Virtual currencies only exist in online ‘worlds’ and games. They have no physical form and cannot be used outside of these spaces. Some online gaming worlds like “Second Life” issue currencies. Players buy this currency with national currency. They can only use this currency to use, exchange or buy virtual objects for use in the gaming world. The terms ‘virtual’, ‘digital’ and ‘electronic’ currency are often used interchangeably but most conventional money today also only exists in digital form, stored electronically in computers, thus these terms are not very useful when they are so vaguely defined. Another group of currencies that are also often confused with virtual or digital currencies are crypto-currencies. The payment systems, security and management of these currencies are organized through a decentralized computer protocol that guards against counterfeiting through cryptographic signatures. However, even this description does not tell us very much about the idiosyncrasies and unique approaches of many of these new currency projects. The best known example of a virtual or crypto-currency is Bitcoin. It was the first currency to establish an international online payment system without banks as intermediaries and guarantors. It uses the so-called ‘blockchain’ technology, a kind of decentralized database that allows the history and authenticity of each transaction to be checked without going through a hierarchy. This technology and the success of Bitcoin has inspired many imitators such as Namecoin, Litecoin, Ripple, Faircoin etc. Some of these currencies can already be used to buy goods and services worldwide. Both types of currency were dealt with in the report of the European Central Bank “Virtual Currency Schemes”: