The Ultimate Guide to Bitcoin™

2. Understanding Virtual Currency

Bitcoin is what experts call a virtual currency. It’s also a digital currency, and a cryptocurrency. But above all, it’s a currency of some sort—just like the dollar bills in your wallet, only different.

So what exactly are virtual, digital, and cryptocurrencies, and how do they work? Understanding all of this is essential to understanding and using Bitcoin, so read on to learn more.

What Is Currency?

Okay, folks, it’s time for Finance 101, and the topic of the day is currency.

Currency, as defined by the Oxford Dictionary, is “a system of money in general use in a particular country.” That seems simple enough; currency is money.

But what, then, is money? Well, money—and, by association, currency—is a medium ...