What is virtual currency and cryptocurrency that confuses many people
Cryptocurrencies or virtual currencies are built on a computer system or network of an organization or individual. All terms related to cryptocurrencies or virtual currencies are in the same general concept as Digital Currency.
The concept of cryptocurrency divides into different categories and each has a distinct attribute that makes up the value of the coin:
According to Investopedia, crypto currency is a compound word of cryptography and currency. This is a cryptocurrency secured by encryption techniques based on the power of computers combined with the Internet. This technology is collectively known as blockchain – the foundation of cryptocurrencies.
Cryptocurrencies operate in an open ecosystem and can be converted to other currencies. Cryptocurrencies are issued by organizations or individuals, but they do not have the right to control the entire amount of money but are managed by the community itself through the encryption mechanism, decentralization in the system. Popular cryptocurrencies such as Bitcoin, Ethereum, etc.
Fiat money is the most commonly used cryptocurrency, but many people confuse its definition with virtual money and cryptocurrencies. According to the European Central Bank (ECB), the currency is the equivalent of a national currency, issued by currency issuers but in an electronic, digital form.
Representative with typical legal electronic money such as money in a recognized bank account in Vietnam, or money in a recognized e-wallet like Momo, Viettel Pay,…
According to Investopedia, virtual currency (Virtual Currency) is widely known from games and appeared before the term cryptocurrency. Virtual currency is issued internally by organizations and companies and they have full control over this amount. Virtual currencies are not or are very limited to fiat currencies and are only exchanged within a small community.
Representing typical virtual currency such as money used in the game to buy and sell items, promotion money at shopping platforms, etc.
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