Advantages and Disadvantages
Digital currency, also known as electronic cash, is a virtual account or a virtual balance kept on the Internet, on a personal computer, on a shared server, inside electronic documents or on a stored value card. Examples of digital currency include virtual currencies, virtual coins, electronic commodities, central bank digital coins and prepaid digital money. There are various reasons for the emergence and adoption of digital currency. Some of these reasons include reduced fraud risk, increased transaction speed and lower cost for both parties.
There are various uses of digital money. One of the most common and popular uses of digital currency is buying and selling goods online. It is safe and secured way to buy and sell items by giving an address, phone number and credit card information. The transaction takes place almost instantly and the payment can be done instantly too. Some merchants use digital currency to facilitate the payment of their customers.
Another use of digital currency is through peer to peer lending. It refers to financial activities between individuals and organizations where no third party is involved. In this case, the participants to interact through a virtual network instead of conducting transactions through a physical public ledger. The transactions are conducted through a ledger in a decentralized manner without the need for third parties.
Virtual currencies like cryptocoins or cryptosurges are considered as “anarchy” since they are not regulated by any specific government. They are neither required to be registered nor regulated by any regulatory authority. This gives them an opportunity to grow and develop without any governmental regulation or restrictions. In fact, the only thing governments sometimes try to do is to impose limitations on the activities of cryptocoins like the operation of unregistered charities and unsecured banks since they are viewed as threats to the stability of the economy.
The use of digital currencies like the blockchain protocol is not new. This protocol was first developed back in the year 2021 and remains to be the most popular and widely used software that enable its users to trade. The main objective of the Blockchain protocol is to provide a set of standards and guidelines to help in the development and implementation of digital currencies.
The protocol also allows users to record and monitor the transfer of digital currencies. As long as the Blockchain provides a transparent and safe system for the transfer, it is believed to have reduced the number of frauds and scams that usually occur when cash is transferred through the traditional means. There are several ways in which the Blockchain can be implemented. A new version of the protocol called Boolberry was recently launched that aims to provide additional security and functionality to the system. Apart from this, the government of Swiss has even started using the Blockchain protocol in order to make the country’s money more transparent.