When looking at news, I believe many people cannot tell digital currency, virtual currency and cryptocurrency. In some cases, these three words may even be in one article at the same time. But, are digital currency, virtual currency and cryptocurrency one thing?
As an editor focus on crypto industry, I will share my views. In the news coverage, you can take digital currency, virtual currency and cryptocurrency as one thing. Because different institutions and individuals have different perceptions of bitcoin. For example, government departments generally accustomed to use the term virtual currency, experts and scholars accustomed to digital currency, and news reports accustomed to cryptocurrency.
But actually there is a difference between these three words. And the main difference is the definition scope.
First of all, cryptocurrency has the smallest definition scope, covered by digital currency and virtual currency. As Bitcoin is cryptocurrency, we can take Bitcoin as digital currency and virtual currency, but we cannot say that digital currency and virtual currency are the kind like Bitcoin.
Furthermore, only currencies based on blockchain technology (including Cryptography, encryption algorithm) can be called cryptocurrency. So cryptocurrency is specifically for Bitcoin, Ethereum, and a whole bunch of terms based on blockchain technology.
Digital money, as its name implies, everything can be called a digital currency as long as it is based on digital technology. For example, the game’s gold or the aforementioned bitcoin is a digital currency. But conversely, game’s gold is certainly not cryptocurrency, as it is not based on blockchain technology.
The virtual currency, it is relative to the physical currency. All invisible currency can be called a virtual currency. In theory, its scope is greater than digital currency. For example, we may create a virtual currency when we write a novel. It may have some value because of the popularity of the literature. However, it’s not digital currency or cryptocurrency.
In summary, cryptocurrency is the most accurate description to use in news and reports. To judge whether it is cryptocurrency, the general basis is to check if it is based on blockchain technology, with decentralized idea. Sometimes we may see news that some traditional businesses issued a virtual currency and announced a push into the blockchain industry. But if it is not developed based on blockchain technology, it is just a fake virtual currency then.
In addition, we often see some news that a central bank of some country plans to issue digital currency at the national level. The term “digital currency” is very accurate because the non-physical currencies issued by the central bank are basically centralized by the state, fully controlled. They are totally different from cryptocurrency like Bitcoin.
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