What types of digital currencies are there?

Diverse types of digital currencies: Bitcoin as the first cryptocurrency, Ethereum provides a platform for building decentralized applications, stablecoins are linked to stable assets, utility tokens provide specific services, and governance tokens participate Decision, central bank digital currency as a digital alternative to fiat currency.

Types of digital currency

Digital currency, also known as cryptocurrency, is a type of currency that uses encryption technology to secure Secure digital assets. They can come in many types, each with its own unique characteristics:

1. Bitcoin:

• The first digital currency created.
• Decentralized and not controlled by any government or financial institution.
• Supply is limited, only 21 million units.
• Mainly used for investment and storage of value.

2. Ethereum:

• In addition to digital currency functions, it also provides a platform to build decentralized applications.
• Use "Ethereum" as its native token.
• Widely used in smart contracts, decentralized finance (DeFi) and non-fungible tokens (NFT).

3. Stablecoin:

• is linked to stable assets such as fiat currency or gold and aims to maintain a stable value.
• Used as a store of value and medium of exchange.
• Main types include Tether (USDT), USD Coin (USDC) and Binance USD (BUSD).

4. Utility tokens:

• Tokens that provide specific services, such as accessing the platform, exchanging goods, or participating in network governance.
• Not necessarily for investment or store of value.
• For example, Filecoin (FIL) is used for decentralized file storage, and BAT (BAT) is used for blockchain-based advertising.

5. Governance Token:

• Allows holders to participate in the decision-making of the distributed system.
• Typically used in decentralized autonomous organizations (DAOs) and blockchain protocols.
• For example, Uniswap (UNI) and Aave (AAVE) are Ethereum-based DeFi protocols whose governance tokens allow holders to vote on the future development of the protocol.

6. Central Bank Digital Currency (CBDC):

• A digital currency issued by a central bank.
• Aims to provide a digital alternative to fiat currency.
• Still in the development stage, but has the potential to improve cross-border payments and increase financial inclusion.

The above is the detailed content of What types of digital currencies are there?. For more information, please follow other related articles on the PHP Chinese website!