iTeach Contest: How Cryptocurrency differs from Traditional Currency
Hello everyone, how are you doing? I welcome you to this weekly iTeach Contest on How Cryptocurrency differs from Traditional Currency, we understand that these two aspects are both connected to the financial institution, the major difference is that Cryptocurrency is a digital asset while Traditional Currency is a Physical asset, they are both money and can be used for settlement of debt in any regards.
Cryptocurrency is a digital currency that is built using blockchain technology, unlike the physical currency we spent in our day to day, cryptocurrency is a digital currency, it can't be touched but it can only exist in our wallet.
Cryptocurrency is referred to as crypto because they are protected using a cryptics algorithm, this is virtual money that exists on a blockchain, but this made them vulnerable as a lot of people are trying hard to get their hands on the assets, so for this case, they are protected using some high-level cryptography to secure its network.
Cryptocurrency came into existence in 2009 with the introduction by Satoshi Nakamoto, this came inward after the collapse of the Global market, and many individuals lost their assets, cryptocurrency promotes decentralization which means everyone gets their chance of safeguarding their assets rather than storing them in a bank or leaving the management to the hand of the authority, you are in complete control of how you manage your assets with cryptocurrency.
There are several instances in which cryptocurrency can be used, it is majorly used for financial settlement and also for making investments.
Financial Settlement - I use cryptocurrency to make settlements of debt, and also to sort most of my financial needs, in the case whereby I need to make transactions off-chain. sometimes I convert the cryptos in my wallet to a physical currency through fiat and it's then used for my financial settlements.
Trading - I also use cryptocurrency to trade, I mostly trade on binance and Kucoin, so in this case, I make use of the cryptos assets in my wallets to make these trades possible, this is done with ease and right from the corner of my home, I only need to make little research and some Technical analysis, then I'm set to trade.
Investment - I also make use of cryptocurrency as an investment, in this case, I buy some cryptos and invest them in a promising project, then when I have gotten enough returns from this, I could be willing to invest more and make more profits.
There is a large distinctive difference between cryptocurrency and traditional currencies, here are my few points regarding that.
Cryptocurrency is a digital asset that can only be spent on the blockchain network, while Traditional currencies are digital assets that can be spent in everyday activity.
Cryptocurrency assets are kept in a safe wallet where every individual has the chance of protecting their assets as they see fit, while the Traditional currency is kept in the bank and this has the full control of the authority.
Cryptocurrencies are assets that are globally accepted, the same cryptos exist all over the world and can be exchanged as seen fit, while the traditional currency differs and they are different, they are not interoperable and can only be spent in a specific country.
Traditional currency also has more stability than cryptocurrency, crypto is too volatile due to its large volume of trades, so this makes cryptocurrency to be risky and it has the chance of losing value in an instant.
My Choice between Traditional currency and Cyrocurrency is very clear, I am a great fan of cryptocurrency as it is easy to deal with, and the fact that I get to spend as much as I prefer without any authority censoring my transaction limit, and I also get to trust myself in regards of safekeeping the assets, and its always open to transaction 24/7, so it's safe to say my choice between the two is cryptocurrency.
Cryptocurrency is moving fast into the financial world, the crypto market now has a capitalization of 1 Trillion Dollars, which is as much as competing with the stock market, cryptos have come a long way, and their adoption is fast approaching every corner of the world.
Security - When the adoption of cryptocurrency is enabled in most parts of the world, the security will become more threatened, crypto is very risky and it's irrecoverable, assets can be easily stolen, and this can not be retraced, crypto promises anonymous, any transaction stolen can not be traced to the traitor, so in this case, any asset stolen cannot be recovered.
Volatility - Volatility is also a great factor to consider when adopting cryptocurrency, crypto can easily lose its value in a second, so you have to be careful when considering this factor in your business.
These are some of the advice I could give to anyone considering the adoption of cryptocurrency into their business, the advantages are far superior as it makes the transaction easier, and also is adaptable to any system, the only effects are the security threat and the instability in the price of it.
Thank you everyone for coming through, I hereby invite @solexybaba, @Sahmie, and @msaqquretk to take part in the contest as well.
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Curated by : @lhorgic
You have adequately spelt out the differences between cryptocurrency and traditional currency. It is very obvious that you're a big fan of cryptocurrency. Nice article.
Crypto to the world!