Despite that more than a decade has passed since the emerge of digital currencies, however, controversy and a noticeable confusion still persists between digital and crypto currencies, and the electronic transactions, or what some people call “Digital Currencies”. We will try to eliminate this mystery in this Capsule and others to come.
What Does Digital Mean?
Digital or digitization is the conversion of a physical object into just numbers in order to facilitate transport of things between geographical borders easily, quickly, and more safely. This includes money and other things, as it could be ownership or lease contracts or data of users and employees, and this considered an alternative to paper registration.
It is money used in digital form, but there is really no financial equivalent, it is intangible, although it has symbols to distinguish one from another.
Cryptocurrencies are an advanced stage of digitization of funds. In the first stage, money was just transferred from your account to mine. In order to use the transferred money it had to be withdrawn from the ATM or from the bank to use it to buy things. This process accompanied with some financial problems, such as theft, damage or loss, in addition to the cost of transportation if it was in large sums.
On the other hand, in digital currencies, it just transferred from my wallet into yours and from your wallet to the store or merchant wallet without the need to withdraw it or incurring a cost of transfer.
Therefore, digital currencies can only be exchanged only between electronic wallets, and via the Internet, and in the form of a set of numbers.