When it comes to choosing between these two modes of payment, one can safely assume that the majority would pick fiat currency as the more “secure” option. To those unfamiliar with this term, “fiat currency” is a government-issued currency (USD, EUR,..) that has no underlying value of a physical commodity, unlike gold or silver. Instead, the value of fiat currency is derived from the stability of the issuing government and the relationship between supply and demand. So, why do people assume that fiat currency is safer than crypto? There has never been a case of counterfeit cryptocurrencies. There are some misconceptions about cryptocurrencies that will be debunked in this article.
As the world changes, money has to evolve along with it. Just as how the use of the barter-system changed to commodity money and then to fiat currency. Cryptocurrency provides many advantages in relation to fiat money. The earlier you jump on-board with the changes, the better for you and your financial future as it allows you to adapt to this digital environment more effectively. Here are some main differences between Fiat and Cryptocurrency.
One of the most obvious benefits of using cryptocurrency also includes being able to remove “the middle man” from transactions. In a typical business deal, there would be paperwork, commissions, and special conditions which makes these dealings more complicated. By using cryptocurrency, audit trails are established with greater accountability and the two parties involved in a transaction know their exact roles.
Other notable advantages include it being easier to trade internationally because cryptos are not subject to the exchange rates, interest rates, transaction charges, or other taxes imposed by a specific country. Additionally, when it comes to asset transfers, you as the cryptocurrency holder have exclusive governance of your account which minimizes the time and expense involved in making asset transfers.
While some may doubt the security of crypto transactions, it is actually as safe as fiat currency since it can’t be reversed as in the case of the “charge-back” transactions allowed by credit card companies. The strong encryption techniques employed throughout the blockchain and cryptocurrency transaction processes are a safeguard against fraud and account tampering and guarantees consumer privacy. In light of this, we should keep an open-mind for the future of payments and embrace this change by learning more about it.