A Comparative Guide Between Crypto And Fiat Currencies

Jump to page contents

A Comparative Guide Between Crypto And Fiat Currencies

Fiat and crypto currencies are sometimes thought to be similar in nature and scope, but in reality, there are significant differences between the two. As a start, cryptocurrencies such as Bitcoin and Ethereum only exist in digital ledgers, whereas fiat currency can be held and used anywhere.

What is Fiat Currency?

Fiat currency, such as the US Dollar or the GB Pound is issued on instructions by the government of a nation and regulated by a central authority, such as the Central Bank. Whilst original currency was meant as a portable form of commodity, usually gold, this fact has decreased over time. Today, most fiat currencies are based on the credit of the economy.

These currencies get their value from a supply and demand tug of war market. Exports, economic downturns, and uncertainty all lead to this value changing constantly. Fiat currency has existed for over a millennium, and it is seen as a stable and reliable facilitator of local and international trade.

Value

Generally, fiat currencies experience minor changes in their value over extended periods of time. Apart from instances of hyperinflation, where the currency becomes virtually worthless, people have confidence that the fiat currency they own in their wallets will have the same value today as it will have tomorrow.

The same cannot be said for cryptocurrencies, which have a reputation for being extremely volatile. 1 Bitcoin today can easily be worth twice as much or half as much in a week or month. In fact, the crypto community uses the term HODL, which means holding and storing crypto because of the belief that it will be worth significantly more in the future.

Currency Transfer

Traditional money transfers often require one or more institutions which facilitate the transfer at a cost. Banks, payment providers, and correspondent institutions all take a cut of fiat money transfers. As a result, transfers are often slow and expensive.

Cryptocurrency changed all that. In fact, this was one of the reasons behind the development of the technology; to allow point to point transfers in a secure, fast and low-cost way. Cryptocurrency wallets are used to store currency and through the sharing of confidential keys, cryptocurrencies can be quickly transferred.

Furthermore, through convenient exchanges including CEX and Coinmama, you can instantly buy, sell or trade fiat and cryptocurrencies from your computer or mobile phone.

Payments Convenience

Both fiat and cryptocurrencies are available in digital format, and can today be used to pay for products and services. Card and mobile payments have revolutionsed the way markets carry out purchases, by offering convenience and practicality.

However, whilst fiat currency has been and continues to be used for the majority of all global payments, cryptocurrencies have not yet gained enough momentum to follow suit. Items sold in any digital currency, such as Ripple or DASH have their price constantly changing, and this is something consumers stay away from.

Recently Similar Guides

cex-promotion etoro-promotion

Latest Guides

Cryptocurrency,Gambling,Gaming

Is Cryptocurrency Changing The Online Gambling Industry?

The gambling industry is just one of many that the internet has radically transformed. Gambling is no longer just for the elites in exclusive clubs, it’s something the everyman can do on his phone from the comfort of his own home. Nowadays, gambling is in the midst of another transition, brought on by the rise […]

14 January, 2020
Beginner,Cryptocurrency,Investment

Top 5 Cryptocurrencies To Invest In 2020

It has been another eventful year for cryptocurrency, with significant price movements amongst the top 10 tokens and plenty of heated discussion on the future of the technology. One of the year’s biggest news was Facebook’s Project Libra, which promised to bring about mainstream adoption of digital currencies. Notwithstanding all good intentions, this and other […]

24 December, 2019
Cryptocurrency,eToro,Intermediate,Trading

Trading Crypto On eToro

Set up in 2007, eToro became a leading trading platform across the world. Offering investors access to several markets and asset classes, the platform attracts a mix of novice and experienced users, eager to generate a return from their individual strategies. Cryptocurrencies are one of the latest tradeable markets to be added to the platform. […]

23 December, 2019
Beginner,Bitcoin,eToro

Trading Bitcoin On eToro

Bitcoin is the world’s leading cryptocurrency, with a market cap of over $134 billion and a daily trading volume averaging $21 billion. Millions of people around the world want to get their hands on the first and largest cryptographic currency, but choosing the right place can be tricky. The web has thousands of cryptocurrency exchanges […]

22 December, 2019
Beginner,Ethereum,eToro,Trading

Trading Ethereum On eToro

eToro is one of the largest online trading platforms in the world, supporting a variety of markets and financial instruments. Along with a useful trading app and one of the most comprehensive lists of payment methods, the platform gives you access to buy and trade numerous cryptocurrencies, amongst which Ether, more commonly known as Ethereum. […]

17 December, 2019
Bitcoin,Casino,Gaming

Reasons Why Bitcoin Gambling is on the Rise

Online casinos have been pioneers of innovation and technology. Therefore it’s not surprising that a good number of online casinos are offering bitcoin gambling games. The main reasons for adopting bitcoins in the gambling industry hang on the multitude of possibilities that bitcoin affords both online casinos and gamblers. Below are the reasons for the […]

16 December, 2019
Beginner,eToro,Margin Trading

eToro Fees Explained In Detail

eToro is an online trading platform which has gained popularity across the globe. Known for keeping up with the latest investment developments, eToro offers investors access to a wide range of instruments and markets. This guide will focus primarily on eToro’s fees, often considered to be some of the most advantageous in the industry. A […]

11 December, 2019
Beginner,Bitcoin,Hacker,Scam

A How-To Guide To Spotting A Bitcoin Scam

Bitcoin was created as an alternative to traditional payments, using a technology which eliminates the need for intermediaries. 10 years later, Satoshi Nakamoto’s vision looks significantly different from the original goal. Whilst you can buy goods and services with Bitcoin, the world’s first cryptocurrency is less a payment currency and more a speculative asset. As […]

10 December, 2019