image by @anomadsoul
In some years back, cryptocurrency have gained some popularity and a fast growing of digital currencies which most people have been accepting it more than traditional money because of its ability to be more independent and never wait or queue to be spent or use while traditional money such as fiat money which are always issued by government which as been the medium of exchange for many years or centuries but this traditional money or fiat currencies can also be used to purchase cryptocurrency. In this write up, i will like to explain or shed more light on the differences between cryptocurrencies and traditional money.
Cryptocurrency is a digital or virtual currency which works without a central bank but it’s been protected by cryptography and it is a decentralized, operating on a distributed ledger technology which is known as blockchain while traditional money is centralized, controlled and issued by the governments and the value of traditional money are been fixed by the central bank or government.
The main different between cryptocurrency and traditional money or fiat money to me is that cryptocurrency is not controlled by any central authority but it works on a pair to pair network and their transaction records are been maintained by network of the participants while traditional money are been controlled by central authority which this authority has the power to control the supply of money and therefore adjust the interest rates and determine is value so this makes it centralized.
In addition, traditional money exists in physical form such as bank notes or coins and it can be used in purchasing goods and services physical and can be exchanged in person while cryptocurrency are purely digital assets which exist in electronic form and are stored in digital wallet. Cryptocurrency is more transparent and secure than traditional money in the sense that all it’s log records are been stored publicly while traditional money are been recorded by financial institutions such as banks.
Cryptocurrency are so safe from theft because it’s been decentralized and doesn’t require any personal information to send or receive assets while traditional money can attract theft or thief because it’s require personal information to make transactions and is been subjected to various levels of regulations and oversight, aimed at preventing fraud or money laundering.
Traditional money are been saved at bank or financial institutions that are been secured with guards or cameras but that doesn’t mean it is been totally saved or protected because banks robbery can occur at any time but cryptocurrency is a digital asset that doesn’t need any individual to secure it but only requires public or private keys to protect your wallet so is been difficult for hackers pr scammers to have access into your assets.
In conclusion, the use of crypto currencies has given individuals and companies more freedom and efficiency with their savings and erase the fear to invest in it with ease rather than using financial institutions that are been determined or controlled by governments and the fear of bank robberies in the financial institutions.
Thanks for stopping by my post and i hope you enjoy reading it.