Understanding More about Virtual Currency

A lot of people say that they are experts on virtual currencies but when asked about their opinion on virtual currencies, they go around in circles without exactly hitting the nail on what it is about. The truth is, their minds are still clouded by their potential earnings in fiat currency. Most people think that virtual currency is like those amounts on their Paypal Account or Online Banking account where the final valuation is dictated by the amount of fiat they receive.

In the book of Philip Mullan, digital currency is a general term for privately issued electronic value which circulates over the Internet outside of conventional banks. It is sometimes loosely referred to as “money that circulates online but not through a bank.” No privately issued digital currency has legal tender status in any country. Digital currency systems include both value transfer and Internet accounting systems. A closed online accounting system can be easily modified to be used as a type of digital currency. Because private Internet payment systems operate outside of conventional banking networks, these new global payment products represent a huge leap forward for inexpensive personal financial services.

Fact #1: Receiving Virtual Currencies already means You’re Paid

Whether the virtual currency is derived from math, cryptography, productivity, or any specific activity done online or even offline, earning those means receiving it’s value in its entirety. It’s valuation is based on the overall consensus or general agreement of the entire community using the virtual currency. Bitcoin for example requires you to download a software which allows your computer to participate in the global problem-solving activity for which the software aims to “guess” that value which will complete or solve the block on the blockchain. To guess faster, bitcoin miners would buy rigs in hundreds or even thousands of dollars a piece just to be able to speed up the guessing game. In short, it depends on who among those participants online, within the Bitcoin network guesses the correct value that completes or solves the next block for blockchain. Once you’re PC solves that problem, you earn bitcoins and you’re paid in Bitcoins.

That is why a Federal Judge says virtual currency (like Bitcoin) is real money in the case versus TRENDON T. SHAVERS AND BITCOIN SAVINGS AND TRUST.

Fact #2: Corporate Exchanges are NOT required by Virtual Currencies

Since there’s more or less 21 Million Bitcoins that will be in circulation all throughout the planet, this then indicates its scarce nature. If it’s hard to come by, then it’s value would tend to go up. But of course, the value entirely depends on the market. The proponents of Bitcoin intended bitcoin to be a final payment in itself. The exchanges are only there since they found an opportunity to control the currency price by offering it like a commodity. The exchanges opened their business in order for those who are accustomed to fiat to have a way to earn fiat and of course focus on saying that the best way to ever acquire a virtual currency is through them. Forget about the mining process. Buy now while it’s low. Then sell when it’s high. And they surely can control the virtual currency’s value.

Exchanges will just be the cause of failure for virtual currencies. Remember, there’s peer to peer. Peer to peer trading is still better than an Exchange because you, as the person who owns the virtual currency, are able to dictate the amount you want for your virtual currency. Following the rates from exchanges will only devalue your virtual currency since they play around supply and demand. And you know for a fact that virtual currencies are scarce in nature which should indicate that its value should be increasing. Dealing with an exchange is like dealing with another form of government. Once they have you, you’re leashed.

In other words, the goal of exchanges is to monopolize the control of virtual currencies away from the original people who created it and take control of the valuation.

Fact #3: The Value of Virtual Currencies are Determined by Real People not Governments

The real virtual currency is backed by the people using it and not by the exchange, not governments and not even other types of financial institution. Once a virtual currency is controlled by these entities, it will most likely to fail. Remember Mt. Gox and its users? Someone out there gained. That’s for sure.

Take note that I am talking about “control” not “use.” Those two words are different. If they use it, then it’s not controlling it and that is the key to increasing the value of virtual currencies: its usability. The moment they “control” it, then that’s the bad side of it since they can tremendously impact its value. And most of the time, on a downward spiral.

Fact #4: Virtual Currency is Property and Private Money

And since only a few owns it, is what makes its value tick. Compumatrix Compuceeds for example is another form of virtual currency. It is a centralized virtual currency like Ripple but Compumatrix doesn’t control the virtual currency but instead focus on “using” it through the Cryptoceeds.com eWallet and is continuously spent on the Compumatrix Trading Portal.

When you receive the virtual currency, you are already paid. But what’s interesting is that the value of your digital asset when you started compared to the value of the same asset (after you go through its rigorous trading, selling, buying, and value added activities) is higher than that of your original capital because it allows you to conduct peer to peer trading via the Compumatrix trading platform.

For example: If you bought a Diamond Card Package of Compuceeds by spending 500 euros worth of Bitcoin via Bitpay, you will soon find yourself owning 166 euros more in just a few days rather than waiting it out on an exchange which gives you a 50:50 chance and most of the time, that chance is more likely on the losing side.

What’s next?

Next time you earn virtual currency online, be part of the proud crowd. When you earn bitcoin, always remember that it’s real value is based on you and not on any exchange. When you receive Compuceeds, the key point is not how much fiat you intend or want to receive but how much the virtual currency is worth to you and the online community you belong to.

About the author

Henry is the Founder and Executive Managing Director of Compumatrix and Networks International. He is also the Editor-in-Chief of the Compumatrix Bloggers' Network.


  1. All these facts add up to one truth!! Bitcoin and crypto-currencies are the future of money!!

  2. I am thankful that because of my membership in Compumatrix, I am not alien to virtual currencies. However, it is only the surface that I am able to scratch. The knowledge and information I have is only a picayune percentage of what one needs in order to cope with the realities of trading and investment in cryptocurrency. But, thank God I am on the right track, blessed to be with the right people helping those like me along the way even as I continue to read and understand the nuances in this kind of business.

  3. What a true statement you made Mr. Henry. “Exchanges will just be the cause of failure for virtual currencies.” The exchanges just keep things in the old ways of banking, and the old ways of trading. If virtual currency was the end all of spending, that would make it successful in every realm. Our biggest hope is that Bitcoin and other coins like it, will be adopted by more and more merchants as legitimate forms of payments for goods.

