From what most people define, when we talk about currency, this is a generally accepted form of money, this can be paper notes, coins, which is naturally issued by the government and then circulated in the economy.
Cryptocurrency on the other hand is not that different from tokens. These tokens are issued by enthusiastic developers and someone in the community bought it (or received it for something in return) and can obviously trade them, then it becomes a cryptocurrency.
But, these tokens are more than just a cryptocurrency. They can be used in some cases in the operation of smart contracts in the network that accepts the specific token. Let us say for instance, BAT or the Basic Attention Tokens are used in advertising related service. This means that BAT value are useful for those who want to increase their engagement and will buy this type of token.
So therefore, cryptocurrencies helps the transfer of value in the community that accepts it and function as what a physical money does, as token this can be used for some cases in the blockchain.
What is the difference between cryptocurrency and digital currency? Are they both same?
Like US dollar and most currencies in the world would qualify as a digital currency. Because only a little of them exist as a physical bills. When the community is talking about them “creating” more money. What they just actually did was to ad numbers in the system.
A cryptocurrency is extremely secured cryptography, in which dollars are secured by, nothing really. Governments and banks can make money when they feel like making one, and rules should be applied on the amount of funds to be created, but in reality of life, there’s no limit at all.
As holder, you need to trust entities to transfer digital currency any time using your WU, Wire transfer, debit card, check, money-gram or just anything other than cash. They can manipulate or stop your transfer, or take your money, or fail to deliver if they feel like the transaction was incompetent.
A cryptocurrency uses a cryptography in order secure every transfers so the function of third party will not be needed anymore, because transfer can be directly send to the receiver without any interception from other.