What is virtual currency?
Virtual currency is a digital representation of value that is not issued by a central bank or government and does not have legal tender status. It is often used as a means of exchange and can be used to purchase goods and services online or in the real world.
There are many different types of virtual currencies, including cryptocurrencies, online gaming currencies, and social media credits. Cryptocurrencies, such as Bitcoin and Ethereum, are decentralized digital currencies that use cryptography and a decentralized ledger (called a blockchain) to secure and record transactions. Online gaming currencies, such as World of Warcraft gold, are used to purchase in-game items or services within online games. Social media credits, such as Facebook Credits, are used to buy virtual goods or services within social media platforms.
Virtual currencies are not the same as traditional fiat currencies, such as the US dollar or the euro, issued by central banks and backed by governments. They are also not the same as digital currencies, which are issued by central banks and can be used as a means of exchange in the same way as traditional fiat currencies.
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