Random Blog on Crypto (Part 34) : Why Crypto is an Asset (Part 2)
In the last post, I had discussed some reasons behind why cryptocurrency is an asset i.e. crypto asset. I have tried to explain some reasons and features in front of you. In continuation of that post today I will try to share why we call cryptocurrencies currency. In fact, several features of tokens or currencies are similar to cryptocurrencies. So in today's post I will discuss some features of why cryptocurrency is a currency and in the next post I will try to draw a line between this two hopefully.
Why Crypto is a Currency:
Medium of Exchange: Cryptocurrencies is a good medium of exchange now a day in this globalization world. It was initially conceived as digital currencies. The aim of crypto is to provide a decentralized alternative to traditional fiat currencies. Some cryptocurrencies, like Bitcoin and Litecoin are specially designed to be used as mediums of exchange in transactions and that is why they are using as well.
P2P Transactions:
Cryptocurrencies enable peer-to-peer transactions without the need for middle parties. Just needed and wallet so that what wallet to another wallet can be transferred. In fiat currencies their must have some clearing houses or central authorities but here there is nothing like that. This feature is aligning with the concept of currency. They are very much suitable for micro payments between the persons. Again a quick way of cross product payment and remittances. So this is obviously a nice feature of currency. Cryptocurrencies have properties similar to traditional currencies like fungibility and transferability. These characteristics make them resemble currencies in terms of practical utility.
Legal Tender:
In some cases, cryptocurrencies have been officially recognized as legal tender or a means of payment in specific jurisdictions. All though this is not come on in many of the countries but some countries has taken this initiative. For example, El Salvador has adopted Bitcoin as legal tender.
Currency Pairs in Trading:
Cryptocurrency trading have currency pairs. In trading, one cryptocurrency is exchanged for another. This trading feature of pair is obviously a similarity with currency.
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Your article is very good. Nicely explained. I hope you write articles like this in the future.Thank you.
Thank you very much for your appreciating comment.
You did good in providing this great information on cryptocurrencies is an asset, also enjoyed this part 2 like I did the part 1.
I shall come up with third part of this post to make a summary in between two
Alright that will be nice too