What is digital currency? The concept of digital currency is very broad. The Bank of England believes that digital currency is a means of payment that exists only in electronic form. It is further divided into digital currency issued by the central bank, which is issued by the central bank and represented by an encrypted digital string representing a specific amount form of legal tender.

It is not a physical entity itself, nor does it take a physical entity as a carrier, but digital information is used for network investment, transaction, and storage, representing a certain amount of value.

Privately-issued digital currency, also known as virtual currency, is a digital currency issued and controlled by developers, not regulated by the government, and circulated among members of a virtual community, such as bitcoin. Simply put, digital currency is similar to traditional currency and can be used to purchase physical goods and services.

Digital currency is a payment tool and money in a wallet. The biggest advantage of digital currency is that it can be paid offline. Even under the condition of no network, you can also trade or transfer money, and you can complete the payment by taking out the mobile phone and "touching" and shaking it.

The digital renminbi is different from other transaction currencies that are anonymous and untraceable. The digital renminbi adopts a controllable anonymity mechanism.

The People's Bank of China has full information and can use technologies such as big data and artificial intelligence to analyze transaction data and capital flows, prevent and combat money laundering, terrorist financing, tax evasion, and other illegal and criminal acts, and effectively maintain financial stability.

Although there are thousands of digital cryptocurrencies, in fact, they can be classified into six types at present.

They are:

1. Bitcoin

In the cryptocurrency circle, only Bitcoin is the only real cryptocurrency. Other cryptocurrencies, including Ethereum, may have their end of life. And Bitcoin doesn't.

2. Public chain technology currency

Technical public chain currency, the representative currency is ETH, DOT, ADA, ATOM, TRX, and EOS. Just like the fiat currencies of various countries are backed by their country's economy to maintain their value. The value of these public chain coins is guaranteed by its public chain.

3. Exchange platform currency

Exchange platform currency, literally, this currency is related to the exchange. The more famous ones are BNB, HT, OKB, etc. These three currencies also correspond to Binance, Huobi, and OKEX.

4. Stablecoins

Stablecoins, as the name suggests: have stable prices with very little volatility.

This includes pledged stablecoins and algorithmic stablecoins

5. DEFI-related coins

DEFI and CEFI are corresponding. DE is decentralized, and CE is centralized. FI is finance.

DEFI is decentralized finance.

6 Innovation Coins

The current innovation coins mainly have the following directions: the decentralized transplantation and implementation of financial derivatives, the post-era NFT, and the old tree sprouting.

For the decentralized transplantation of financial derivatives, including lending, insurance, decentralized funds, etc. This part coincides with DEFI.