Everyday, we use fiat money to purchase anything we want or need. Physical money is great to keep in your hands but what if there was a way to pay digitally? Through technology’s advancement, cryptocurrency was born and there’s been debate on which is better to use for payment in physical and online stores—crypto or fiat.
We have always been using fiat money ever since the old days as a form of exchange for goods. Fiat money is physical money whether it is through paper money or coins. Common currencies for fiat include USD, EUR, JPY, AUD, and more. As long as it serves a payment value in the country, it is considered as fiat.
Cryptocurrency, however, was recently created in 2008. A mysterious individual under the moniker ‘Satoshi Nakamoto’ created a decentralized method of transferring money digitally. What makes it so convenient is the fact that it lets you send money to the recipient in the snap of a finger through the use of blockchains.
Between crypto and fiat, both have their own pros and cons when it comes to using either of them in the market.
What’s New With Cryptocurrency
Satoshi Nakamoto had created cryptocurrency so there could be a method for people to use in transferring money between one another without third parties intercepting. Satoshi successfully created a decentralized digital cash system that anyone can access.
Nowadays, cryptocurrency has steadily been growing as a reliable currency and there are apps and online sites where you can use crypto coins as payment. You can use crypto to invest in projects, donate to charities, buy items online, and more like fiat money.
Here are examples of cryptocurrency commonly used worldwide:
1. Bitcoin – BTC (₿)
Bitcoin is considered to be one of the most popular cryptocurrencies to use around the world. Due to its popularity, its value has grown high ever since 2009 and even major companies worldwide use it.
Blockchains are used in bitcoin transactions. These blockchains hold the information needed for the users to successfully transfer their bitcoins. From bitcoin’s stable system, this was the start for crypto coins.
2. Ethereum – ETH (Ξ)
With Ethereum, it’s conventional because of its unique feature of smart contracts. Smart contracts are digital contracts between the seller and buyer to ensure the conditions for their transaction. No paperwork is needed for ownership and there is no third party to deal with when it comes to handling the transaction.
3. Ripple – XRP
From all the recent cryptocurrencies, Ripple is rising fast in the crypto game because of its fast transactions. Compared to other cryptocurrency coins, XRP takes 4 seconds to process the transaction. It can handle 1,500 transactions per second and it’s even possible for it to reach up to 50,000 transactions per second!
It is commonly used between banks because it provides a faster process to transfer funds internationally.
4. Litecoin – LTC (Ł)
Like Bitcoin, Litecoin can verify transactions through its blockchain, public ledger, and miners. It can process transactions between users faster by 2.5 minutes. This is pretty fast compared to Bitcoin’s 10 minutes. Another way it is similar to bitcoin is that there is no need for a bank or payment processing service for the transaction to be valid.
5. TRON – TRX
Recently in 2017, TRON was created as a blockchain-based decentralized application, which means it can also make quick transactions between the buyer and the content creator. This application is mostly used in the entertainment industry because it lets the content creator be paid in full and there are no additional charges for its consumer.
In order to get any crypto coin, you need to use fiat money in exchange for your preferred cryptocurrency (depending on your country’s regulations about cryptocurrency). From there, you won’t need to use your fiat money unless you want to convert it into crypto coins. There are different sites like the following where you can go to buy crypto coins:
- Coinbase – It allows you to convert any money you have in a bank, credit/debit card, or Paypal to Bitcoin, Ether, Litecoin, or Bitcoin Cash
- CEX.io – Buy crypto coins like BTC, LTC, and XRP and you can trade it online with other buyers or sellers.
There are other ways you can try to obtain cryptocurrency like Bitcoin ATMs, mining, or peer-to-peer exchange. After you get your crypto coins, you need to store them somewhere safe so there are wallets or hard drives available for cryptocurrency. There are 3 types of wallets you can choose from:
- Hot Wallet – This needs an internet connection for you to access it and you can easily set up an account to accept more tokens
- Cold Wallet – These type of wallets are accessible even without an internet connection and you can access your account offline
- Paper – Your private key and public address can be printed onto paper for you
- Hardware – Like a USB, it stores your private keys and it has strong security because it protects your crypto coins from unauthorized users.
Here are some wallets you can check out to safely store your crypto coins in:
- Exodus – A leading application for desktop, mobile, and hardware wallets where you can store over 100+ cryptocurrencies
- CoolWallet S – It acts as a hardware wallet you can carry around without having to use an internet connection to trade for crypto coins like Bitcoin, Ethereum, Ripple, and more
- Coinomi – A trustworthy blockchain wallet where you can buy, trade, and manage your crypto coins along with having a ton of features to keep it secure.
