This article will analyze and highlight the strengths of cryptocurrencies versus fiat currencies. The individual characteristics of cryptocurrencies differ from fiat currencies. Some benefits could motivate consumers to use cryptocurrencies rather than fiat currencies. Cryptocurrencies are no longer as “trendy” as they were a few years ago, but maybe it will start again. Therefore, let’s look at some information that could broaden your horizons on this topic.
Immunity to inflation
Generally speaking, inflation is a long-term rise in prices. Monetary inflation is caused by an excess of money. If supply goes up, money loses value. This points to Bitcoin, which has a maximum quantity of 21 million for the future. There is no central authority capable of influencing and changing this. As the supply of coins is limited, the excess is not possible, and cryptocurrencies are immune to high inflation levels. Bitcoin’s 50% inflation in 2011 fell to 4% in 2016. It is expected to continue to decline. It is also assumed that when all 21 million Bitcoins are extracted, inflation will be 0.001%.
Lower transaction costs and higher speed
If a person needs to send money to another state or continent, then the main problem is intermediaries. If the payment is in a Fiat currency, the money goes through the banks. There, the transaction can take several days and can be quite expensive. The average time to receive payment worldwide is 3-5 business days. On the other hand, the average transaction at Bitcoin costs $0.67. It takes 10-30 minutes, which is expensive and slow compared to newer cryptocurrencies. For example, in April 2018, a $99 million transaction was made in one sale, lasting 2.5 minutes and costing $0.40. It was done in Litecoin. Significant differences in the speed and cost of the transaction motivate new customers to use cryptocurrencies instead of traditional financial institutions.
No barriers and an unlimited number of transactions
A transaction made on Blockchain cannot be canceled. It cannot be falsified, copied, or cryptocurrencies used twice, which is a guarantee of the credibility of this system. Every e-Wallet owner can pay anyone, anytime, anywhere, and there is no limit on the number of transactions. Money transfers cannot be regulated or blocked. So, anyone can make transactions around the world. That is a difference between fiat currencies and cryptocurrencies.
Easy to use
In most countries, you must go there to open a bank account at a regular commercial bank. It is not possible to open an account online. You need to come to the branch and prove yourself with an identity card. By comparison, opening your e-wallet takes less than 5 minutes. It has immediate use. Without any particular questions or additional commissions.
One of the most important aspects of people in the Crypto world is anonymity. Both payments and e-wallets have their addresses. It is not possible to refer to currency, company, or other information. All you can see is that it’s an address. In any case, all payments are recorded in a blockchain, they cannot be hidden. Also, they are not as anonymous as cash. When someone puts a million dollars in someone’s briefcase, no one needs to find out. Which is something you can not reach with Fiat currencies.
Thanks to the use of blockchain technology, the cryptocurrency network has a record of every transaction made in the system. Cryptography technology holds information about everything. Companies can publicly use their bitcoin address. Everyone can see that it belongs to that company. But when they choose to hide their address, no one will ever find out that it belongs to them.
So, if you want to follow cryptocurrencies prices and its characteristics, feel free to do so right here.