When talking about cryptocurrencies, the term Bitcoin probably quickly comes to mind. But you may not know exactly what makes a Bitcoin (or other digital currencies such as Ethereum, Ripple, Litecoin, etc...) a cryptocurrency and what type of virtual money exists.
Not all digital money is cryptocurrency, but these have their own characteristics that define them. In fact, the terms "cryptocurrency" and "digital money" are used interchangeably to refer to the same thing, when in reality there are important differences between them.
Differences between cryptocurrencies and digital currencies
It is necessary to properly understand both concepts:
-Digital money: Digital money refers to any currency that only exists digitally; That is, it does not have any type of physical representation, such as a bill.
Cryptocurrencies and any other means of digital exchange would fall within this section, even if they are not based on the blockchain, whether regulated or not. We also find here the "money" used by certain virtual communities, such as currencies within an online game.
In short, digital money is a common term to refer to any type of currency that exists only online.
-Cryptocurrencies: “Crypto” refers to the large number of encryption algorithms and cryptographic techniques used to ensure the security of cryptocurrencies and the network on which they operate. Cryptocurrencies are decentralized and work using a blockchain network, so they don't need a body like a bank or a state for anything.
The security of cryptocurrencies is above all relative to their inability to be copied or counterfeited. But there are still many dangers for this type of currency. A failure in a computer on which these currencies are stored can erase them, the loss of a key can make them inaccessible and hacks are the order of the day.
Although Bitcoin is the best known, there are thousands more, each with its own characteristics. Still, almost all of them share some common attributes: volatile prices, difficulty in tracking them, and anonymity.
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