Difference Between Digital Currency and Cryptocurrency

Digital Currency vs. Cryptocurrency: Digital currencies and cryptocurrencies are not the same. Here are the key differences between digital currency and cryptocurrencies.

Digital Currency, Cryptocurrency

Digital Currency Vs. Cryptocurrency: What's the Difference?


"Digital currency is an electronic form of fiat money that is issued by governments. While Cryptocurrency is a decentralized, non-physical currency that is issued by a private system and runs on blockchain technology."

In ten or twenty years from now, the way we use currency may completely change. The sudden entrance of cryptocurrency has changed the world drastically. Many cryptocurrency enthusiasts are curious to buy Bitcoin.

Bitcoin is the first decentralized digital currency, in fact, bitcoin is a completely virtual coin that runs on blockchain technology.

Riding on the popularity of Bitcoin are other cryptocurrencies like Shiba Inu which is more of a meme coin. While these types of coins may sound like a joke, they can actually be traded.

With sophisticated blockchain technology, cryptocurrency offers a very secure and faster mode of decentralized currency transactions. However, if you are new to this cryptocurrency and digital currency conversation, it might not be easy to differentiate between cryptocurrency and digital currency. 

The digital currency has a liquid form where the cryptocurrency has no physical form at all. There are many such differences between cryptocurrency and digital currency. In this article, I will elaborately discuss different aspects that differentiate cryptocurrency and digital currency.

What Is Digital Currency?

Digital currency, or electronic currency, is a type of currency that stays in electronic form. It also has some other names like electronic money or cybercash. One can also convert digital currencies into cash. The users can access their digital currency with their smartphones or computers. 

What Is Cryptocurrency? 

Cryptocurrency is a digital currency based on sophisticated blockchain technology, a distributed ledger technology enforced by a chain of computers that secures the currency through cryptography. The cryptocurrencies are decentralized, and they have no physical form.

There are four types of blockchain, namely: public, private, consortium/federated, and hybrid.

The current investment trend of cryptocurrency proves it as a highly volatile currency.

The currency derives its name from the encryption technique responsible for its production.

Difference Between Cryptocurrency & Digital Currency 

There are some aspects and according to which we can differentiate between cryptocurrency and digital currency. Here are some of the prominent differences. 


Encryption is one of the primary differences between cryptocurrency and digital currency.

  • There is no encryption available for the digital currency where the cryptocurrency is highly encrypted and secured. 
  • Because of no encryption, digital currency can get robbed from the bank by hackers. But in cryptocurrency, the users create an account in a forum with a cyber security system that makes it impossible to hack.

Current Rate

  • The current market rate of digital currency is the same as the global market rate. The users do not need to wait and research before making any transaction.
  • But the cryptocurrency market is highly volatile, and it can change at any second. You may even face a sudden change in the rate of cryptocurrency during the completion of a transaction.


  • In the digital currency transaction, there is only a little transparency involved. The senders and the receivers can only get the information of the transaction amount, bank, time, and date.
  • Blockchain technology, on the other hand, focuses more on security. It records all the conversations between the two dealers from before the transaction and after the transaction. The blockchain keeps the conversation confidential away from the access of anyone else. 


  • The digital currency has a governing authority. The central banking system or the government is the authority that controls the digital currency. The bank can monitor the transactions of digital currency. 
  • On the other hand, Cryptocurrencies are decentralized. There is no governing authority like the bank or the government that controls the cryptocurrency. 

Transaction Fee

  • The digital currency transaction costs some amount of transaction fees during every time of payment.
  • But there is no transaction fee involved with the transaction of cryptocurrencies. Blockchain technology is responsible for reducing transaction expenses to zero. And there is no third-party agent involved.

Digital Currency Pros & Cons



Proper regulation & accountability is available in digital currency transactions.

The banking transaction through online payment requires some fees, which the users may find annoying.

High mobility is another advantage of digital currency. Users can make their payments faster through online bank transactions.

Digital currency transactions may sometimes be slow. There is a lot of paperwork involved in bank transactions online. 


Cryptocurrency Pros & Cons 

There are certain advantages and disadvantages of using cryptocurrency. Here are some pros and cons.



Investing in cryptocurrency may help you earn a high amount of money in return. 

The volatility which is the reason why cryptocurrency investors may earn lots of money is the same reason why theft might lose a lot of their investments if the value of the cryptocurrency goes down. 

As the awareness of cryptocurrency is growing, its acceptance is growing in the market as well. Many stores around the world and business companies are trading using cryptocurrencies.

Although the acceptance of cryptocurrencies is increasing, the impact has yet to reach worldwide. A large portion of the global population is alien to cryptocurrencies.


Both digital currencies and cryptocurrency have their merits and drawbacks. The digital currency has the banks and the issuing government that backs it up, making itself a trustworthy currency. In contrast, cryptocurrency has no governing authority, which makes it independent of any outward interference.

Digital currencies in the form of online bank transactions have a popular use. Cryptocurrencies are also getting more attention every month. Bitcoin mining, moon bitcoin cash are no new terms to many. The future of blockchain technology is very bright.

Bitcoin trading is the buying and selling of bitcoins. Bitcoin trading has added a new dimension to currency trading with its dynamic strength and volatility.

Blockchain may change nearly every industry in the near future. We can expect cryptocurrencies to dominate the world of currency in the near future.  

The Scientific World

The Scientific World is a Scientific and Technical Information Network that provides readers with informative & educational blogs and articles. Site Admin: Mahtab Alam Quddusi - Blogger, writer and digital publisher.

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