DISTINGUISH CRYPTOCURRENCY AND VIRTUAL CURRENCY

10 Jan

DISTINGUISH CRYPTOCURRENCY AND VIRTUAL CURRENCY

Basic Knowledge, Instruction

Like their different names, Cryptocurrency and virtual currency have different meanings and aspects. This article will help you distinguish them to identify every type of currency.  

What is Cryptocurrency?

Cryptocurrency is a digital currency that was created by complicated encryption algorithms in the form of open- source softwares. Cryptocurrency is transacted through internet-connected devices without intervention of any organization or country.

At the moment, there are thousands of Cryptocurrency ( known as Altcoins different from Bitcoin) that were created by different algorithms. Bitcoin is the first example. Other examples are currencies with high value that are accepted as a payment currency in the market such as:  ETH, ETC, LTC, DOGE, DASH…

Thousands of Cryptocurrency in the worldThousands of Cryptocurrency in the world

Cryptocurrency is considered real money because it has some essential factors:

– It is accepted and used for payments, commodities, service exchanges.

– It has very high liquidity. The transferation of Cryptocurrency to other types of money is quick and convenient.

– The issue of Cryptocurrency follows rules to prevent the over-issue that will cause inflation.

Some countries like China now have intention to issue their own Cryptocurrency

Recently, many countries and organizations like: EU, Germany, Japan, switzerland and some companies like: Dell, Microsoft, Apple…have recognized Cryptocurrencies as a currency to pay for commodities, services.

Therefore, Cryptocurrency is a type of currency. Owning this money is owning real assets. Cryptocurrency is the essential trend in the progress of currency and technology’s evolution. In the recent time, many people catching the trend have owned this type of money that will be great assets in the near future.

What is virtual currency?

There are 3 ways to understand Virtual currency: It is:

  • The currency that can not be handled, does not have any shapes, is used in digital environment.  
  • The currency does not have real value, is not guaranteed by cash, gold, and other assets.
  • The currency that is used to purchase stuff in video games; each game has its own currency that can not be exchanged or used to buy other products, services.

The concept “Virtual currency” is commonly understood as the third definition. With this currency, the money is easily managed and changed by issuing organizations without any influence on finance or economy.

Examples of virtual currency that is used in games

In the game “fish shooting”, 2.500 VND is worth 1 coin (equivalent to 5 points) in some places, but in other places, 1 coin is equivalent to 10 points, or 50 points in some machines. These points are virtual currency which can be exchanged into cash or money to buy products.

Considering Bitcoin a virtual currency is a huge mistake

Thus, according to that definition, we can conclude that Bitcoin and other coins which are transacted on exchanges in the world now are not virtual currency. Japanese people now can use Bitcoin for their daily payments.  In the near future, you may use coins to buy plane tickets instead of cash as usual; advertisers will pay for celebrities with these coins. And they can use them to buy food and beverage at KFC, McDonald, Starbuck, … or book rooms at Airbnb

There has been a big mistake over many years that reporters on the national chanel VTV have still called Bitcoin or other coins virtual currency with the result that most Vietnamese consider Bitcoin virtual currency which should not  be approached.

So what kind of money are Bitcoin and other coins listed on the website coinmarketcap.com? The answer is they are called Cryptocurrency. There is also a fact that many Vietnamese people do not know that in the West, several universities now have specialized Cryptocurrency master’s programs.  

In conclusion, Cryptocurrency is not virtual money that does not have any real value. Readers should have basic knowledge to not be confused of these two types of money.

 

5 (100%) 1 vote

0 Comment

Would you like to join the discussion? Feel free to contribute!

Write a Reply or Comment