Issue: №11/3, 2019
Doi: https://doi.org/10.37634/efp.2019.11(3).5
Introduction. The emergence of cryptocurrencies was preceded by the development of other varieties of virtual currencies, including game currencies, which were purely electronic and independent of government influence. Research of virtual currencies is the basis for understanding the essence of modern cryptocurrency, determining their status, identifying major risks and threats associated with their circulation. The purpose of the article is to study the nature and evolution of virtual currencies, approaches to their classification, and to analyze common and distinctive features of gaming currencies and cryptocurrencies as the main varieties of virtual money. Results. It is determined that the predecessors of the cryptocurrencies are game currencies, which are digital means of payment for specific categories of virtual goods and services in virtual stores and relevant multiplayer online games. The main stages of the development of virtual currencies after the emergence of game currencies include the launch of a game card trading exchange, the launch of bitcoin, the creation of a cryptoexchange market, the emergence of cryptocurrencies other than bitcoin, the first regulatory issues regarding bitcoin and the current stage of growth of the cryptocurrency market. Based on the analysis of game currency and cryptocurrency, the common and distinctive features of these varieties of virtual money are identified. It is found out that the main common features of cryptocurrencies and game currencies are the absence of state influence on their issue and the anonymity of operations. The differences between cryptocurrency and game currency are the purpose of creation, the method of emission, the mechanism of monitoring the emission, the accounting of transactions with virtual money, etc. The article presents the classification of types of virtual currencies, based on the type of issuer (centralized and decentralized) and the nature of circulation or convertibility into fiat money (convertible and non-convertible). Conclusion. Virtual currencies have undergone several stages of development since the 1990s. The most developed and widespread form of virtual money nowadays is cryptocurrency.
Keywords : virtual currency, game currency, cryptocurrency, bitcoin, digital money
References:
1. Karcheva H.T., Nikitchuk S.M. Innovative virtual currencies as the currency of the future. Finansovyi prostir. 2015. Vol. 2. pp. 23-29. URL: http://nbuv.gov.ua/UJRN/ Fin_pr_2015_2_4 (in Ukrainian).
2. Bitcoin virtual currency: Unique features present distinct challenges for deterring illicit activit. FBI Report. 2012. URL: https://www.wired.com/images_blogs/threatlevel/2012/05/Bitcoin-FBI.pdf
3. Dibbell J. The life of a Chinese gold farmer. The New York Times. 2007. URL: http://www.nytimes.com/2007/06/17/ magazine/17lootfarmers-t.html?pagewanted=all&_r=0
4. EBA opinion on ‘virtual currencies’. European Banking Authority. July 2014. URL: https://www.eba.europa.eu/ documents/10180/657547/EBA-Op-2014-08+Opinion+on+Virtual+Currencies.pdf
5. Elliott J. World of Sprycraft: NSA and CIA spied in online games. The New York Times. 2013. URL: http://www.propublica.org/article/world-of-spycraft-intelligence-agencies-spied-in-online-games
6. Kim T. The Predecessors of Bitcoin and Their Implications for the Prospect of Virtual Currencies. PLoS ONE. № 10(4). URL: https://doi.org/10.1371/journal.pone.0123071
7. Surowiecki J. Cryptocurrency. MIT Technology Review. 2011. URL: https://www.technologyreview.com/s/425142/cryptocurrency/
8. Virtual currencies – key definitions and potential aml/cft risks. FATF. July 2014. URL: http://www.fatf-gafi.org/media/ fatf/documents/reports/Virtual-currency-key-definitions-and-potential-aml-cft-risks.pdf
9. Yermack D. Is Bitcoin a real currency? Working Paper; National Bureau of Economic Research. 2013. URL: http://www.nber.org/papers/w19747.pdf