Digital currency refers to a form of currency that exists exclusively in electronic or digital form.

It is
intangible and does not have a physical counterpart like coins or banknotes. Digital currencies are
typically used for electronic transactions, online purchases, and as a medium of exchange in digital
ecosystems.

One prominent type of digital currency is cryptocurrency, such as Bitcoin, Ethereum, or Litecoin,
which I mentioned earlier. Cryptocurrencies are decentralized digital currencies that utilize
cryptographic technology to secure transactions and control the creation of new units. They operate
on blockchain networks, which are distributed ledgers that record all transactions across a network of
computers.

In addition to cryptocurrencies, digital currencies can also include centralized electronic currencies
issued by central banks or financial institutions. These are often referred to as central bank digital
currencies (CBDCs). CBDCs aim to provide a digital alternative to physical cash and are typically
backed by a central authority, making them more centralized compared to cryptocurrencies.

Digital currencies offer advantages such as faster and more efficient transactions, increased security,
and potential cost savings. They also enable borderless transactions and financial inclusion for
individuals who may not have access to traditional banking services.

It's important to note that the term "digital currency" can be used broadly and may encompass
various forms of electronic money or virtual currencies used for digital transactions, including both
cryptocurrencies and centrally issued digital currencies.