The term "digital currency" signifies a form of money that exists solely in digital form, without a physical counterpart. It serves as a medium of exchange, utilizing cryptographic technology to secure transactions and control the creation of new units. Digital currencies, such as Bitcoin and Ethereum, are decentralized, often based on blockchain technology, and offer a way to conduct transactions over the internet without the need for traditional banking systems. They provide advantages like lower transaction fees, faster transfers, and increased privacy, impacting financial systems and how value is stored and transferred.