Cryptocurrency vs Fiat Currency – GAG Coders
As the world is moving towards a cashless society, the payment system around us is transforming into a digital economy. Currently, only a small percentage of global money is expressed as physical forms of currency, with the majority of money being exchanged electronically through online payment apps, online, or using debit cards.
What is fiat money?
Cash. Greenbacks. Cheddar. Loot. No matter what you call the money that’s in your wallet or bank account, chances are your “money” is a specific type of currency called fiat money.
In its most basic form, fiat money appears as coins or paper bills, which are widely used throughout the world. The world’s most commonly used currencies, like the US Dollar, Euro, Japanese Yen, or the pound sterling are fiat currencies. Though there are many fiat currencies, all of them are issued by governments and none of them are backed by commodities like gold or silver.
A cryptocurrency is a form of payment that can be exchanged online for goods and services. It’s a peer-to-peer system that can enable anyone anywhere to send and receive payments. Instead of being physical money that is carried around and exchanged in the real world, cryptocurrency payments exist purely as digital entries to an online database that describe specific transactions.
|Fiat currency is backed by the Government and can be in the form of physical money or maybe represented electronically.||A cryptocurrency is a digitally encrypted, decentralized currency that is not linked to or regulated by any government|
|Issued by the central bank||Operates independently|
|Required to make transfer||Not required|
|Dollar, Rupee, Euro, Pond||Bitcoin, Ethereum, Litecoin|
|Legal in all countries||Illegal in some countries|
|Fiat money may be used to make digital or physical payments or transfers of funds.||Only a digital transfer of funds is possible with cryptocurrency.|
|Fiat currencies have a tangible appearance in the form of coins and notes.||Cryptocurrencies cannot be touched or sensed in any way.|
Greener alternatives in a financial system can promote an overall improvement in the global environment. By carefully regulating the number of carbon emissions, the financial system will thrive in a conducive environment and promote cost-effective financial services.
Moreover, the global environment will be free from pollution, illnesses, and global warming, mainly avoiding eco-friendly options. While everyone must protect the environment, adopting a greener path will require a great collaborative effort from citizens, the monetary system, and the government.