Fiat currencies derive their value from the credit on the economy and the supply and demand in the market but are not backed by a physical commodity. There is much of the talk going around the possibility of cryptocurrencies taking over the Fiat money. Well, before that happens, it would take a considerable amount of time for digital currencies to morph into reality and become mainstream. The constant increase in the global prices and the small role of central banks to control inflation has given rise to suspicion about the stability of the Fiat money.
Many of the western governments have started to regulate cryptocurrencies and even countries that were earlier reluctant to legalize it are showing signs of the change of the tide. Although the process is hectic, the lower processing fee, privacy during transactions and faster settlements are what make cryptocurrencies stand out.
Printing price:
Fiat currency utilizes the money from the treasury for printing various denominations, whereas virtual currencies like Bitcoin don't drain any amount from the treasury. This will reduce the overall cost.
Regulation:
Fiat currencies are regulated by the sovereign states and governments; who control its value and circulation. Cryptocurrencies are decentralized which bar the third party interference and rely on peer to peer exchange. Governments will no longer regulate as how much cash is to be printed, but the creation of a cryptocurrency will depend on the individual mining process.
Acceptance:
Venezuela has been in recent news due to its initiative of the launching country's national cryptocurrency Petro. Several other countries are showing interest in Cryptocurrency and others have already started to regulate the currency within their territories.
Transaction fee and speed:
Transferring funds to another account cost higher transaction charges. The fee for processing the peer-to-peer transaction is relatively low than the fiat currency. The website www.forex.academy shall inform one of the same, if you needed confirmation. Around 20-30 per cent of college students are holding on to cryptocurrency in an expectation that the prices would rise. The easier to use and less convenient fee makes it much preferable. The transactions are much faster.
Secure and 24/7 :
Unlike traditional wallets, cryptocurrency is secure. The peer-to-peer encryption blockchain reduces the drain and breach of users' account data. The transaction can be carried out at any time, whether it be a holiday or night. Removing the intermediary it gives us the control of our finances and investments. Unlike banks that open at a particular time or close on holidays, transactions can be processed at any time.
Credit Card:
If you have a credit card, then you know as to how many levels of intermediaries it goes through during a transaction. Cryptocurrencies remove various levels of interventions, hence establishes faster and secure transactions.
Manipulation:
One of the essential features of a cryptocurrency is that it cannot be manipulated easily because of its decentralization and deregulation. Cryptocurrencies can support a universal based income in the future to come.
Global digital economy:
It would reduce the hassle of converting different currencies and be widely accepted, thus, making the transaction more reliable and convenient.
Conclusion:
Cryptocurrencies are already taking over. Various companies have started to see financial opportunities in the market. Not only that, but it's brought ease in business. However, it is far away from becoming mainstream, but usage and the discussion around it have become much more clear. With Facebook launching its cryptocurrency and Venezuela's Petro, the future about the digital currency can be imagined. The year 2020 will see tremendous growth in the fiscal year with more and more names popping up to make a mark in the industry.
