Written by: Ishan Raj Upadhyay - 2022008, Grade XI
Posted on: 07 June, 2021
Digital currencies means money that is within the virtual world in digital or electronic form. This isn’t present in the physical form. Digital currencies are in fact a modern concept of money. There's a vital difference between digital currencies and the currently circulating government issued currencies or physical currencies.
First, it's necessary to form a distinction between digital money and digital currency. Digital money is just the thought that, due to technology, money can now be a digital object, a singular serial number which will be directly exchanged anonymously and without accounting, even as one person would hand a buck to a different person. You had it. Now they need it. Very simple. Digital money is already in widespread usage. For example, when someone makes a deposit on a checking account, the system identifies the owner and creates a credit in step with the worth of the deposit. This money can now be considered digital money, and might be exchanged by real money on an ATM machine, being eliminated within the process, or transferred to a different one that can trade it for goods or services through a mastercard, or withdraw it as banknotes .
Digital money is different from the concept of digital currencies. A digital currency is sort of a real currency, but they're not issued by central banks nor necessarily financially backed within the national currency.. Therefore, the issuing is decentralized, and isn't decided by politicians, but by technical aspects, usually it's well-defined. As an example, bitcoins uses a cryptographic algorithm to come up with the currency, which is formed by the network users and not by a centralized government body. Despite those facts, there are many questions regarding the absence of regulation, and its implications. There are some fear that the digital currencies would make crimes as concealing or drug dealing less difficult.To open a standard checking account, one needs several documents, like a sound ID and proof of residence, whereas to register to a digital currency it's only necessary a legitimate IP address.However, there are several techniques to cover the important IP address, like using proxies, which make the tracing of bad users harder There is also the chance of electronic fraud affect the bitcoins user. for example, there's am attack referred to as "phishing", which consists in tricking the user to think that he's on a legit website, but actually malicious users are the owners of the web site, which then stole data like passwords. consistent with the news In May 2013, phishing site spoofed a well-liked digital currency company. Attacks like this one give details that users need training and education so as to not be fooled, and switch the digital currencies world into a fraud paradise. Recently, Thailand has become the primary country to officially ban bitcoins activities, making them illegal in its territory thanks to ruling.
Source: Wikipedia
