 | What is fiat currency?A currency that is controlled and regulated by the central bank of the respective country is known as fiat currency. The value of fiat currency is determined by the central bank based on people's trusts for specific trading value. Without the authority of the central bank, this currency does not have any use-value or intrinsic value. Fiat currency is an alternative commodity, which has been used as a medium of exchange in the last few decades. Unlike fiat currency commodity holds its value due to its intrinsic value like Gold, Silver, Iron, Salt, etc. What is Cryptocurrency?The currency which uses encryption to verify its transaction know as cryptocurrency. It involves advanced coding in storing and transmitting data between wallets and public ledgers. Due to the presence of the encryption process, it became secure and safe. The term encryption means converting the data or information into codes to prevent unauthorized access. The cryptocurrency can be defined as, currency which transaction verified by an encryption process. This process is very secure and safe due to the involvement of advanced coding for data processing between the walled and public ledger. This works on peer to peer system, which does not require any traditional bank verification to process the transaction between two individuals. This represents a borderless transaction system where anyone from any corner of the world can send money to anyone irrespective of its location. With the understanding of fiat currency and cryptocurrency let us now try to see the advantage of a cryptocurrency over fiat currency. Advantages of Cryptocurrency over the Fiat currencyWith a basic understanding of fiat currency and cryptocurrency let us try to make out how cryptocurrency has an edge over fiat currency. [link] [comments] |
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