Editing Digital currency (section)

== Sub-types of digital currency and comparisons ==

=== Digital currency as a specific type and as a meta-group name ===
Digital currency is a term that refers to a specific type of electronic currency with specific properties. Digital currency is also a term used to include the meta-group of sub-types of digital currency, the specific meaning can only be determined within the specific legal or contextual case. Legally and technically, there already are a myriad of legal definitions of digital currency and the many digital currency sub-types.  Combining different possible properties, there exists an extensive number of implementations creating many and numerous sub-types of digital currency.  Many governmental jurisdictions have implemented their own unique definition for digital currency, virtual currency, cryptocurrency, e-money, network money, e-cash, and other types of digital currency.  Within any specific government jurisdiction, different agencies and regulators define different and often conflicting meanings for the different types of digital currency based on the specific properties of a specific currency type or sub-type.

===Digital versus virtual currency===
{{main|Virtual currency}}
A virtual currency has been defined in 2012 by the [[European Central Bank]] as "a type of unregulated, digital money, which is issued and usually controlled by its developers, and used and accepted among the members of a specific [[virtual community]]".<ref name=":2">{{Cite web|url=https://www.ecb.europa.eu/pub/pdf/other/virtualcurrencyschemes201210en.pdf|title=Virtual Currency Schemes|date=October 2012|website=ecb.europa.eu|access-date=1 February 2018}}</ref> The [[US Department of Treasury]] in 2013 defined it more tersely as "a medium of exchange that operates like a currency in some environments, but does not have all the attributes of real currency".<ref name="auditreport">{{Cite web|url=https://www.treasury.gov/about/organizational-structure/ig/Audit%20Reports%20and%20Testimonies/OIG-16-006.pdf|title=Audit Report|date=10 November 2015|website=Treasury.gov|access-date=1 February 2018}}</ref> The US Department of Treasury also stated that, "Virtual currency does not have legal-tender status in any jurisdiction."<ref name="auditreport" />

According to the [[European Central Bank]]'s 2015 "Virtual currency schemes – a further analysis" report, virtual currency is a digital representation of value, not issued by a central bank, credit institution or e-money institution, which, in some circumstances, can be used as an alternative to money.<ref>{{Cite web|url=https://www.ecb.europa.eu/pub/pdf/other/virtualcurrencyschemesen.pdf|title=Virtual currency schemes - a further analysis|date=February 2015|website=ecb.europa.eu|access-date=1 February 2018}}</ref> In the previous report of October 2012, the virtual currency was defined as a type of unregulated, digital money, which is issued and usually controlled by its developers, and used and accepted among the members of a specific virtual community.<ref name=":2" />

According to the [[Bank for International Settlements]]' November 2015 "Digital currencies" report, it is an asset represented in digital form and having some monetary characteristics.<ref>{{Cite web|url=https://www.bis.org/cpmi/publ/d137.pdf|title=Digital Currencies|date=November 2015|website=bis.org|access-date=1 February 2018}}</ref> Digital currency can be denominated to a sovereign currency and issued by the issuer responsible to redeem digital money for cash. In that case, digital currency represents electronic money (e-money). Digital currency denominated in its own units of value or with decentralized or automatic issuance will be considered as a virtual currency. As such, bitcoin is a digital currency but also a type of virtual currency. bitcoin and its alternatives are based on cryptographic algorithms, so these kinds of virtual currencies are also called cryptocurrencies.

=== Digital versus cryptocurrency ===
[[Cryptocurrency]] is a sub-type of digital currency and a digital [[asset]] that relies on [[cryptography]] to chain together [[digital signature]]s of asset transfers, [[peer-to-peer]] networking and [[decentralization]]. In some cases a [[proof-of-work]] or [[proof-of-stake]] scheme is used to create and manage the currency.<ref name="ars1">{{Cite web |url=https://arstechnica.com/business/2013/05/wary-of-bitcoin-a-guide-to-some-other-cryptocurrencies/ |title=Wary of Bitcoin? A guide to some other cryptocurrencies |work=Ars Technica |first=Ian |last=Steadman |date=May 11, 2013}}</ref><ref name="tech">[http://www.techopedia.com/definition/27531/cryptocurrency What does Cryptocurrency mean?], technopedia, 01-07-2013</ref><ref>{{Cite web |url=http://theconversation.com/from-your-wallet-to-google-wallet-your-digital-payment-options-14540 |title=From your wallet to Google Wallet: your digital payment options |work=The Conversation |date=May 21, 2013 |first=David |last=Tuffley}}</ref><ref name="beyondbitcoin">{{cite web|title=Beyond Bitcoin: A Guide to the Most Promising Cryptocurrencies|last=Liu|first=Alec|work=Vice Motherboard |url=https://www.vice.com/en/article/beyond-bitcoin-a-guide-to-the-most-promising-cryptocurrencies/ |year=2013 |url-status=live|archive-url=https://web.archive.org/web/20131224084601/http://motherboard.vice.com/blog/beyond-bitcoin-a-guide-to-the-most-promising-cryptocurrencies|archive-date=24 December 2013 |access-date=7 January 2014}}</ref> Cryptocurrencies can allow electronic money systems to be decentralized. When implemented with a blockchain, the digital ledger system or record keeping system uses [[cryptography]] to edit separate shards of database entries that are distributed across many separate servers. The first and most popular system is [[bitcoin]], a peer-to-peer electronic monetary system based on cryptography.

===Digital versus traditional currency===
Most of the traditional [[money supply]] is [[Demand deposit|bank money]] held on computers. They are considered digital currency in some cases. One could argue that our increasingly cashless society means that all currencies are becoming digital currencies, but they are not presented to us as such.<ref name="ECB">{{cite book |title=Virtual Currency Schemes |date=October 2012 |publisher=European Central Bank |location=Frankfurt am Main |isbn=978-92-899-0862-7 |page=5 |url=http://www.ecb.europa.eu/pub/pdf/other/virtualcurrencyschemes201210en.pdf |chapter=1 |archive-url=https://web.archive.org/web/20121106053452/http://www.ecb.europa.eu/pub/pdf/other/virtualcurrencyschemes201210en.pdf |archive-date=6 November 2012 |url-status=live}}</ref>