HOW ARE ELECTRONIC MONEY, VIRTUAL MONEY AND CRYPTOCURRENCY DIFFERENT?

In recent years, electronic money, virtual currency, and cryptocurrency have gradually become familiar and attracted the attention of many investors. However, the concept of these three types of money is still very vague and easy to confuse for newbies. So, let’s find out how electronic money, virtual currency, and cryptocurrency are different through the article below!

The differences between electric money, virtual money, and cryptocurrency

What Is Electronic Money?

Electronic money are digitized forms of fiat money, which is issued by the government. Although fiat money exists in an unhandled digital form, it has the same value as physical fiat currency (cash). In other words, electronic money is cash existing in digital form.

There are four main features that characterize electronic money:

• Electronic money is fiat currency or money recognized by law.
• Be managed and approved by the state bank or may be issued by another non-banking organization. These organizations are tightly regulated and licensed to ensure the safety of users.
• Electronic money is guaranteed by central banks. For non-banking organizations, electronic money will be secured by escrow deposits in the banking system.
• Electronic money is stored in software-based products such as PayPal wallets and in hardware-based products such as chip cards or chip-embedded smartphones.

Advantages of Electronic currency:

• All you need is a smartphone with an internet connection to complete transactions quickly and wherever you are.
• The transaction fees are low and the speed is extremely fast. It only takes a few minutes or even seconds for a successful transaction.
• Thanks to encryption technology and procedures to verify customer information, the transaction process is secure, safe, and transparent.

Disadvantages of Electronic currency:

• Contrary to cash, which just has to be supplied directly, trading in electronic money requires necessary devices such as smartphones or laptops and all have to be connected to the internet.
• There will be risks of hackers or online fraud criminals. It can be difficult to use for those who are just starting or have little experience with technology.

Electronic currency illustration

What Is Virtual Currencies?

Virtual currency is a type of electronic money that is issued by a person or organization. It is only accepted within a virtual community. Besides, it is not protected by law and is not issued or controlled by any central banks.

Examples of virtual currencies include Bitcoin, Ethereum, Litecoin and XRP. Virtual currency exists in digital form and is used in the system (e.g. games), and virtual money is not limited in quantity.

Features of virtual currency:

• Virtual currency is not used in the real world, so it cannot be converted to fiat currency or guaranteed by the central bank.
• The operation range of virtual currency is quite narrow. It is only used in a particular community, for example in online games.
• Virtual currency has more characteristics of an exchangeable commodity than a currency.

Benefits of virtual money:

Transactions are faster without intermediaries and costs are lower. In particular, there are no production costs because this is virtual money.

The drawbacks of virtual money:

Virtual money constantly rises and falls and sometimes even loses value. Because it is a virtual currency, it doesn’t have to follow any rules. As a result, this leads not to be controlled and safe. Many hackers and criminals can get in with ease.

Because virtual money is not controlled by any organization, there are always threats to users when investing in virtual currencies.

• Since the value of virtual currencies is so unstable, there are frequent changes in price and even devaluations. Therefore, it is challenging for investors to predict the situation.
• Virtual money is an attractive target for scammers. There have been many cases of account hacking or being tricked into taking part in fraudulent investment agreements.

In 2014, one of the largest digital currency exchanges in the world was knocked down by hackers and lost nearly 500 million USD. This is considered one of the most significant market crises for digital currencies at that time.

The drawbacks of virtual money

What Is Cryptocurrency?

Cryptocurrencies are currencies that are completely traded on the Internet. It uses complex cryptographic technology to secure and verify currency transactions. This technology is known as blockchain, which serves as the foundation of cryptocurrencies.

Cryptocurrencies are not currently managed by any individual or organization. It is secured by a variety of techniques and encryption algorithms, so it is hard to forge and extremely safe. Since there are not any intermediaries, transactions can be done directly at extremely low costs.

Positive aspects of cryptocurrencies:

The profit potential is enormous. In 2016, 1 bitcoin was worth 1000 USD but after only 1 year, the price of bitcoin suddenly increased 20 times in 2017, and 1 bitcoin costs up to 20,000 USD. This is also the period when bitcoin is known to the whole world and a lot of people are involved in investing. Besides, the transaction cost of cryptocurrencies is extremely cheap and the speed is incredibly fast whether domestically or internationally.

Negative aspects of cryptocurrencies:

Similar to virtual currencies, cryptocurrencies experience continual value fluctuations and are frequently the target of money laundering scams and illegal trading on the internet.

Although the blockchain system is highly secure, other crypto-currency repositories such as exchanges and wallets can still be hacked. In addition, nobody can assist you if you lose or forget your password or confirmation to access crypto.

Negative aspects of cryptocurrencies

There are many cryptocurrencies on the marketplace today. The TOP 10 most famous cryptocurrencies are:

1. Bitcoin (BTC): This is the world’s first cryptocurrency. Currently, the top price for a single Bitcoin has increased to around 41,000 USD (approximately 9650 million VND).
2. Ethereum (ETH): Ethereum comes in second to Bitcoin. This is a cryptocurrency built on smart contracts to facilitate online contracts.
3. Binance Coin (BNB)
4. Tether (USDT)
5. Solana (SOL)
6. Cardano (ADA)
7. USD Coin (USDC)
8. XRP (XRP)
9. Terra (LUNA)
10. Polkadot (DOT)

The above article has helped you to know how to distinguish electronic money, virtual currencies and cryptocurrencies. Besides, there are some of the most famous and worth investing in cryptocurrencies today. The most important thing is that you must understand the background and nature of them so that you can make intelligent use of them. Hope you will succeed in investing and thanks for following this post.

— — — — — — — — — — —

🐌 Snailhouse — Moving Forward Everyday

Make sure your understanding of NFTs!

👉Visit our:

🚀 Website: https://snailhouse.io/

🚀 Facebook: https://www.facebook.com/Snailhouse.official

🚀 Facebook Group: https://www.facebook.com/groups/715780673169929

🚀 Twitter: https://twitter.com/Snailhouse_io

🚀 Instagram: https://www.instagram.com/snailhouse_io/

🚀 YouTube: https://www.youtube.com/channel/UCVd-tNMW7gJexccZ2jjHKFQ

🚀 Telegram: https://t.me/SnailHouse_market

🚀 Discord: https://discord.gg/QJj8XzJFhG

🚀 Medium: https://medium.com/@snailhouse.official

.

#Snailhouse #NFT #NFTs #DigitalArt #NFTcommunity #NFTnews #NFTgiveaways #Crypto #BTC #ETH #art #artwork #NFTcollection #NFTgame #NFTArtist #Drop #Dropchallenge #DropNFT #Metamask