Cryptocurrency is steadily growing everyday and new platforms for crypto coins are being created. Test out what works best for you in terms of exchanging your fiat money to crypto and which wallet is user-friendly for you.
Keep It Simple With Fiat Money
Using fiat money isn’t new because it’s something you and everyone else uses daily. You can use it to pay for everything you need such as groceries, clothes, and other items you want. Fiat money, though, is controlled by the government and paying anything with fiat money can come with additional charges like taxes.
There is digital fiat money you can use but this is still different from cryptocurrency. Your money can be converted into digital money when you deposit it in an online bank account. This is convenient when you want to shop or play casino games online.
Digital fiat money is the money you find in bank transactions or credit card purchases. It is still centralized by the government like physical fiat money.
These are the common fiat money used around the world:
- American/U.S. Dollars ($)
- English Sterling (£)
- Euro (€)
- Indian Rupees (₹)
- Japanese Yen (¥).
To make sure your fiat money is kept in a safe place, there are options available for you to store it. These options are used in daily life and you could be using one of these methods now. This includes wallets, credit/debit cards, bank accounts, and vouchers.
- Banks – Set up your own bank account at your preferred bank and you can deposit or withdraw any fiat money at the the counter or an ATM
- Credit/Debit Cards – These cards are tied to your bank account and it can be used to pay for anything with just a swipe of your card
- Paypal – It is a popular online account where you can link your bank account or credit card so you can easily go online shopping.
The Ups and Downs of Crypto and Fiat Money
Cryptocurrency has made an impressive impact on the economy across the world. One of the main advantages of using crypto is its fast arrangements between buyer and seller along with keeping your money secure.
First thing you have to do before you delve into cryptocurrency is that you have to check if it’s allowed in your country. Fiat money can easily be converted in a foreign exchange booth when you travel to a different country but that isn’t the case for crypto. A downside of cryptocurrency is that it’s currently only available for specific countries around the world.
Another advantage for fiat money is that it is still a relatively stable currency because of the government’s control over it. Cryptocurrency is transparent in its transactions because of the public keys but it is currently not accepted in other countries due to its unknown stability.
Once you get the currency, you always have to store it somewhere you can easily access it. In real-life, it is easy to store your fiat money because you can keep it in a wallet or have the bank keep it safe in your account. For cryptocurrency, there are applications and hard drives you can use to keep your crypto coins. Phone applications and hard drives wired to keep all your private and public keys inside and only send the public keys when needed.
For both types of currencies, there are always ways to keep your money safe. After you get a digital wallet for your crypto coins, you’ll be given a public and private key to ensure its security. Public keys are used as identification for any transactions while the private keys are only for you to see. The latter is used for authentication and encryption of the user’s funds.
4. Influence on the Economy
When it comes to improving the economy on an international scale, cryptocurrency is the way to do it. Since it isn’t centralized like fiat money, there are no additional charges to whatever you are paying for. There are no extra fees because there is no third party involved in handling it. All costs will be in fair trade between only the seller and consumer in a transaction using cryptocurrency.
Fiat money can be converted into crypto coins and you can use these crypto coins anywhere you want around the world because the value is the same worldwide. The value of fiat money can change over time in each individual country but for crypto coins, its value is consistent because when it changes, it is on an international scale.
To keep its value up or consistent, you have to continuously invest in crypto coins and anyone can benefit from its value. This helps out countries with a poor economy because they can be on the same level as other countries’ economies by using cryptocurrency.
5. Other Benefits for Crypto and Fiat
One of the advantages of using crypto is that you don’t need to fill out your personal information to make your transaction. All you need is the public key and input for it to work. Everything is completely anonymous in cryptocurrency and the only thing they show are the details of the transaction.
On the other hand, it can act like a double-edged sword because the benefit of using fiat money is that you can meet people in real-life to trade or buy anything. You can know who you are buying from and get to handle the whole thing physically or through the bank controlled by the government for safe trades.
All the Money Is In Your Hands Now
As the economy grows, cryptocurrency flourishes along with it to become a stable way of transferring money around the world. It may be relatively new but it is climbing up the ranks to becoming a reliable way of transferring your funds user to user worldwide.
Even big companies are using this new system to keep up with the modern digital age and its great effect on the economy. You can use cryptocurrency to buy from online stores or to send money over to the seller. There are other uses for your crypto coins like playing casino games online for your entertainment.