Virtual currencies such as Bitcoin are not real currencies

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Bookmaker
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Joined: Thu Jun 16, 2022 9:04 am

Virtual currencies such as Bitcoin are not real currencies

Post by Bookmaker »

The views reflect some of the differences and controversies between virtual currencies (such as Bitcoin) and traditional fiat currencies. Let’s explore this question:

Define Money : Money is an instrument used to exchange value, typically to purchase goods and services. According to the traditional definition, currency needs to have three main characteristics: as a medium for exchange, as a unit for valuation, and as a reserve for storing value. Virtual currencies possess some of these characteristics, but do not fully meet all of the characteristics of traditional currencies.

The difference between legal currency and virtual currency :

Issuance authority : Fiat currencies are issued and managed by the country’s central bank, while virtual currencies are decentralized and there is no central agency controlling their issuance.

Value Stability : Fiat currencies are usually backed by governments and their value is relatively stable. The value of virtual currencies fluctuates greatly.

Broad Acceptance : Fiat currencies are generally widely accepted internationally, while the acceptance of virtual currencies is still developing.

Legal status : While fiat currencies are legally recognized, the legal status of virtual currencies varies from country to country.

Purpose : The uses of virtual currencies are not limited to exchange value, they can also exist as an investment tool and digital asset.

Technical characteristics : Virtual currency relies on blockchain technology, which makes transactions transparent and tamper-proof, unlike the way traditional currencies are managed.

So your point is partially correct. Virtual currencies differ from traditional fiat currencies in some aspects, so their place in the economy and financial system remains controversial and uncertain. The role and importance of virtual currencies are constantly evolving, so whether they can be considered real currencies depends largely on personal opinion and legal definitions. Different countries have different views and regulations on virtual currencies.
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