In the past years, there’s been a lot of talk about cryptocurrency and how its different from fiat currencies.
We’re going to present you 5 ways that crypto is superior to fiat money!
What Is Cryptocurrency?
Crypto coins (Bitcoin, Bytom) are virtual and digital assets built with cryptographic protocols and (generally) issued my miners.
The first cryptocurrency, Bitcoin, was issued in October 2009 and over the past decade, crypto-assets took the world by storm. Currently, around 13 to 25 million people worldwide own crypto coins and the number of transactions and users increases yearly.
Before Bitcoin, many attempts had been made since the 90s to create digital money. However, each of these digital currencies failed miserably.
It should be noted that all of the first digital currency experiments relied on trusted third parties in order to make transactions.
What Is Fiat?
On the other hand, fiat currencies are issued by the government and are not backed by commodities (gold, silver, etc). Their worth relies on demand and supply and their relationships between one another.
Banks and governments can also intentionally possess the capacity to pause your fiat transactions. Hence, fiat money is controlled by a single entity.
So, after figuring out what fiat and crypto money is, now let’s discuss what distinguishes them from each other.
The most important reason that crypto-assets are so popular now is the fact that they are no central authority, government, or corporation that has access to a person’s funds.
Every person, business and every machine involved in mining and transaction verification, becomes part of a crypto-asset’s network. The main reason why this is so appealing to many people is the privacy aspect of cryptocurrencies.
Commonly, cryptocurrency networks don’t rely on a single point of control, which makes them more secure for users. An authority doesn’t have the ability to censor your right to manage your funds.
Another important thing about the decentralization of crypto coins is that the prices aren’t affected by government policy changes and such things, which in turn gives a sense of security.
The inflation issue
As we’ve established in the previous paragraph, shifts in the country or government policy don’t affect cryptocurrencies. This is very important for people from countries with serious economic/financial issues.
For instance, in March 2013 in Cyprus, the central bank made the decision to take away $100,000 worth of uninsured deposits to recapitalize itself. This is a great example of a central authority abusing its power and using citizens’ money for its own profit. This problem can be avoided simply by using crypto coins that are safe from such corruptions.
Crypto-assets are also very popular in countries such as Venezuela, where the inflation rate jumped over 1,000,000% and is still increasing daily.
Fiat transfers made by banks take several days to settle, especially if we’re talking about international transfers. On the other hand, crypto transactions are instantaneous. This can be a great advantage particularly for those people/companies that commonly participate in international transactions.
Another benefit of crypto transactions are the low fees. Generally, crypto transaction fees are around 0.075% while fiat transaction fees range from 1 to 5 percent on average.
Crypto-asset transfers are also permanent and hard to fake, which removes any fraud concerns. In addition, the transactions are transparent since they’re performed on an open ledger. Despite this, tracing a specific address is still very challenging.
However, you can still see your crypto portfolio history on your crypto portfolio tracker.
In short, crypto-assets are better than fiat currencies because of their transaction speed, security, privacy and low-cost fees. Using and investing crypto coins can be a little challenging, yet using tools like crypto portfolio trackers can save you much time. If you don’t know how to use them properly, explore the most extensive crypto tracker guide on the web.