The rise of the digital currency

Digital currency

There is a great deal of popularity and rise in the use of digital currency by companies worldwide. Online currencies have the potential to create a new global monetary system. Digital currencies operate independently and stand to play an important in future commerce where regulatory and policy issues that have not yet been fully resolved.

What is Digital Currency?

Digital currency, affectionately known as cryptocurrency. The exchange takes place between people without the need of a third party, like a bank. It digitally connects users through a transparent process. This process shows the amount and protects the identities of the people involved in the transaction. Because of its transparency, this type of transaction has the potential to reduce fraud. The cryptocurrency procedure uses digital safeguards secure transactions. There is a
digital public ledger kept in order to confirm transactions, called a blockchain, through a process known as mining.

Why is digital currency popular?

Digital currency is popular largely because it presents several important advantages.

  • No need for physical presentation of money, therefore, making digital currency more secure than traditional cash.
  • Users of digital currency will not be the victims of robberies.
  • Ease of access through most mobile devices, tablets and laptops. When using digital currency, there is no need to carry cash.
  • Digital currencies became accessible through a limited number of automated teller machines (ATMs).
  • There is no need to exchange digital currencies into different national currencies when payments cross national borders without the expensive banking system.
  • Digital currency systems also enable anonymous payments.

Challenges

There are security concerns relating to the safety of the use of digital currency. These challenges include but are not limited to:

  • The take up of digital currencies is still relatively small.
  • Susceptibility to attacks from criminal organisations and hackers
  • Moreover, digital currencies and their online exchanges remain extremely vulnerable to security breaches and distributed denial of service (DDOS) attacks.
  • Due to the anonymous nature of transactions, the security of the system is reliant on the honesty and integrity of its users.
  • One of the biggest pitfalls of the digital currency system is its lack of regulation. When users or exchanges are attacked, lost bitcoins are lost.
  • The take up of digital currencies is still relatively small. Susceptibility to attacks from criminal organisations and hackers
  • Moreover, digital currencies and their online exchanges remain extremely vulnerable to security breaches and distributed denial of service (DDOS) attacks.
  • Due to the anonymous nature of transactions, the security of the system is reliant on the honesty and integrity of its users.
  • One of the biggest pitfalls of the cryptocurrency system is its lack of regulation.

In conclusion

can be electronically transmitted, coupled with the ubiquity of the technology needed to carry out the transmission, will make digital currencies a unique and powerful tool going forward. Because virtual currencies aren’t backed by a central bank or controlled by an administrator or government, their values are vulnerable to economic fluctuations and inclines.

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