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What is Digital Currency and how it can be used in different ways

Choosing bitcoins, businessman pressing touch screen button.

Usually currency is available physical in the form of bank notes or coins which you can carry with you anywhere to make any purchase from that currency. But unlike this physical currency, there are some anonymous currencies as well and these currencies mostly fall in the category of digital currency or digital money. This digital currency provides you the same facilities as physical currency like you can make transactions and you can buy physical good and services using this digital currency but its use is not accepted by all as some companies or individuals may not accept this digital money like you can’t use this on social media payments or you can’t use this to play online games.

Idea of the digital currency was introduced in 1983 by David Chaum and he introduced a company DigiCash that allow the customers to use this service. After that few other digital currencies were introduced but none of them including DigiCash was successful until in 2008 when bitcoin was introduced and now it is the widely used digital currency as people invest in bitcoin and they are happy to trade using bitcoin.

Mostly people believes that bitcoin is a type of anonymous currency, in a sense we can say that bitcoin can be considered as anonymous currency as it is difficult to track the actual person who is making the transactions using bitcoin but it is not impossible. With blockchain it is possible to track the wallet from where money was sent and also the wallet which received that money. So bitcoin is a digital currency but it is not anonymous currency in its true sense.

There are various usages of this digital money like you can trade using bitcoin, you can buy the bitcoin and can hold it for a long period of time to wait for the right time to sell the bitcoin again to get some profit. You can also invest in bitcoin in different companies which are dealing with this digital money. You can also use this currency to play poker games where as on many freelancing websites people are providing their services with the exchange of bitcoin. Some hackers also get advantage of digital money as they believe that this is anonymous currency and they won’t be traced if they get the ransom amount in shape of digital money. But remember this is unethical way to use the money; the proper way is to buy the physical good or services using bitcoin or other anonymous or digital currencies.

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