Digital Currencies vs. Cryptocurrencies, Explained

What are the core differences between the two?

Though cryptocurrency is a type of digital currency, there are some fundamental differences.

Structure. Digital currencies are centralized; there is a group of people and computers that regulates the state of the transactions in the network. Cryptocurrencies are decentralized, and  the regulations are made by the majority of the community.

Anonymity. Digital currencies require user identification. You’ll need to upload a photo of yourself and some documents issued by the public authorities. Buying, investing and any other processes with cryptocurrencies do not need require any of that. Nevertheless, cryptocurrencies are not fully anonymous. Though the addresses don’t contain any confidential information such as name, residential address, etc., each transaction is registered, the senders and the receivers are publicly known. Thus, all the transactions are tracked.

Transparency. Digital currencies are not transparent. You cannot choose the address of the wallet and see all the money transfers. This information is confidential. Cryptocurrencies are transparent. Everyone can see any transactions of any user, since all the revenue streams are placed in a public chain…

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