Comparing fiat currency with cryptocurrency is like comparing the upgraded version of something with its base version. To elaborate, what if we ask you to compare the barter system with the currency system. Both have their functions and are & were important in their sense. So one may ask why one should even compare cryptocurrency with fiat currency then. Well, the reason is ‘fear of change.’ It is a certain kind of uncertainty that prevents us from moving forward. Cryptocurrency is exactly that kind of change in the financial sector. In this article, we will bust open the factors that will show why the cryptocurrency is getting all the limelight, and why we are calling it a financial up-gradation.
Fiat currency doesn’t need much of an introduction. We all use it, are well aware of its functions, trading rules around it, the transfer fees, and so on. Cryptocurrency is the digital form of currency that fills up the lagging points of the fiat currency in a very efficient manner. So instead of viewing them against each other, we look at them as a progression from old to new. Here are the few areas where cryptocurrency sweeps the financial world off its feet-
- Funds transfer time has been reduced to a few seconds.
- The money transfer fee is way less in comparison to the fiat currency money transfers.
- The fund transfers, crypto trading, investments are not centrally regulated.
- Cross-border funds transfer has become more accessible to all segments of society with cryptocurrency.
- Cryptocurrency is much more immune to market turbulence than fiat currency.
So what are the benefits of using cryptocurrency?
We hope by far you have already got a clear idea of a cryptocurrency over fiat currency. In this section of the article, we will look at the benefits of using cryptocurrency-
- No Central control over funds-
Yes, you heard it right. Cryptocurrency means decentralized money. Therefore, a crypto user can stay safe from the effect of inflation and regulations by the central authority on trading and investment. The ledger-based technology of the cryptocurrency gives freedom to the user.
- Cheaper in comparison to the fiat currency-
Can you recall the last time when you wanted to transfer money locally or to another country? Do you remember the number of charges you had to pay (such as transaction fees, currency conversion charges, government charges on either side, third-party fees, and so on), along with the endless paperwork you had to go through to complete the transaction?
Now, what if we tell you that using cryptocurrency can wipe out all these efforts and also demand less fees? Well, cryptocurrency does that for you!
- Anytime, anywhere, to anybody-
No, we aren’t venturing into some poem! Cryptocurrency allows the user to send funds to anyone at any time of his or her choice. All one needs is a stable internet connection, the wallet address of the other person, and you are good to go. It doesn’t matter where the receiver is situated till the time both the sender and the receiver have access to the internet connection.
- No deception. Absolute transparency-
We are not talking about ideal stuff. Crypto transactions of trading, investments, or transferring money is all transparent. It is so because cryptocurrency is based on blockchain technology. The ledger-based system ensures crystal-like clarity in transactions, customer identification, storing crypto-based coins and assets, and so on. This kind of transparency is a beneficial thing for businesses, individuals, traders, alike. The ledger technology offers-
- Time-stamped transfers offer clarity and accuracy on funds transfer.
- KYC (know your customer) backed customer identification.
- The blockchain technology offers great security due to its nature of being a mathematical node on the blockchain ledger.
The mathematical node structure of the blockchain technology offers impeccable clarity and security. This makes it a very safe place to store and send funds. The transfers on the blockchain require both the receiver and the sender to have shared public keys and blockchain address for moving the funds. Until the private keys to the blockchain address get hacked or are lost, there is no way of losing the cryptos. Yes, it is that safe!
- No third party involvement-
With blockchain technology, cryptocurrency transfers are direct in nature. They take place between one crypto wallet to another crypto wallet. There is no involvement of any kind of third party. Therefore, cryptocurrency-based transactions have-
- Zero third-party fees.
- No paperwork for the third party.
- No influence of the third party over the transactions.
Any funds movement on the ledger chain is done between one crypto wallet to another. There are two main categories of wallets- hot wallet and cold wallet. Both the types have further several variants of crypto wallets. (Hot wallet is like active wallet which is used to do regular transactions on an everyday basis, whereas, on the other hand, the cold wallet is more like a storing space on or off the blockchain. In cold wallets, the user can store a large amount of fund over a long period.)
Crypto wallets are like gates to the funds. They require double step security that involves- Private Key and Public Key. These keys offer the utmost privacy to your funds at all times.
With fiat currency, such power to the user is not possible. By adopting the cryptocurrency in regular day to day uses the user can get a better understanding of the new age digital currency and therefore can feel confident about it. Our say is that Fiat currency is great and cryptocurrency adds to its predecessor’s features.