What are cryptocurrencies, and how is technology driving the world towards their use and adoption?

Despite more than ten years since the release of digital currencies in the world, they are still one of the most debated issues between governments and investors, especially since some confuse digital currencies with cryptocurrencies.

Digital currencies are a collection of virtual currencies, and cryptocurrencies use blockchain technology. They can only be accessed through computers or mobile phones because they exist only in electronic form.

If a digital currency is issued by the central bank of a specific country in an organized manner, it is called a central bank digital currency (CBDC). It also carries a serial number like paper banknotes to distinguish each unit of the central bank's digital currency to prevent counterfeiting.

What are cryptocurrencies?

Cryptocurrencies, on the other hand, are another form of digital currency that is not regulated. They are obtained through cryptographic mining, which involves solving complex accounting equations using advanced computer devices. They are not issued by any central authority, and some consider them immune to government intervention or manipulation. Some also view them as a hedge against inflation.

Some of the important countries working on issuing their own digital currencies include the United States, China, England, Sweden, the United Arab Emirates, and the Eurozone.

Technology is driving the world towards digital currencies.

With increasing tensions between China and the United States, the European Union is working hard to issue its own digital currency to protect its economy from falling prey to the dominance of the two global powers in digital payment tools.

Christine Lagarde, the President of the European Central Bank, said that the entry of major technology companies in the United States and China into the digital currency payment system could subject Europe to the control of one of the two countries. She pointed out that all the foreign digital currencies used in Europe are headquartered outside the continent, such as the American Mastercard, Visa, PayPal, the Chinese AliPay and UnionPay. This means that in the event of a crisis, Europe may find itself unable to compete and purchase the necessary technology for its production.

The growing use of digital currency payments within the technology markets, especially in America and China, has increased the risk of a technological paralysis that could affect global factories if the conflict escalates to mutual sanctions affecting established currency payment methods, such as the recent crisis between the dollar and the ruble.

How do digital currencies work?

Digital currencies are electronic versions of paper banknotes and metal coins, serving as complements to paper currencies and guaranteed by the central bank. They do not enter the realm of cryptocurrency speculation like Bitcoin, and their value is determined in dollars.

Regarding payment and deposit operations, for the first time, individuals will be allowed to make direct deposits with banks, individuals and companies will be able to make daily payments in a fast, easy, and secure manner.

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_{Image source: Generated by AI Midjourney
Prompt: Crypto and Technology --ar 16:9 --q 2 --s 750 --v 5.1}