How is digital currency defined?

Digital currency is a cryptocurrency based on cryptography and blockchain technology. It has the characteristics of decentralization, anonymity, security, non-forgeability, scarcity, etc. The main types include Bitcoin, Ethereum, stablecoins and tokens. . Useful for a wide range of purposes, including store of value, payment method, investment and decentralized finance (DeFi).

Definition of digital currency

Digital currency, also known as cryptocurrency, is a digital or virtual asset that is encrypted by cryptography technology and recorded and traded using blockchain technology.

Features:

• Decentralization: Managed by a distributed ledger (blockchain) and not regulated by any central agency.
• Anonymity: Transaction records are only stored on the blockchain with no personally identifiable information.
• Security: Based on cryptography to prevent unauthorized access and transaction manipulation.
• Unforgeable: Once a transaction is recorded on the blockchain, it cannot be reversed or changed.
• Scarcity: Many digital currencies have a limited supply to control inflation.

Type:

There are many types of digital currencies, mainly divided into:

• Bitcoin (BTC): The first and most well-known digital currency.
• Ethereum (ETH): A blockchain platform that supports smart contracts.
• Stablecoins: are collateralized by fiat currency (such as USD) and designed to maintain a fixed exchange rate.
• Token: A tradable asset built on an existing blockchain platform with a specific function or purpose.

Uses:

The uses of digital currencies continue to expand, including:

• Store of Value: Similar to precious metals like gold.
• Payment methods: More and more merchants are beginning to accept digital currency payments.
• Investing: As an asset class, it can be traded and invested.
• Decentralized Finance (DeFi): Facilitates intermediary-free financial services such as lending and trading.

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