Introduction to Digital Currency
                     INTRODUCTION TO 
DIGITAL CURRENCY
WHAT IS A 
DIGITAL 
CURRENCY?
Digital currency is a form of 
currency that is available only 
in digital or electronic form. It 
is also called digital money, 
electronic money, electronic 
currency, or cybercash.
Source: www.investopedia.com
UNDERSTANDING 
DIGITAL 
CURRENCY
Digital currencies do not have 
physical attributes and are 
available only in digital form. 
Transactions involving digital 
currencies are made using 
computers or electronic wallets 
connected to the internet or 
designated networks. 
Source: www.investopedia.com
CHARACTERISTICS 
OF DIGITAL 
CURRENCIES
Digital currencies can be 
centralized or decentralized. 
Fiat currency, which exists in 
physical form, is a centralized 
system of production and 
distribution by a central bank 
and government agencies. 
Prominent cryptocurrencies, 
such as Bitcoin and Ethereum, 
are examples of decentralized 
digital currency systems.
Source: www.investopedia.com
CHARACTERISTICS 
OF DIGITAL 
CURRENCIES 
CONT.
Digital currencies can transfer 
value. Use of digital currencies 
requires a mental shift in the 
existing framework for 
currencies, where they are 
associated with sale and 
purchase transactions for 
goods and services. Digital 
currencies, however, extend 
the concept.
Source: www.investopedia.com
TYPES OF DIGITAL CURRENCIES
CRYPTOCURRENCIE
S
Cryptocurrencies are digital 
currencies that use 
cryptography to secure and 
verify transactions in a 
network. 
Cryptography is also used to 
manage and control the 
creation of such currencies. 
Bitcoin and Ethereum are 
examples of cryptocurrencies. 
Source: www.investopedia.com
VIRTUAL 
CURRENCIES
Virtual currencies are 
unregulated digital currencies 
controlled by developers or a 
founding organization 
consisting of various 
stakeholders involved in the 
process. 
Virtual currencies can also be 
algorithmically controlled by a 
defined network protocol. 
Source: www.investopedia.com
CENTRAL BANK 
DIGITAL 
CURRENCIES
Central bank digital currencies 
(CBDCs) are regulated digital 
currencies issued by the 
central bank of a country. 
A CBDC can be a supplement 
or a replacement to traditional 
fiat currency. 
Source: www.investopedia.com
ADVANTAGES OF 
DIGITAL 
CURRENCIES
• They have fast transfer and 
transaction times
• They do not require physical 
manufacturing and cannot 
be soiled
• They can ease 
implementation of 
monetary and fiscal policy
Source: www.investopedia.com
DIS ADVANTAGES 
OF DIGITAL 
CURRENCIES
• They do not solve all 
storage and infrastructure 
problems
• They are susceptible to 
hacking
• They can be volatile in 
value
Source: www.investopedia.com