each other in various scenarios. So, what are cryptocurrency and digital currency, and how do they differ? Let’s learn: Trades Easy With Blockchain.

What is Digital Currency?

A digital framework of fiat currency that one can easily make use of for contactless transactions is called digital currency. This type of money is relatively popular among users because you can withdraw money from an ATM after converting it into cash. Usually, this form of currency functions with the assistance of an authority.

What is Cryptocurrency?

Cryptocurrency comes under the control of computer algorithms. Central figures have no managing power for cryptocurrencies. These are sections of codes created after mining the blockchain. The purchasing power for crypto comes from its community of users. There is 100% transparency at each phase of its journey. If you are looking to invest or trade cryptos check out Bitcoin smart. 

Differences between Digital Currency and Cryptocurrency

  1. Centralization

The primary factor that makes digital currency different from crypto is where the power of control resides. For a digital currency, the control over the monetary value of coins lies in the hands of the Reserve Bank in India and the Fed in the US. The mediators and the banks (controlled by the government) also have the power to set the value of the digital currency.

On the other hand, cryptocurrency goes around with a transparent system. That means no third party or middleman has control. Cryptocurrency asset mining, ownership, and transfer are 100% unambiguous. Moreover, in crypto, the value of coins is not decided on behalf of the central banking authorities or regional geopolitical issues.

  1. Transparency

Every single transaction record in cryptocurrency is collected in the public domain. It’s the decentralized ledger that keeps the record of the blockchain details. This is why cryptocurrency offers transparency to its users.

While in digital currency, it’s challenging to manage any disagreement that occurs during a transaction. It’s because the banking authorization and the persons at the two ends of the transaction know about the details. Somewhere or the other, the ‘transparency’ is missing in the case of digital currency.

  1. Encryption

Cryptocurrency outshines digital currency concerning encryption. Crypto coins are stored in a wallet. And since blockchain technology undergoes in cryptocurrency, it is highly secure. So, there are rare cases when crypto assets could be vulnerable to cyber-attacks. In contrast, Digital currencies are primarily e-cash. These coins do not require any custom-built indigenous methods for encryption.

  1. Stability

Digital currency wins over cryptocurrency in the matter of stability. Where crypto is volatile, digital currency is stable. Due to the stability, it becomes easier to manage transactions. Moreover, digital currencies are the fiat version of approved currency. Thousands & millions of users use it for trading, so it can easily be understood.

Cryptocurrency is less stable than digital currency. It is still a new user technology, gaining popularity but it isn’t mainstream. Moreover, the price volatility of cryptocurrencies obstructs the stability level.

  1. Legality

Legality matters a lot for the users of digital currency and cryptocurrency. Crypto isn’t backed by government authorization, so its values are minimum or negligible. Today, a developing nation such as India is adopting the necessary steps to check the legality and acceptance of cryptocurrency. Opposite to it, digital currency is valued by government bodies and banks, so it’s considered legal.

In whatever way, the surge in the number of depositors and the increasing use cases of blockchain today contributes to the payment of cryptocurrencies. And so it’s expected that a few discussions about the legality of cryptocurrencies will soon happen.


In conclusion, both digital currency and cryptocurrency have some benefits and drawbacks. While digital currency is a trustworthy coin, crypto is independent. On the one hand, digital currencies enjoy popularity. On the other hand, crypto is also getting more attention among users. Making an informed choice between the two is best.

Yes, it won’t be wrong to say that blockchain can transform every single firm in the coming time. But, we also should not underestimate that cryptocurrency is rising, and so can dominate the world of currency very soon. 

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