Fiat Currency vs Cryptocurrency | Physical Money vs Digital Money | Who will be the KING ?

As the era of cashless world was still under development, Cryptocurrency entered the picture and turned whole story upside down. Fiat currencies are being used for a long time now. Although it’s a legal tender but it has a major setback which takes us to the major difference between fiat and crypto-world. The entire fiat is controlled by the government including its supply and set of rules which come with it. Both fiat and crypto are still money and can be used in day to day transactions. 

Cryptocurrencies, well most of it, are transparent and decentralized in nature, reasonable enough to attract investors. Who doesn’t want sole control over their money? Fiat currencies have been a pain for many countries like India. The government has been working real hard to make the country cashless and to do so, Demonetization was likely to occur in such case but the process lead to crisis after a while. Although many countries have taken such steps and roughly 8% of world is still under the influence of fiat currencies.

Unlike fiat currencies, Cryptos are not controlled by banks. Even sharing the identity is not felt necessary in crypto-world. The transactions in Cryptocurrency are made without leaking any sort of personal information unlike fiat. Like whenever a transaction is made through the credit card, the seller gets all of the information that is with the bank user is associated with. This helps in preventing frauds and securing not only the money but user’s identity too. A decentralized peer-to-peer nature of the Blockchain ledger is far better than that of banking networks. Even though those systems are available online too but they still keep record of every move made by their costumer. Most of the times bank charge high fees on transactions but it’s not the case in crypto-world if third party connections are not created for processing of transactions. Even though Cryptocurrencies are volatile in nature but there is something which is more dangerous than its volatility in case of Fiat. What if you wake up one day and government announces to trim off your savings a little? No currency can be free from volatility but again unlike fiat currencies, Cryptocurrencies do not have any such authorities who have decisions for its volatility.

After acknowledging all the aspects of both currencies, a smart individual will choose to enter the crypto world. Many professionals have been predicting the future of this technology in long term. Most of them believe that the currency will take over fiat currency in coming years. The process cannot be instant due to many aspects. Traditional money cannot be replaced instantly due to the drastic role in country’s economy. Moreover, if the fiat loses its value too soon, possibilities of crisis will increase rapidly. More awareness for Cryptocurrency will be flowed with the time and so will the institutions change their paths. As Thomas Frey mentions “Cryptocurrency is very much here to stay. Cryptocurrencies are going to displace roughly 25% of national currencies by 2030. They’re just much more efficient, the way they run.’’

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