What are the differences between a digital currency and a cryptocurrency?

There are several electronic payment methods; Such as electronic money and virtual money, and there are many essential differences between these two types, as follows

In terms of definition, electronic money is money or money that is exchanged electronically, and it is in the form of an electronic store or a technical device that stores monetary values, and is used in many fields; Such as payment to other parties - other than those who issued it - and it also acts as a pre-payment instrument.

As for virtual money, it is a type of unregulated digital currency, which is available only in its electronic form, and virtual money can be stored and dealt with through dedicated programs, mobile or computer applications, or through dedicated digital wallets, and private monetary transactions are It is distributed over the Internet using secure ad hoc networks, also called cryptocurrencies.

In terms of means of production and ownership

Electronic money can be created in several steps; First, the buyer gets a certain amount of it by one of the issuing banks in the form of small cash units called (Tokens), then the buyer gets a special program for the purpose of managing electronic money. This program is unpaid and provided by the company (Cyber ​​cash), which protects the monetary units from any erasure or copying, as for the seller who deals with this type of money; He must partner with one of the banks that issue electronic money, and he must also acquire a special program from the same company (Cyber ​​cash) to secure and protect electronic money in the field of sales.

Any individual can also create and own a new virtual currency by creating a (blockchain); It is one of the cryptographic techniques in a single currency, and it is possible to use several online educational programs to learn how to create a virtual currency, and it must be noted that to create such a currency it requires at least basic cryptographic skills and a deep understanding of (blockchain).

In terms of the type of control and supervision

In the event that electronic money is issued by the Central Bank, there is no type of supervision over that, but if it is issued by ordinary banks or credit or non-credit institutions, in this case, electronic money must be subject to digital supervision and control by central bank; To avoid all the risks that result from the issuance of this money by these institutions. As for virtual money, it is not subject to any kind of supervision or control, whether by the central bank or any official body in the country.

In terms of the exporter

The exporter knows; that it is the authority responsible for issuing this type of money, and that the first source of electronic money is the central bank located in any country, and credit and non-credit institutions that carry out money business can be its exporter; Like France, also banks and financial institutions; Like America, but with the condition that it is subject to the control and supervision of central banks.

As for virtual money, it is a type of unregulated digital money as mentioned earlier, and therefore is not issued or controlled by the central bank, it is usually issued by special issuers or certain individuals, and is also used by specific virtual communities.

In terms of public opinion and degree of acceptance

One of the advantages that electronic money enjoys is that it is widely accepted, whether by individuals or institutions, where its user can deal with it with several other parties or banks, and the degree of acceptance of electronic currency may depend on: the efficiency of the issuer, and confidence in the commercial field.

Contemporaries have varied opinions on virtual money. Previously, dealing with virtual money was very limited, but at the present time the exchange of the new virtual currency has expanded significantly, especially Bitcoin, which has proven itself globally, and Germany is the first country to recognize that Bitcoin is a type of electronic money. However, virtual money still enjoys a lack of confidence among some, depending on the consequences of the issuer and the parties controlling it.

In terms of transparency in trading

Electronic money enjoys high transparency in trading, as the texts related to electronic money are very clear, as they show the rights and obligations of each of its parties,[12] as for virtual money, one of its distinguishing features is transparency, according to the expert Primavera de Filippi, researcher At the National Center for Scientific Research in Paris.

For example, if a person owns a bitcoin wallet, anyone else can know the number of his bitcoins, as well as the number of transactions that have taken place, and thus anyone can view them with complete transparency.

Examples of electronic money

1. Electronic wallet: An electronic wallet is a smart card that is used to store specific monetary values, using a magnetic stripe or a computer chip (embedded circuit), through which electronic money can be transferred to another card without the need to link it to a central computer or any other party.
2. other. Digital money:  in which the monetary value is stored in computer disks, and is used by the personal computer of the consumer party, but it must connect its network to the international communication network.

Examples of virtual money

Common examples of virtual money include:

1. Bitcoin: Bitcoin is the first virtual digital currency; It is considered a cryptocurrency because cryptography facilitates the creation of bitcoin transactions, there are currently more than 18.5 million bitcoin tokens in circulation, against the current maximum of 21 million.
2. Bitcoin Cash:  was launched in 2017, and it is one of the most popular types of cryptocurrencies in the market. The essential difference between the original Bitcoin and Bitcoin Cash is the block size; The latter has a larger capacity, which means that Bitcoin Cash offers faster processing speeds than the original Bitcoin.
3. Litecoin: works as a method of using Bitcoin, created by Charlie Lee in 2011 AD, and was designed to improve the way Bitcoin works; In terms of shorter transaction times and lower fees.
4. Stellar: It was designed by Ripple co-founder Jed McCaleb in 2014 and is operated by a non-profit organization called Stellar.org, and aims to promote its use in developing countries that do not have access to any Conventional banks.