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ORIGIN OF DIGITAL CURRENCY
In 1983, a man named 'DAVID CHAUM' introduced the idea of digital cash. He was the founder of DigiCash as an electronic cash company, it was now created in the year 1990.
Introduction
Currency in order words means money while digital means electronics.
Digital currency is regarded to any forms of payment, medium of exchange that is generated in a purely electronic form i.e. all monetary transaction that takes place through an online system and it is not tangible. It is otherwise called electronic currency or cybercash. Digital currency can only be accessed with the use of mobile phones or computers because they only exist in an electronic medium and has no physical attributes.
China is among the pioneers in digital currency field. They made a huge effort in exploring their potentials to create their own digital currency which they succeeded in the year 2014. They launched their CBDC(Central Bank Digital Currency) in the year 2020 which is known as the 'Digital Yuan' or the E-CNY.
In Nigeria, the E-Naira was invented on 8th October 2021 by the Fintech Company which based in the Caribbean. It was introduced in order to advance the payment system to make transactions easier for every citizen of the country and equally non citcitizens.
Reason for creating digital currency
Digital currency was created in order to carry out financial transactions without the awareness of banks or government. Anyone can create digital currency but the challenging part of it is how to make it grow and maintain it value.
Features of Digital Currency
There are many features of digital currency but I will like to discuss some of it which are as follows:-
- Digital currencies are unregulated and only exist in digital or an electronic form.
- They can be used, issued or accepted electronically among the members of a specific virtual or private organisations or groups.
- They can be regulated or unregulated but only available in a digital form.
Advantages of Digital Currency
a. They have fast transaction speed and time.
b. They have lower transaction costs or minimal.
c. It is easy to implement fiscal and monetary policy.
d. It do not require any physical manufacturing.
e. It maintains privacy and keep confidence than any other forms of currency and are more secure.
NOTE Digital Currencies can be stolen, therefore, beware of it because Malwarebytes can steal your cryptocurrencies once they have access to your private keys to your bitcoin wallet, the remote server will be cracked allowing the cryptocurrencies to be stolen, therefore, protect your private keys.
TYPES OF DIGITAL CURRENCY
I will be taking only 3 types of digital currency which are as follows:- - Cryptocurrency
- Virtual currency
- Central Bank Currency
Cryptocurrency These are form of digital currency that uses cryptography (a computational and mathematical way of encrypting and decrypting data in order to secure it only for the recipient) to manage it's transactions. There are some digital currency that does not use cryptography to secure it transactions.
Bitcoin was the first cryptocurrency invented in tthe year 2009 by a computer programmer named 'NAKAMOTO SATOSHI'. He was born on 8th April 1975. He designed the original Bitcoin in the year 2008 and launched it in 2009. The owners of Bitcoin has not been directly identified, but every transactions on the blockchain are public.Bitcoin can not be mined on it own but mines only when miners or networked computers carry out transactions in exchange for payments in Bitcoin, then new Bitcoin is produced.
NOTE All cryptocurrencies are digital currency but not all digital currencies are cryptocurrency.
In Africa, countries such as Nigeria, Kenya, Zimbabwe, Ghana, South Africa are using the cryptocurrencies.
In the future, money may be replaced with digital currencies such as Cryptocurrencies, Central Bank Digital Currencies(CBDC,s), Stable coins, and other electronic payment system.