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What does digital currency mean? (What currency does digital currency belong to?)

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What does digital currency mean? According to its English meaning, digital curre

What does digital currency mean? (What currency does digital currency belong to?)

What does digital currency mean? According to its English meaning, digital currency is cryptocurrency.

In the definition of Bitcoin, digital currency is divided into four types: fiat currency, cash, and virtual gold. There are three types of fiat currency: legal tender (fiat yuan), virtual currency (cryptographic assets), and virtual assets. Among them, fiat currency is a means of value storage; virtual currency is a medium of exchange; and another type provides a unit of account for virtual assets. However, digital currency is not a real currency because it does not have physical support for circulation, but rather realizes its price and links to the real world through blockchain technology, which makes it more convenient to use and also helps improve the risk management capabilities of investors. (Translated into English, it can be understood as “Renminbi”).

What currency does digital currency belong to?

In finance, we all know that digital currency is a tool for value storage, generally issued by a country. However, for many investors, they do not understand what this concept itself is. Therefore, some investment methods have emerged. For example, buying stocks, bonds, and futures contracts. But in fact, these are assets with high risks.

So when you want to buy a digital RMB, you must consider whether it can operate stably and whether its price can continue to rise in the long term. Because Bitcoin does not have a fixed timestamp or network effect, it cannot operate effectively, while other currencies can be traded in the same way. So why use Bitcoin? It is because the price volatility of these two tokens is too high and they are not suitable for ordinary people to use in their daily lives, and they cannot be used for speculation or even to avoid the economic losses caused by fiat currency.

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