An economic dissertation on digital currency, its types & benefits

You know why writing a dissertation is a crucial part of your academics? Because it will help you to score well in your academics. Moreover, it will help you to learn various skills like research, writing and language, which are used in dissertations. While, when you write a dissertation, you must imagine what the recent trends in economics are that change the global economy. In this article, we are gonna discuss the trending topic of digital currency, which has emerged as a transformative force in the global financial system. From cryptocurrencies to central bank digital currencies, the world has witnessed a significant shift in the payment system. In this, we talk about the various digital currencies and their pros and cons. To know about them in detail, read the lower section. Moreover, if you face a problem in finding a suitable topic for your dissertation, then you can seek economics dissertation topics from experts.

What are digital currencies

You might have a question in your mind: what is a digital currency? A digital currency primarily refers to a form of currency that exists only in electronic form. In other words, it is known as 'digital money, electronic money, electronic currency or 'cybercash. This means that it has no physical form, as it cannot be stored or manipulated in any tangible way. Most consumers and businesses are required to use digital money to execute their transactions and trades. Transactions involving digital currencies are conducted using computers, electronic devices, or digital wallets connected to the internet or a designated network. Moreover, physical currencies, like banknotes and minted coins, are tangible, they have definite physical attributes. Digital currencies are made possible only when their holders have physical possession of these currencies. They also allow you to enable instant transactions that can be done across borders.

Types of digital currencies

Digital currency is an overarching term that encompasses the various types of currencies that exist in the electronic world. There are only three types of digital currencies which exist in the realm of the electronic. Just like the currencies discussed in your economics course, if you prefer to become an HR professional and want to find a good topic for your dissertation, you can find dissertation topics on human resource management. Go ahead and select your topic. To know about those currencies, read the lower section.

Cryptocurrencies

Cryptocurrencies are the newest type of currency which exists in digital form. You might have heard about Bitcoin and how people become rich with it; well, that's also a cryptocurrency. Bitcoin and Ethereum are the two significant examples of cryptocurrency. The question is why they are different from other money because the government or banks do not control them. Instead, they run on a technology called blockchain, which is like a digital ledger or bank that records their activities. People prefer them because they are much faster, cheaper and more private, meaning the government cannot check your transaction.

Virtual Currencies

Virtual currency is just like cryptocurrency; it also doesn't have any physical form and only exists in the online world. You can use them to buy any product or to send money to others, or you can invest with their help, all through digital platforms. Some of the money is centralised, meaning it is controlled by a specific company or system, while most of the others, like cryptocurrency, are decentralised and run on the blockchain. People are drawn to virtual currencies because they can be convenient, fast, and sometimes more private. However, they are much riskier, like security concerns and price volatility, mainly when used outside the regulated financial system.

Central bank currencies

The Central Bank Digital currencies are the digital currencies used by the central bank of the country. They are used as a supplement or a replacement for the traditional fiat currency. Unlike the final currency, which exists in both physical and digital forms, the CBDC exists purely in the form of digital. The use of the CBDC has been suggested to enhance the speed and security of the centralised payment system, lowering the cost and the danger of handling cash and promoting greater financial inclusion for public and firms without access to conventional banking services. They also make cross-border payments easier and lessen the need for foreign exchange.

Pros and Cons Of Digital  Currencies

In recent time, digital money is the a hotest topic all over the world, changing the way people think about money, banking and even global economics. It it's cryptocurrencies like Bitcoin or government-backed digital currencies like the central bank digital currency, these forms of money challenge the traditional laws of the financial system. On one hand, digital currencies offer the speed of transactions, lower transaction costs and greater financial access. Improvement, on the other hand, raises the concern of regulation, security and price stability. In this section of the article, we will talk about digital currencies and their pros and cons. , you will understand the pros and cons properly, and they will benefit you for your dissertation.

Advantage

1. The amount of time required for the transaction involving digital currencies is extremely fast. as the payments in digital currencies are made between the two parties without including any intermediaries.

2. The physical currency needs the money requirement, like the establishment of physical manufacturing facilities; these all are absent for the digital currencies.

3. The CBDC can help circumvent this mechanism and enable the government agency to disburse the payment directly to the citizens. They also simplify the production and distribution methods by requiring the need for manufacturing.

4. They also help in direct transactions; you can directly talk to the shopkeeper as long as you are situated in the same network.

5. Transactions with digital currencies are not associated with personal data, providing users a high level of privacy and anonymity.

Disadvantages

1. While the digital currency does not exist in reality, it still has the requirement for storage and processing.  

2. The digital provenance makes the digital currency vulnerable to hacking. The hacker can easily steal your money online.

Three digital currencies are used for the trading and can have wild price swings.

3. The online currency is still not accepted everywhere, which means payment by the retailer and other enterprises. Due to this, using them for routine transactions may seem challenging.

4. On the digital currency network, the transactions are irreversible. That means that once a transaction has been completed, it cannot be undone. In these situations, the mistake or the fraud has taken place; this may be a disadvantage of using it.

Conclusion

The trend of digital currency is increasing day by day, as people in every country prefer digital cash due to its numerous advantages. You do not need to store cash in your wallet; instead, you have the digital wallet. Moreover, it is much easier to pay with, as the transaction is much faster and easier. As you are a student of economics, you need to understand the use of digital currency and how it has become the primary medium of payment for many things. understand the various types of digital currency and how they are different from each other. Moreover, if you face any problem in your work in finding a good topic, then you can get economics dissertation topics from experts.