A Comparative Guide Between Crypto And Fiat Currencies

Jump to page contents

A Comparative Guide Between Crypto And Fiat Currencies

Ready to join our tribe?

We respect your email privacy

Subscribe now to recieve exclusive updates and offers!

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

Latest Guides

Bitcoin,Casino,Cryptocurrency

What are the Traits of a Bitcoin Casino?

The massive surge in popularity of cryptocurrencies such as Bitcoin has led to the flourishing of a new wave of online casinos. Bitcoin transactions are becoming more common so it was inevitable that the gaming industry would catch on to this trend soon enough. What Differs a Crypto Casino and a Regular Casino? Up until […]

2 October, 2020
Bitcoin,Blockchain,Cryptocurrency,Decentralised

What Is A Bitcoin Fork?

Bitcoin forks are an important aspect of open sourced and decentralized technology. Bitcoin forks allow users to create new blockchain platforms based off of Bitcoin’s open sourced code, but what is the point? In this guide we explain everything about Bitcoin forks, what they are used for, and why they are important for the cryptocurrency […]

28 September, 2020
Blockchain,Cryptocurrency,Ethereum

What is VeChain?

So, What Exactly is VeChain? VeChain is a platform created using Blockchain technology and designed to improve existing supply chain management and oversight. The platform takes advantage of several elements of Distributed Ledger Technology (DLT) to facilitate the process of origin confirmation and quality mark of a particular product. VeChain is made up of two […]

26 August, 2020
Bitcoin,Crypto Mining,Cryptocurrency,Mining

Hash Rate Vs. Hash Power

Hash rate and hash power are two very important aspects of securing and verifying the transactions on a blockchain. What is the difference between the two? Why are they necessary for proof-of-work verified blockchains? We discuss this and more below. So, What is Hash Rate? Hash rate and hash power both relate to how a […]

20 August, 2020
Bitcoin,Casino,Gambling

Betting in Bitcoin

Since their inception at the turn of the millennium, online casinos have been at the forefront of technology adoption. From mobile gaming to automated verification and the use of virtual reality, the industry is constantly evolving. This is normally great news for players, as most innovation is a step towards a better, safer, fairer, and […]

20 August, 2020
Bitcoin,Casino,Cryptocurrency,Gambling

The Next Big Cryptocurrency

Will There Ever Be A New Bitcoin? Bitcoin is the first iteration of blockchain technology and cryptocurrency to ever be created, and it is also the largest cryptocurrency by market capitalization, worth over 170 billion dollars. After more than 10 years from Bitcoin’s date of inception, there is now well over 5500 unique cryptocurrencies, hundreds […]

10 August, 2020
Cryptocurrency,Trading

What is Futures Trading?

If you ever hear about fictional characters wheel and deal over futures, you must be familiar with the phrases “invest in pork bellies” or “corner the market”. The movie “Trading Places” by Eddy Murphy/Dan Akroyd climaxed over the price of a product most people forgot: frozen orange juice. How can anyone become wealthy on pre-bacon […]

5 August, 2020
Gambling,Gaming,Regulation

The Importance of Responsible Gaming

What is Responsible Gambling? Responsible gambling is one of the most important aspects of playing online as it significantly affects the way players gamble. We’ll elaborate further on this, but first things first, let’s go through what responsible gaming actually is. Not to sound too obvious, but responsible gaming is the act of gaming responsibly. […]

27 July, 2020