  4. “Understanding More about Virtual Currency” is an excellent article that helped increase my understanding of virtual currency.

    You see, I am a “visual person” its hard for me to understand virtual anything including currency. I’m lucky if I can spell it, or say its name or know its abbreviation and that’s only the beginning of my challenges. The first time I saw the DEX I was absolutely intimidated. It could have been written in Greek and frankly, I’m not sure it wasn’t. Thankfully, I am getting better and with the help and patience of some excellent advisors, I am beginning to understand. This article helps; when virtual currency is explained at a very simple level, my mind begins to open and so I am grateful.

  5. This post is so accurate! People who own one bitcoin at 10,000 USD think to themselves that they have 10,000 USD, not that they have one bitcoin. People do not always think of actually being able to buy stuff with bitcoin… Bitcoin is already being used to buy items, but is not completely accepted yet. In the near future though, I think Bitcoin and other cryptocurrencies could be the standard method of payment.

  6. so totally agree on hoping that crypto is accepted world wide as a legitimate and useful source and in all honesty a viable and practical way to buy and pay for and also just do day to day stuff — I like the fact of not being under the control of central banks perse’ and literally as the world becomes more and more accessible thru the internet — the more Freedom we here at Compumatrix have the more success I believe we will find —

  7. having read this blog again — I have to admit honestly that most often in my mind I think and compare my Compu Business to fiat currency or dollars in America — and I had not accepted the actual truth that I have been compensated for my efforts and all the transactions thru the years — literally did not see that part in the first couple times of reading here — it does work read and read again — lol thanks Henry

  8. I understand these 4 facts…BUT…I want my crypto currency to have the same power as my normal currency have. It can buy me clothes, food and other stuff necessary to survive in this world.
    It brings me hope when I hear about stores who accept bitcoin as payment method…They are increasing, but not fast enough in my book.
    I just hope we get to see this cycle of crypto currencies in my lifetime.

  9. This blog post hits the major points in why virtual currency is so attractive! I think most people do not really understand what makes virtual currencies so special – there is a lot of hype around it, but the hype is there for the wrong reasons (not the reasons listed so wonderfully in this blog post). I think virtual currencies are even more appealing now that the world wants to be more sanitary due to covid. Thank you for sharing!

  10. I believe virtual currencies are the future whether people want to accept it or not. In order to really believe and accept virtual currencies as a mainstream method of transactions, they must first understand what makes it so special! What I find so nice about virtual cryptocurrencies is that it is decentralized! The people who own shares of the cryptocurrency and the miners control the price of the currency.

  11. as i would continue to learn the truth about crypto currencies and also cyber businesses — each part of the learning curve is important — also putting in perspective the truth of each part — being a business owner of the older sect — there are many changes twix then and the biz of the online world — one part that has been obviously very clear Now is adapt and accept change — but be open to Learn —

  12. it is just a great learning experience to come back thru so many older posts and put that info with the newer postings and like i said being an older offline biz owner from the past and now learning online it is different but you can honestly incorporate old into new and the entrepreneurial spirit is always an Internal Heart part — just great inspiration here —

  13. and it does not stop — you as business owners or entrepreneurs must always look past the simple equations and put the correct answers into the pot of success — then after you become familiar with the equations to win then you must not stop nor think you have won and then you can just sit back and relax — you must always push forward and do right —

  14. I believe cryptocurrency will be the future of money in time. I read post a where a guy managed to live on bitcoin for a very long time, he did it on purpose to see if it could be done and he did it by buying gift cards finding peer to peer and establishments that accepted it and that was last year so it can be done.

  15. This is a great thanks to Henry, who introduced us to compumatrix,we are learning a lot about different cryptocurrencies here,cryptocurrencies are a huge asset to our future.

  16. I believe Virtual Currencies are the future of real money,which will take over the fiat currency in the future.We are all very lucky and all thanks goes to our founder Henry for introducing us to Compumatrix,where we can safely use and exchange our Virtual Currencies,God Bless.

  17. Thank you, Henry, every time I go back and read something. More pieces fall into place. This will be a great resource of knowledge in learning for new and old. Just keep it up. You are full of great information.

  18. agree Tracy each read thru this great Blog and then I find others to read with and so much info — usable Info starts and becomes part of my work experience and understanding what i am seeing and being a part of — it is fascinating at bare minimum but honestly it is So Much more Maximum — jmho rj

  19. here we are in this next new year and we are so far along in the overall process and we are so close to getting what some just have to — however as we grow in our Biz and our relevancy in the peep to peep global bizzes — it is just so awesome and these next few years are at least to me just — Yeppers — much appreciation to HJB n All in the Mgmt Team — rjh

  20. These concepts are so new to me. Stuck in the paradigm of dollars and paper money. Cryptocurrency is exciting in how it shifts the paradigm and brings real people into its realm instead of just big banks. Always learning more and getting more and more excited about it.

  21. Thank you Henry for the introduction,educational Primer on Crypto currency.There are now many number of crypto currency besides Bitcoin,now Labelled as Alt coins.Bitcoin Still leads the pack in market cap and rank and it’s scarcity makes it an ideal asset to own and hold and see the price rise over time with usual fluctuations and volatility.The crypto currency is here to stay and in due course of time will,in my estimate,replace all the Fiat currencies of the world

  22. Thank you Henry, To provide us very good  information about virtual currencies,cryptocurrency is our future asset,thank you to compumatrix, who gave us a lot of information about different virtual currencies,virtual currencies will be the world’s largest payment method in the near future,this is a great blessing of God for us,we are member of compumatrix.

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