Bitcoin is a virtual currency that is used to conduct digital currency, just like any other currency. Today, there are more than 900 cryptocurrencies available all over the world. But, why is it better than fiat money?
Today, Bitcoin has managed to capture the interest of organizations and people globally. Therefore, it is very important to understand how cryptocurrency works. Bitcoin and its alternatives like Ethereum and Litecoin are all based on encrypted cryptographic algorithms. This makes the currency decentralized and gives the ownership to the user itself.
These virtual coins can be purchased at Bitcoin ATM and online exchanges. The most important feature of cryptocurrency is that it is a safe way of holding money since there are lesser chances of identity theft and fraud. Cryptocurrencies allow you to buy online services and goods and can be transferred as well.
Below are some reasons why cryptocurrencies are better than physical cash:
Since this type of virtual currency is not regulated by any central authority, cryptocurrency’s operations are influenced only by two parties – the seller and the buyer. There is no third party involved during the transaction. Therefore, cryptocurrency cannot be devalued or inflated by governments and banks, unlike traditional fiat currencies.
Cryptocurrency can be transferred via the blockchain, which is a highly secured, digitalized and decentralized ledger. Hundreds of millions of money units can be transferred at lightning fast speed while keeping the users anonymous. On the other hand, real money transfers can take up to days or weeks and are guarded by several regulatory bodies.
Tech startups and banks have been leveraging the lower cost of the blockchain technology to receive or send funds. Also, there are several other already established companies that are starting to integrate cryptocurrency modes of payment. This is another aspect that plays to the strength of cryptocurrency; transfers literally cost nothing. Even if there is a service charge for transferring the fund, it is much lower than bank rates.
Security and volatility
There are many cryptocurrency networks like Monero that provide total anonymity to users transferring funds using their network. Similarly, other networks that use cryptography provide better security than a normal bank. Personal details cannot be revealed. Also, digital cash is accepted globally and is less volatile than local cash currency, making it easy to conduct transactions across international borders.
Durability and portability
Bitcoin cannot be destroyed or damaged while traditional currencies can be counterfeited or destroyed. Since cryptocurrency is not physical in nature, they cannot be manipulated with. Also, when it comes to portability, different countries allow you to carry certain limits of cash when traveling. This is quite a hindrance for many people.
Today, many investors are trading cryptocurrencies on a regular basis. Its growth in popularity in 2017 is still unmatched, with over 1,000 different kinds of digital currencies used that year. Today, people are slowly realizing that using digital currencies in more convenient and easier than using traditional fiat currency. When compared to normal currencies, Bitcoins have many advantages.