What is Virtual Currency?
Virtual money is an unregulated digital currency that can only be used in electronic form. The software is stored and transacted through mobile or computer applications or private digital wallets, and transactions are conducted over the internet through secure, private networks. Virtual currency is considered a subset of the digital currency group, which also includes cryptocurrencies that are on the
blockchain
bond. Virtual currency is defined in a report published by the European Central Bank in 2012 as “a virtual representation of an asset that has not been issued by any credit institution or e-money institution and in some cases can be used as an alternative to money.” The concept of virtual money has managed to attract the attention of the information and finance world since the period of its emergence. Virtual currencies have emerged as an alternative solution to the shortcomings of existing means of payment and have become increasingly preferable. What makes virtual currencies so important is the distributed ledger technology that forms their infrastructure.
What are the Advantages of Virtual Money?
There is no time limit for the transfer of virtual funds. Therefore, trading can be done at any time of the day. Another advantage is that there is no space limitation. In traditional systems, the intermediary is usually the bank and money-related transactions can be made in the areas where the bank is located, but there is no need for space in virtual currencies and payment transactions are carried out from all over the world. There is no intermediary in virtual currencies. In addition, virtual currencies are quite fast compared to classical methods. Besides, it is very easy to carry and store these coins. These currencies are not affected by the economic situation of the countries. To illustrate;
Bitcoin
will be produced with a maximum of 21 million units and
Ethereum
with a maximum of 18 million units. It is known that this situation will not lead to inflation. On the other hand, there is no lower limit on virtual currencies, in which case it is possible to make even very small payments in transactions. In addition to all this, the fact that many costs such as commission, transaction, security and account fees are not available in these virtual currencies is seen as an advantage for many users.
What are the Types of Virtual Money?
Closed Virtual Currencies : Such currencies generally have no connection to the real economy. It is only used to purchase products and services in a particular virtual environment, so these currencies cannot be bought and sold outside the virtual environment. The most typical example is virtual currencies specific to online gaming platforms.
One-Way Virtual Currencies: Virtual currencies of this type can be purchased at a certain rate in exchange for fiat currency; however, it is not possible to purchase fiat currency for virtual currency. An example of this currency is Facebook Credit.
Two-way virtual currencies: Users can buy and sell these virtual currencies at a certain rate in exchange for their fiat currency. Such virtual currencies can be used for the purchase of both virtual and real goods and services. Bitcoin is an example of a two-way virtual currency.
The Difference Between Digital Money, Virtual Money and Cryptocurrencies
Compared to cryptocurrency and virtual money, digital money encompasses a larger group of monetary assets that represent them in digital form. Digital currency may or may not be regulated. In the first case, it can be converted into an independent currency – that is, the central bank of a country can issue a digital form of fiat banknotes. On the other hand, a virtual currency usually remains unregulated and therefore forms a type of digital currency.
Bitcoin is the first virtual currency, and cryptocurrencies such as Bitcoin, Ethereum are considered part of the virtual currency group. A cryptocurrency uses cryptography technology that keeps its transactions trustworthy and also helps manage and control the creation of new currencies. Such cryptocurrencies exist and are transacted through public, private blockchain-based networks. Anyone can join in and start trading cryptocurrencies.
You can get virtual money immediately by creating a free account on ICRYPEX
and topping up your Icrypex account 24/7 via internet banking. With the support of our virtual money investment expert staff, you can evaluate your savings with virtual currencies by making the right decision in your virtual money investments.
