WHAT IS VIRTUAL CURRENCY?
Virtual Currency Definition
Virtual currency is a form of digital currency that is created and controlled by virtual developers. Similar to cryptocurrency, it is not bound by any entity or authority. It is unregulated digital money that is only accepted in the virtual world of the internet and has no real life usage. It is the form of currency that is neither printed on paper nor stamped in metal.
During the initial days of virtual currency, it was only referred to as currency that existed in the world of gaming for purpose of recreation and entertainment and still continues to exist in the same. One of the earliest examples of virtual currency was Linden Dollars. It existed in a simulated world known as Second Life. Launched in 2003 by Linden Labs, the virtual world allowed to users, who were termed as residents, to interact with each other in the form of avatars. The simulation enabled the user to travel the virtual world as well as create virtual properties using the virtual currency. The simulation went on to be a massive success and value of the virtual economy was estimated to be $567 million in the year 2009.
As virtual currency started to expand well beyond the virtual world of gaming, it has overlapped with digital currency and as a result, the lines between the two have started to blur. Like anything else on a digital platform, it runs the risk of security breaches as well as has implications on the dark web. On the bright side, it has brought a drastic reduction in transaction cost and doesn’t require a banking or financial medium to carry out transactions.