With virtual currency currently trending in the world, you shouldn’t be left in the dark. Every time you go on social media you see different financial advisors telling people to go digital. Now you are wondering why you should buy Vechain or not. Well, perhaps if you understood the terms around digital currency, then maybe you will know why people are investing in it. So, this article will be focused on explaining everything basic that implies the term virtual currency.
Overview of what virtual currency stands for
Everything is becoming electronic, and so is our currency. Electronic currency can be in the form of digital, virtual, or cryptocurrency. What differentiates them is their mode of operation. Virtual currency for example is a type of electronic currency commonly found in video games or a currency given by an airline for air mileage.
One thing about the virtual currency you should know is that it can only be spent with the issuer of the currency. This means that if you are issued a virtual currency, you can’t exchange it for fiat currencies. This is a major disadvantage of virtual currency.
On top of this, they do not have the best security when it comes to electronic currency. Truly they are fast and make transactions seamless, but because they are stored on computers, and spent via software, they are susceptible to online scams and hacking.
Classification of virtual currency
Virtual currency can be classified into two main categories. The criteria used in differentiating virtual currencies is their operating network. Let’s take a closer look at the two types.
Centralized virtual currency
First, we have the centralized virtual currency, otherwise known as the closed virtual currency. This is the type of virtual currency we were talking about when we said they can’t be converted to other currencies. They are often given by a central administrator or body and can only be spent to the issuer. This type of electronic currency is very restrictive and not the best to consider investing in. Imagine investing in virtual currency in a video game, while you can spend the currency in the game, you cannot later recover your investment for real cash, making it not a wise investment.
Decentralized virtual currency
Secondly, we have the decentralized virtual currency, otherwise known as the open virtual currency. This is a more investors-like electronic currency, as it gives owners of it the convenience to exchange it for other currencies. Most decentralized virtual currencies are based on blockchain technology and authenticate the transaction with a distributed system. This means that the decentralized virtual currency is more secure than the centralized virtual currency. Examples of decentralized virtual currency include Vechain, Bitcoin, Ethereum, Cardano, Ripple and so on.
Why should you invest in virtual currencies?
If you are looking for an investment opportunity, maybe it’s time you buy Vechain. When investing in virtual currencies, it’s important to invest in the right type. As we explained earlier, there are different types of virtual currency, centralized virtual currencies are not a wise investment, but decentralized on the other hand is more investment-friendly. Here are a couple of reasons why you should consider investing in virtual currencies.
First and foremost, if you are looking for an investment opportunity, especially in the digital world, then security should be your topmost priority. And with virtual currencies, you can be sure you’d get that. Since virtual currencies operate on an open market ecosystem, they are regulated by not one person, but by the entire community. This makes the network quite secure and harder to break into.
Secondly, with virtual currencies, there are no intermediaries. What this means is that when you want to buy Vechain, you can buy it directly or send it directly to a merchant or loved ones. In other words, you don’t have to go through the long process of a middle man. Hence, transaction fees of using virtual currencies are always lower.
Easy to purchase
Lastly, virtual currencies are easy to purchase. You can buy Vechain from any of the verified exchangers available online without much fuss. All you need is to create an account, find your local bank account and buy the amount of virtual currency you need.
To sum things up, virtual currencies are digital currencies that only exist in electronic form. Note that there are different types of virtual currency. Some can be exchanged for other currency, while some can’t be exchanged. When you buy Vechain you can convert it to any other currency.