Around 13% of people claim to know very little about cryptocurrency. The simplest way to explain cryptocurrency is that it’s a form of digital currency. In other words, it’s not tangible money.
But cryptocurrency isn’t the only form of digital currency. Instead, there are two main types: virtual currency vs. cryptocurrency. While these are both digital currencies, they’re not the same.
So, what’s the difference?
Keep reading this guide to learn more about both forms of currency and their differences.
What Is Virtual Currency?
In this virtual currency guide, you’ll learn a few basic principles about virtual currency. The first thing to understand is that it’s not money that banks issue. Instead, you purchase it from private issuers.
You can purchase virtual currency with real money to spend at places that accept it. However, the places that accept virtual currency are limited. So you can’t use virtual currency everywhere.
An example of virtual currency is a game you play that requires you to buy money for that game. This money is a virtual currency that has value on that game but no value anywhere else.
However, you could potentially sell your game money to someone else that plays that game and is willing to pay for it, but this rarely occurs.
Another thing to understand is that virtual currency is a highly unregulated market. Therefore, there is a risk in buying virtual currency. However, where there is a risk, there is also the potential for reward.
You can make a profit if you can sell your virtual currency for a higher price than you paid.
What Is Cryptocurrency?
Cryptocurrency is a form of virtual currency, and there are several popular types that most people have heard of. For example, Bitcoin is one cryptocurrency that many recognize.
However, even if you recognize the name, you might not know what it is. Cryptocurrency is also a highly unregulated market, but it’s traceable.
There is a record of the purchaser of the cryptocurrency and a record of how they spent the money. But you can purchase other forms of cryptocurrency that is slightly more discreet.
People use cryptocurrency as an investment. For example, you can earn a profit if you purchase it at a low price and sell it high. People also use cryptocurrency in online casino transactions.
The price of cryptocurrency depends on the supply and demand for a particular type.
So, virtual currency is a general term for all intangible currency, while cryptocurrency refers to a specific type of virtual currency.
One of the best ways to learn more about digital currency is by using it. You might start by purchasing some and using it to see how it works. Once you get the hang of it, you’ll understand more features it offers.
Learn How to Purchase and Use Digital Currency
After reading this guide, you might understand the basic differences between virtual currency vs. cryptocurrency. You can research both options more to learn about purchasing and using either type.
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