If you are just having a look at this article, you may not know the differences that exist between fiat money and cryptocurrency, or indeed even what either of them refer to! Fiat currency, is the money that is issued by the governing body of a country that is does not have any physical commodities backing it up - such as precious metals etc. The worth of the fiat money issued by the governing body of the country stems from the requirement that the government that is issuing the money is relied upon and is valued – in other words, whilst not a physical commodity, the governing body issuing the currency could be considered to be the commodity in this particular instance. Have a look at https://rubix.io/!
Fiat money is advantageous to the government of the country since they are more able to trace it – in that they know exactly how much of it was printed and at which points it was so. So, Fiat money retains its value on the basis that the government that is essentially backing it also retains its value. The other way that it could maintain its value is that the two persons or parties that are exchanging it as a payment agree on this value, and agree to exchange it perhaps for further goods or services in the future at this same value.
Fiat currency can be used as a good means of exchange as long as it can maintain is value and serve the needs of the country that is using it - and most importantly, it must be able to retain some sort of value in line with what it was originally assigned. It is also advantageous in the sense that the government's that issued have complete control over it and counteract how much of it is released, since they are the ones that are printing and producing the money. However, Fiat money has many a down side. First off, it is not a stable currency as one that is reliant on the backing of a finite or limited commodity - this is for obvious reasons - the government can print as much money as they would so like and online resources required at any time, however a currency that is backed by a finite or limited commodity can only be released in accordance with how much of that finite commodity is available, such as silver or gold for example.
Now that we have a better idea of what currency actually is as well as why it exists, and a couple of different ideas on the different types of money that are in circulation, let's take a look at what cryptocurrency is. Cryptocurrency is a very recent phenomenon in the financial world - it can be used to pay for goods, services, or anything that cash or normal regular debit card could have paid for before. It is an extremely secure way of paying for things, and there's also in many ways more efficient than traditional Fiat money transactions. It is also used by people that do not wish to be traced in terms of what they are spending - this is because in order to maintain cryptocurrency, one must have an online wallets that is assigned a 'key.' this key is all that the user has to access via cryptocurrency holdings account - if they lose or forget this key, they will have absolutely no way of getting back into the account in order to get their money. What this means is that cryptocurrency holdings accounts are not tied to the user's that open them by any means whatsoever - account holders are not personally identifiable in any way whatsoever from their online account.
In order to truly understand what cryptocurrency is, it is important that you also understand how digital money is maintained in your own regular bank account. The most unambiguous terms, digital money is a really just values that are maintained on a server or in a database that can be changed at the request of any user that has access to them. These numbers that can be changed at any time are then assigned to an account number that is tied to the person that holds that account. A cryptocurrency is just the same as this, but one that is not existent in physical form for offline use in the world - as a regular currency is.
There are a huge number of advantages of cryptocurrency over Fiat money. Some of these include:
It is far easier to not have your spending habits tracked - When trading in cryptocurrency, due to the aforementioned facts with regard to not being personally identifiable from your online account, such as blockchain, then it is easy to see why it is easier not to have your spending habits tracked - no one person is identifiable or can be tied to any transaction that has taken place!
It allows for the sending of money to anywhere in the word almost instantly - the sending of money to anywhere in the world without increased hassle is without doubt one of the largest advantages and largest uses of cryptocurrency in the world today. Before the existence of cryptocurrency, sending any amount of money for any distance would be quite challenging - the money would not be able to be sent instantly and would be very delayed in getting to the intended recipient. This is not the case with cryptocurrency - cryptocurrency allows money to be sent from any online holdings address to another one almost instantly. This means that the person for whom the money is intended can receive it immediately. Advantage of this is that large fees that would previously have been charged to the person sending the money will no longer be existent.
More and more sellers of all goods and services – more and more suppliers, stores, and markets are starting to accept cryptocurrency as a valid form of trading now – it can be used in a huge number of places!
