Browse Definitions :
Definition

digital currency

Contributor(s): Ivy Wigmore

A digital currency is a medium of exchange that is generated, stored and transferred electronically. Digital currencies are not typically associated with any country's government or represented in physical forms like the coins and notes of traditional currencies. 

Cryptocurrencies, the most common category of digital currency, are the type that comes to mind for most people when they hear the term. Cryptocurrencies rely on encryption to secure the processes involved in generating units and conducting transactions. They are used similarly to conventional money for purchases online and in person and are accepted by an increasing number of sellers.  

The first widely-adopted cryptocurrency, Bitcoin, relies on blockchain's distributed ledger model to prevent a single point of failure and to ensure that the record of transactions is tamper-proof. Most other well-known cryptocurrencies also use blockchain and the technology is being explored in many industries as a secure and cost-effective way to create and manage a distributed database and maintain records for digital transactions of all types. 

Virtual currencies, another subset of digital currencies, are mediums of monetary exchange that are confined to particular software-based environments. One of the earliest virtual currencies was the Linden dollar of Second Life

David Chaum, an American computer scientist and cryptologist, first introduced the idea of digital currencies in his 1983 research paper, "Blind signatures for untraceable payments." 

This was last updated in September 2017

Continue Reading About digital currency

Start the conversation

Send me notifications when other members comment.

Please create a username to comment.

SearchCompliance

  • risk assessment

    Risk assessment is the identification of hazards that could negatively impact an organization's ability to conduct business.

  • PCI DSS (Payment Card Industry Data Security Standard)

    The Payment Card Industry Data Security Standard (PCI DSS) is a widely accepted set of policies and procedures intended to ...

  • risk management

    Risk management is the process of identifying, assessing and controlling threats to an organization's capital and earnings.

SearchSecurity

SearchHealthIT

SearchDisasterRecovery

  • call tree

    A call tree is a layered hierarchical communication model that is used to notify specific individuals of an event and coordinate ...

  • Disaster Recovery as a Service (DRaaS)

    Disaster recovery as a service (DRaaS) is the replication and hosting of physical or virtual servers by a third party to provide ...

  • cloud disaster recovery (cloud DR)

    Cloud disaster recovery (cloud DR) is a combination of strategies and services intended to back up data, applications and other ...

SearchStorage

  • RAM (Random Access Memory)

    RAM (Random Access Memory) is the hardware in a computing device where the operating system (OS), application programs and data ...

  • business impact analysis (BIA)

    Business impact analysis (BIA) is a systematic process to determine and evaluate the potential effects of an interruption to ...

  • M.2 SSD

    An M.2 SSD is a solid-state drive that is used in internally mounted storage expansion cards of a small form factor.

Close