We still hear every day about virtual money, electronic money, cryptocurrency, Bitcoin digital currency, so how to distinguish them, and how to call it is the most accurate. Bitcoin Magazine will distinguish for you the following definitions:
What is virtual currency?
Virtual currency is a digital currency that is only available in electronic form and not in physical form. It is stored and transacted only through specified software, mobile or computer applications, or via dedicated digital wallets, and transactions occur over the Internet or over secure dedicated networks. Virtual currency is considered a subset of the group of digital currencies, which also includes cryptocurrencies.
Definition of Virtual Currency
Virtual currency can be defined as an electronic representation of monetary value that can be issued, managed and controlled by private issuers, developers or founding organizations. Such virtual currencies are often represented as tokens and can remain unregulated without a legal tender. Unlike regular money, it relies on a fiduciary system and may not be issued by a central bank or other banking regulator. Due to the lack of a centralized regulatory body, such virtual currencies are susceptible to fluctuations in their valuation. They derive their value based on the underlying mechanism, like mining in crypto cases or the backing of the underlying asset.
Where does the term Virtual Currency come from?
The term was coined around 2012, when the European Central Bank (ECB) defined virtual currency to classify digital currencies in an unregulated environment, developed and controlled by regulatory agencies. its developer and used as a method of payment between members of a particular virtual community.
Along with use by the general public, a virtual currency can be restricted in use and it can only be circulated among members of a particular online community or a group of virtual users who transact online. on dedicated networks. Virtual currencies are mostly used for peer-to-peer payments and are finding increasing uses to purchase goods and services.
Difference between digital currencies, cryptocurrencies, virtual currencies and cryptocurrencies
A digital currency is an overall superset that includes virtual money, cryptocurrencies, and cryptocurrencies.
Compared to a virtual currency, a digital currency includes a larger group of representations of monetary assets in digital form. Digital currencies can be regulated or unregulated. In the former case, it can be converted into a fiat currency (fiat money) – that is, a country’s central bank can issue a digital form of the currency note. your fiat. A virtual currency, on the other hand, is usually unregulated and thus constitutes a digital currency.
Cryptocurrencies like Bitcoin and Ethereum are considered part of the virtual currency group. A cryptocurrency that uses cryptographic technology to help keep transactions secure and authentic, and also helps manage and control the creation of new currencies. Such cryptocurrencies exist and are traded on dedicated blockchain-based networks that are open to the public. Anyone can join and start trading with cryptocurrencies.
In Vietnam, on social media, there is confusion between calling Bitcoin a virtual currency, digital currency, cryptocurrency or cryptocurrency. According to Wikipedia, they define Bitcoin as Cryptocurrency, because it is a currency encrypted with blockchain technology (Crypto currency). Cryptocurrency, digital currency is (digital currency). Virtual currency is ( virtual currency ).
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