What is the virtual currency, its advantages and disadvantages

Virtual money, crypto currency, bitcoins arenot just a seemingly doubtful earnings, but also our near future. Already today, the Central Bank of the Russian Federation has started work on creating a virtual national currency. However, about everything in order.

What is Virtual Currency?

Virtual (game) money, crypto currency - digital means of payment, which are used to calculate in virtual stores, as well as in social networks and online games for acquisition:

• special gift-pictures, stickers, increase in rating;
• a certain status on the site or in the game, as well as expanding its user capabilities;
• artifacts, weapons, characters, equipment, "lives" in the game, etc.

Already in 2009, the gaming portal Zynga reported that only this year he bought virtual money and similar goods for a total of $ 100 million.

In the report "Schemes kriptodeneg" (2012)) Of the European Central Bank, virtual currency is treated as a kind of unregulated digital means of payment created by the state, created and controlled by developers and accepted by members of a certain virtual community.

FinCEN (Financial Crimes Commission) of the US Treasury under the Law "On Bank Secrecy" gives the following differences between the crypto currency and real money:

• is not a legal means of payment;
• in most cases does not apply;
• is convertible if it has an equivalent in real money.

Advantages of Virtual Money

Virtual currency has a significant number of advantages over the usual means of payment:

• Convertibility. To transfer a certain amount from one crypto currency to another is a simple and fast process that you can do in your smartphone without taking your time off. Even without thinking about the commission.
• Security. It is almost impossible for an electronic currencyto forge, because it is protected by a rather sophisticated digital cipher. If the user complies with all registration rules, even an experienced hacker will not be able to crack the electronic wallet account in the payment system.
• Availability. Electronic systems, unlike banks,function round the clock. And instantly to translate through them the most various sums of money it is possible both to the neighbor, and to the person who is on other side of globe.
• Rapidity. Transfers of electronic money are made almost instantaneously, regardless of the amount and distance of the addressee from you. However, they are not accompanied by any fees and commissions.

Risks of virtual currencies

At the same time, the list of obvious disadvantages of electronic money is quite extensive:

• For financial systems of states:
  • probability of terrorist financing;
  • "laundering of money;
  • risk of committing financial crimes;
  • it is possible to use it as a means of calculating the sale of prohibited goods.
• For owners of electronic wallets:
  • Unprofitable courses when converting into real money;
  • fraud in conversion operations;
  • probability of breaking an electronic wallet;
  • inaccessibility of the account-purse in case of loss of the secret digital key to it, PIN-code, etc .;
  • loss of savings due to the bankruptcy of the exchange site;
  • instability of the course of the crypto currency;
  • a small number of stores ready to accept this means of payment.

Regulation of crypto currency

I must say, the world governments did not enthusiastically meet the growing popularity of virtual currency, responding to it with very strict methods:

• Central Bank of China in 2013forbade local operators to serve online exchanges trading in bitcoins (the most famous crypto currency for today, which we will consider later), which reduced the cost of the latter by 38%.
• In the same year, the Indian Central Bank actually suspended the work on the territory of the state of one of the largest exchanges on operations with virtual money in this country - Bitcoin Buysellbitco.in.
• In 2014The Central Bank of the Russian Federation called operations for transferring real money to the crypto currency potentially potentially doubtful: in the event of a bankruptcy of the exchange platform or loss of access to the electronic wallet, the state can not protect the citizen by law.

Famous world crypto currency

The list of virtual currencies has traditionally begunbitcoin, which was introduced in 2009 by a developer hiding under the pseudonym of Satoshi Nakamoto. In early 2013, one bitcoin was estimated at $ 20, and in November of the same year - $ 323. At the end of 2013, one bitcoin was equivalent to $ 1,000, and in June 2017 - $ 3000.

Such a “mad” turnover led to the creation of more than 80 clones of this electronic currency, the number of which is steadily growing today:

• zeuscoin;
• worldcoin;
• peercoin;
• hobonickel;
• fireflycoin;
• gridcoin and more others

Amazon online store in the same 2013distinguished himself by introducing his own currency Amazon Coins for his Amazon Appstore and a number of subsidiary applications, a unit of which is equivalent to 1 US cent. However, it is possible to pay with such electronic coins only within Amazon.

Litecoin, a project of software engineer Charlie Lee, is considered to be Bitcoin’s main competitor on the exchanges. According to the creator, transactions with his brainchild are 4 times faster than with bitcoin.

What is Bitcoin?

In order to understand the features of all crypto-money, let us consider, for example, the virtual currency Bitcoin, since all the others are, in fact, its copies.

Bitcoin (eng. bit - "bit", "unit of information", coin - "монета"), а таже биткойн, бтк, btc - это digital currency that works and is used only on the Internet. However, it is possible to buy very real goods, services, and also exchange them for real money. Bitcoins can be bought or sold on global exchanges on a par with other currencies.

It differs from the following:

• Decentralized. Not a single bank of virtual currencies, not a single institution in the world controls Bitcoins.
• Emission. Bitcoins are available only in digital form.At the same time, their issue is not the traditional seal of Central Banknote banknotes, but “mining” (mining) by ordinary users all over the world. The script for the production of bitcoins can run any person on your PC - it is in the public domain.
• Security. Unlike real money, btc is not provided with either gold or silver.
• Limitation. Bitcoin code allows you to "get" a maximum of 21 millionunits of this currency. However, it is divided into components to infinity. The smallest unit is named after the creator - satoshi. It is equal to 0.00000001 btc.
• Using. To start a bitcoin wallet in the payment system of the same name is a matter of 5 minutes, which is for an ordinary user, and for a legal entity.
• Anonymity. Creating a bitcoin wallet does not imply the input of personal information - neither the name nor the e-mail.
• No commission for translations.
• Instant translations.
• Transaction irrevocability. After sending bitcoins to a certain addressee, only he can return the currency back.
• Transparency. If you tell someone the address of your Bitcoin account, then this citizen can familiarize himself with the entire history of your transaction-transfers.

Pros and cons of bitcoin

Information about the advantages and disadvantages of virtual currency - Bitcoin - we put in a table.

Finally, let's talk about the prospects for cryptocurrency in our country.

Russian virtual money

In the summer of 2017, the CBR began to developvirtual currency of Russia. The beginning of this was the meeting between President Vladimir V. Putin and V. Buterin, the creator of cryptocurrency ethereum (Ethereum), which the Kremlin calls second in importance after Bitcoin. It is predicted that the new Russian cryptocurrency will be based on the development of Buterin.

About the first achievements of the project it will be possible to talk only in 2-3 years. So far, the Bank of Russia is determined with the principles of regulating electronic money.

Virtual currency is the money of the future.But already today, the excitement around it does not subside, but quite tangible material value is growing before our eyes, as can be seen from the example of Bitcoin. Against this background, the government and the Central Bank of the Russian Federation forecast to implement the project on the creation of a national cryptocurrency.