Information Technology IT – 12 IT in society | e-Consult

Cryptocurrencies and virtual currencies are often used interchangeably, but distinct differences exist. Cryptocurrencies are designed to be decentralized, meaning they operate independently of a central bank or authority. They typically utilize cryptography to secure transactions and control the creation of new units. Examples include Bitcoin and Ethereum. Decentralization enhances security by distributing the risk across a network of users. Regulation surrounding cryptocurrencies is still evolving and varies significantly by jurisdiction.

Virtual currencies, on the other hand, are generally centralized. They are issued and controlled by a single entity, such as a company or a government. While they may employ some security measures, they are typically less secure than cryptocurrencies due to the centralized nature. Regulation of virtual currencies is often more established, as the issuing entity is accountable. Examples include in-game currencies used within online games or digital tokens issued by companies for loyalty programs.

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