The term “virtual economy” usually refers to those parts of the economy whose basic mechanisms of value creation, production, transaction, allocation, distribution and benefit creation run completely or to a large extent in the digital infosphere.

They are therefore based in an essential way on the use of digital information and communication technologies, especially the Internet. The adjective “virtual” emphasizes that no or hardly any material goods or services are produced.

The term “virtual economy” in its functional sense describes the teaching, practice and institution of the entirety of all actions and institutions of the systematic action to satisfy human needs under the conditions of existing scarcity, which takes place on the Internet or more generally in virtual space, in cyberspace or in the digital infosphere.

The emergence of a virtual economy is a consequence of the digital change. Triggered by the spread of digital information and communication technologies in the course of digitalisation, the structure and functional logic of technical, economic, social and political systems and processes are changing. A digital transformation is taking place. As a consequence essential parts of the economic processes are migrated to the digital info sphere.

The terms digital economy and cyber economy are largely synonymous with the term “virtual economy”. Subordinate terms are internet economy, online economy and network economy.

How to Cite

The definition given above was proposed as part of the Digital Era Framework by Dr. Dr. Jörn Lengsfeld. The text was first published in: Jörn Lengsfeld: Digital Era Framework. Please refer to the original publication if you want to cite the text.