Short Note

Digital Currency
In a 2009 blog post, Satoshi Nakamoto used history to justify the creation of Bitcoin: ‘The root
problem with conventional currency is all the trust that's required to make it work. The central
bank must be trusted not to debase the currency, but the history of fiat currencies is full of
breaches of that trust.’

Digital money, sometimes known as digital money, is any kind of payment that is only available
electronically. Digital currency is not a physical entity like a coin or a dollar bill. Online systems
are used for accounting and transfer. The digital currency known as Bitcoin is one of the more
well-known types.
So, are cryptocurrency and digital currency the same thing?
No, not quite. Digital currency comes in a variety of forms, including cryptocurrency. While
digital technology is required to establish a cryptocurrency that can be used, cryptography is not
required to develop a money that just exists online.
Types of digital currency
Three main types of digital currencies are as follows.

Crypto A ‘crypto’ currency is one that makes use of an encrypted ledger. Rather than relying on
a central authority to secure transactions, crypto users prefer mathematical algorithms. The way
that this works takes some time to get your head around, but it’s worth the effort, as this stuff
may well represent the future of commerce. Cryptocurrencies are defined by the cryptography —
the encryption used to create the currency — rather than their digital nature. The first coin of this
type was Bitcoin, but many others have since emerged (most of which have collapsed)
Virtual The term ‘virtual currency’ came about in 2012 when the EU defined it. It’s essentially
money that’s been issued by a private organization for a particular use online. Virtual currencies
can be closed or open. Closed virtual currencies are restricted to a particular system, like the
money you might spend in an online role-playing game, like gold in World of Warcraft. Open
currencies can be exchanged for other currencies outside of a given platform. Cryptocurrencies
would be included here.
Central Bank The central bank of a given country might elect to set up its own digital currency in
order to complement or replace the existing fiat currency (traditional government-issued money).
This is called a Central Bank Digital Currency, or CBDC.

Advantages
https://qoin.world/digital-currency-news/advantages-that-digital-currency-have-over-cash/

Peer-to-Peer transactions. Fast, mobile online payments. Security. Decentralised and

autonomous. Minimal fees. Discrete and confidential.
Safer for businesses.
a digital currency for retailers that is supported by the goods and services they offer.
Disadvantages

Cryptocurrency
A cryptocurrency is a blockchain-based, cryptographically protected digital representation of
value. Cryptocurrency can be used as a store of wealth, a unit of account, and a medium of
exchange. Contrary to fiat money, the majority of cryptocurrencies are completely decentralized
and run peer-to-peer without the use of a middleman. A single entity controls the secret ledger
systems used by some cryptocurrencies. Typically, the only thing standing behind
cryptocurrencies is the trust of their users.
What are Crypto’s Cons?
 Some popular cryptocurrencies have experienced extreme price volatility, which can
limit their use and negatively impact purchasing power.
 Cryptocurrency suffers from a complex user experience, often making it confusing for
individuals to buy, sell, and hold.
 Digital assets may be susceptible to online theft, forgotten passwords, and accidental loss.
With fewer or sometimes no intermediaries, it can be even more difficult than fiat, and
often impossible, to recover.
 Cryptocurrency has properties that attract money launderers and other criminals globally.
The nature of cryptocurrency may lead to an increased risk of fraud or cyber attack.
 Because they’re not currently backed by a government, asset protection/custody or
insurance is crypto platform dependent.
 The value of cryptocurrency is generally derived from the continued willingness of
market participants to exchange fiat for cryptocurrency, which may result in the
permanent and total loss of value of a particular cryptocurrency should the market for that
cryptocurrency diminish or disappear.
 There is no assurance that persons and companies who accept cryptocurrency as payment
today will continue to do so in the future.
  Some cryptocurrencies, like Bitcoin, require mining and significant electricity input for
unit creation, which may have an adverse effect on the environment.
 Cryptocurrencies issued with a fixed number of units may be susceptible to deflation.

Briefly explain digital currency in the context of Bangladesh

Khata dkhbo

International Currency