ARE VIRTUAL CURRENCIES MONEY? Cryptocurrencies or virtual currencies (VCs) experience high attention, because they allow their users to transfer money to other participants without a third party, without exchange rates, and even without stating their real name. Only a small processing fee has to be paid and the transaction is executed within minutes or hours (depending on several factors), even if the transaction happens between people located across the globe. Cryptocurrencies such as Bitcoin and altcoins have rapidly gained popularity, and are often quoted as a glimpse into our future. Virtual currencies (VCs) are digital representations of value, issued by private developers and denominated in their own unit of account. The VC ecosystem continues to transform with concepts of “currencies,” ranging from simple IOUs of issuers, VCs backed by assets such as gold, and “cryptocurrencies” such as Bitcoin. Assets like gold are backed by the combination of existing tangib...
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