Crypto currency or virtual currency
Lately, it’s quite common to read in the press or hear about digital or virtual coins, crypto currencies and bitcoins. They have experienced a great boom, together with their innovative technology and their rising value... but, do we really know what this is all about, or do we think this is just science fiction and it’s something that’s not for us?
Virtual coins, also more technically known as crypto currencies, are payment instruments that use blockchain technology, one of the most innovative technologies currently available, which allow to make purchases, sales and other financial transactions. Virtual coins cannot be touched or carried in our pockets, as they have no physical support. The most popular one is bitcoin, but there are others, such as ether and litecoin. These currencies are available to anyone through several applications that can be downloaded on a smartphone.
Originally crypto currencies were created to provide a payment method that would allow making bank transfers of a considerable value quickly and very cheap. Besides, they’re not linked to any particular country, so they are presented as international currencies.
Nowadays, some of the main characteristics of crypto currencies are a tremendous volatility and lack of control by any government, central bank or financial institution.
Therefore, financial authorities warn that investing in bitcoins or other crypto currencies entails a high risk due to the lack of information and their highly speculative nature, leaving users unprotected against possible frauds.