Digital currencies differ from traditional currencies in several key aspects, particularly in decentralization, security, and transaction methods. Unlike traditional currencies, which are issued and regulated by central banks, digital currencies are typically based on blockchain technology, allowing for peer-to-peer transactions without the need for intermediaries. This decentralization enhances security and reduces the risk of fraud. Additionally, digital currencies facilitate faster transactions, often with lower fees, making them attractive for both consumers and businesses. However, they also face challenges relating to regulatory compliance, volatility, and wider acceptance in everyday transactions.