Convertible
Convertible virtual currencies, as the name implies, can be converted to other digital currencies. Cryptocurrencies, for example, are for the most part convertible. You can convert Bitcoin into any other cryptocurrency or exchange it for fiat currency on any cryptocurrency exchange.
Other convertible virtual currencies include Second Life's Linden, which players can exchange for fiat currency through the LindeX exchange on the game developer's platform. Credit card transferable points programs may also be considered convertible virtual currencies. Most credit card companies offer the option to redeem points for a statement credit in U.S. dollars, or you can transfer them to certain frequent flyer or hotel loyalty programs.
Virtual currency, digital currency, and cryptocurrency
Virtual currency, digital currency, and cryptocurrency are tightly related terms. One way to think of them is like Russian nesting dolls. All cryptocurrencies can be found inside the virtual currency doll, and all virtual currency dolls are found within the digital currency doll.
In other words, all cryptocurrencies are virtual currencies, but not all virtual currencies are cryptocurrencies. Likewise, all virtual currencies are digital currencies, but not all digital currencies are virtual currencies.
Examples of virtual currencies that aren't cryptocurrencies include in-game currencies and frequent flyer miles. Examples of digital currencies that aren't virtual currencies include the U.S. dollars represented by my bank statement or any other fiat currency not held in physical form.
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