Concept:The passage describes virtual currencies, their reliance on trust, lack of central regulation, and value derived from underlying mechanisms like mining.
Explanation:The passage states that virtual currencies have no central authority and often no legal tender, making them volatile and risky.
They derive value from an underlying mechanism, such as mining in cryptocurrencies, or from backing by an underlying asset.
Thus, for such currencies to remain in circulation, there must be a mechanism to verify transactions and provide rewards, as mining does.
Option A is false because virtual currencies are volatile and vulnerable to risks.
Option B is false because the passage says they are not necessarily regulated by the government.
Option D is false because virtual money is not always safer than paper currency, due to issues like double spending.
Option E is false because lacking legal tender makes transactions unsafe and insecure.
Only Option C directly matches the passage's idea of an underlying reward-backed mechanism.
Answer:Option C — To have virtual currencies in circulation there must be some underlying mechanism to verify transactions backed by some reward.