The world is changing. Let’s look at the edge of cryptocurrency over fiat today. The old and established regime is being challenged by the new and innovative. Bitcoin, the first peer-to-peer digital currency was created back in 2009. Since that year, cryptocurrencies have continued to grow in popularity and use across the world, gaining momentum with every passing day.
Bitcoin, which is just one of many cryptocurrencies available today provides a revolutionary way for people to send payments digitally without the need for any third parties such as financial institutions or banks. Instead of relying on these institutional intermediaries, Bitcoin transactions rely on cryptography to provide security as well as an anonymous form of payment.
When Bitcoin was first released, it was not well accepted by the general public. The main reason being the lack of understanding. But this has changed drastically as more people started to comprehend the change that Bitcoin brought to the world and adopted it into their lives as a new way of making payments. A vast majority of merchants now accept cryptocurrency as their preferred form of payment.
This is a major change in the financial industry which relies on trust, transparency and security, which is lacking in fiat currency systems today.
Bitcoin and other cryptocurrencies provide a unique kind of peer-to-peer payment system which offers many advantages over fiat currency systems.
Fiat currency is a system which relies on government backed currencies such as the pound, dollar or euro to make payments. Although these centralized payment systems are easy to use and widely available, they do not function well as a reliable store of value and are not safe from inflation.
The edge of cryptocurrency over fiat
1) Transparency
Cryptocurrencies are based on blockchain technology. Blockchain is a distributed ledger which records every transaction in its entire history, making it completely transparent and verifiable to anyone who uses the system. This transparency keeps the currency secure from any fraud or abuse of its users.
2) It’s Decentralized
The peer-to-peer nature of cryptocurrencies makes them decentralized and resistant to inflation, because they don’t rely on an external authority or a store of value such as precious metals like gold or silver. The lack of centralized control also means that transactions cannot be stopped or reversed by third parties such as banks since they don’t hold your money in their account.
3) It’s Secure
Cryptocurrencies such as bitcoin and Ethereum provide a level of security that is unmatched in any other payment method. They are decentralized, peer-to-peer payments which are not susceptible to any third party interference. As all transactions made using the cryptocurrency are public and transparent, it cannot be manipulated or altered by anyone on the network.
4) Instant Transactions
When you pay with a cryptocurrency, you don’t need to wait for an invoice, bank transfer or an SMS before the payment goes through. With blockchain technology, there is no waiting time and no delays in the transmission of money.
5) It’s Easy to Use
Since cryptocurrencies are completely digital, they are easy to use and can be accessed by almost anyone with an internet connection. This means that even those in remote parts of the world can use them to make payments. The transaction fees are also low which makes cryptocurrency a more affordable payment method compared to traditional methods like credit cards.
6) Privacy
People who use cryptocurrencies do not have their transactions recorded on a central ledger which can be accessed by third parties. As there is no need for any third party, there is no threat of theft or fraud as the transaction information is stored on all the users’ devices and stored in encrypted form.
7) No Control by a Central Authority
Cryptocurrencies like Bitcoin and Ethereum are decentralised, meaning that control over the currency is not held in one central place. This prevents anyone from manipulating the currency or shutting it down. There is no single point of failure which can be shut down or manipulated by someone else on the network.
No central authority controls cryptocurrencies like Bitcoin and Ethereum, but instead it is all held in a global network of users, who all act as validators to ensure that everything happens properly for everyone involved. As there is no need for any third party, you have far less chances of fraud and theft as compared to traditional payment schemes like credit cards.
Conclusion
Cryptocurrencies such as Bitcoin are a completely new and innovative way of making payments. As they are completely digital, there is no need for any third party to monitor or verify your transactions as it happens in real time. The transparency of the transactions means that you can easily track them and manage your finances accordingly.
The entire cryptocurrency system is dependent on the legitimacy of the currency and its blockchain technology, which means that it increases in value over time as more people start to use it instead of other fiat currencies. It is also growing in popularity across the world with more merchants accepting it as a form of payment.
Read this article on how to start investing in crypto.