Virtual currency is a term used to describe digital representations of money that can only be accessed online (Frankenfield, 2019). Using virtual currency requires the right desktop and mobile software. Due to the delicate nature of the virtual currency, purchases must be performed either online or through specific, secure networks. The virtual currency is produced and controlled primarily by a private issuer rather than a central bank, so it is not subjected to any monetary policy. Conversely, the term “digital money” is used to describe any form of digitally exchanged currency, regardless of whether or not it is subject to any oversight. The government issues a digital currency tied to a sovereign’s value. As a result, national monetary policy determines the rules for the regulated form of digital currency.
The virtualization and cloud computing industries are part of the larger digital and virtual currency ecosystem. In contrast to the provision of computing services via the internet, as in cloud computing, virtualization entails the creation of physical resources, such as servers and networks (Habib et al.,2022). Customers can get computing power whenever they need it and pay just for what they use in this manner. Virtual currencies are relevant in virtualization and cloud computing because they are commonly used as a means of payment for virtual items and services within cloud-based apps or games. For instance, players may need to purchase in-game currency to progress through a virtual reality game hosted on the cloud server. In contrast, digital currency has the potential to be utilized for international payments and transactions because it can be exchanged between people and businesses regardless of their locations (Habib et al.,2022). Cloud computing is more secure and transparent when blockchain technology is applied to digital currency.
Virtual Currencies Spreadsheet
Virtual Currency | Encryption Method | Cybersecurity Technologies/Characteristics | Policy Constraints |
Bitcoin | SHA-256 and AES |
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Litecoin | Scrypt |
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XRP | Hash Tree |
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Binance Coin | Modified Byzantine Fault Tolerance (BFT) |
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Virtual Currency Findings
Virtual and digital currencies have altered the financial system and commercial operations. Virtual currency is a digital currency that is unregulated and uncontrolled by a central bank (Bolt & Van Oordt, 2020). There are both centralized and decentralized forms. Blockchain networks are required for user-to-user virtual currency transactions. In contrast to traditional currency, digital currency only exists in the virtual world of the internet. Any electronic device, like a computer, smartphone, or tablet, can be used to buy and sell digital currency. Virtual and digital currencies are complex because they rely on technology to enable transactions. In today’s market, both currencies are valuable, and certain businesses can conduct transactions in both. Understanding virtual and digital currency evaluation requires understanding virtualization, cloud computing, cryptography and cryptanalysis, encryption technologies, and cybersecurity challenges.
Encryption technology
Encryption, often known as cryptography, secures digital data through various mathematical procedures. Encryption helps keep sensitive data safe from prying eyes by transforming it into a hybrid of “plain text” and “ciphertext,” which only the authorized recipient can see (Chen, 2021). An authorized user must first decrypt the data by converting the ciphertext back to plaintext using a password or critical phrase before they may access the original data. That’s why encryption is such an excellent tool for protecting sensitive information.
Cryptography and Cryptanalysis
Cryptanalysis is the process of determining the plain text content of encrypted data without having access to the decryption key. Secure hashing, digital signatures, and other cryptographic methods are common targets for cryptanalysts. They may try to decrypt ciphertexts without the original plaintext, encryption key, or decryption technique. On the other hand, cryptography analyzes communications and information systems by using codes explicitly written for that purpose, which helps boost data security (Subramanian & Jeyaraj, 2018). In addition, they protect against data fraud by facilitating authentication procedures like message authentication codes (MAC) and digital signatures (Subramanian & Jeyaraj, 2018). End users cannot be assured that the data is correct without using hash techniques. Moreover, the non-repudiation service provided by a digital signature helps prevent arguments from arising if the sender decides to back out of the communication transmission.
References
Alcorn, T., Eagle, A., & Sherbondy, E. (2013). Legitimizing Bitcoin: Policy Recommendations. Massachusetts Institute of Technology.
Bolt, W., & Van Oordt, M. R. (2020). On the value of virtual currencies. Journal of Money, Credit and Banking, 52(4), 835-862.
Chen, J. (2021, October 31). Encryption. Investopedia. https://www.investopedia.com/terms/e/encryption.asp
Frankenfield, J. (2019). Virtual Currency. Investopedia. https://www.investopedia.com/terms/v/virtual-currency.asp
Habib, G., Sharma, S., Ibrahim, S., Ahmad, I., Qureshi, S., & Ishfaq, M. (2022). Blockchain Technology: Benefits, Challenges, Applications, and Integration of Blockchain Technology with Cloud Computing. Future Internet, 14(11), 341.
Subramanian, N., & Jeyaraj, A. (2018). Recent security challenges in cloud computing. Computers & Electrical Engineering, 71, 28-42.