HAVE YOU EVER ASKED YOURSELF WHAT FIAT CURRENCY IS?
Fiat currency is nothing but currency notes which you usually handle. If you write Rs 5 on the paper and the next day if the government announces it as legal tender then it is considered as money. Yes, this is how it works. Fiat currencies are controlled by the government. The Government has the right to increase or decrease the value of fiat currency. This currency allows central banks to control the economy. So now you have understood that modern paper currencies are fiat currencies.
WHY ARE MONEY NOTES BECOMING LESS VALUABLE? IS IT DUE TO DIGITAL CURRENCY? Is DIGITAL CURRENCY REAL MONEY? BUT WHAT DOES THIS CURRENCY REALLY MEAN?
Digital currency can only be seen on mobile screens or computers where we can transfer this currency from one computer to another computer just like a physical currency. These currencies can be transferred only to your permissioned members by using cryptography. This is a decentralized structure which means the government has no control over it, you are the boss and you can take control over it. See how cool this currency is. In simple terms, this is a currency or money which is stored or exchanged on digital computer systems. Cryptocurrency, virtual currency, and central bank digital currency are some of the examples of digital currencies
DO YOU KNOW THE CONTRAST BETWEEN FIAT MONEY AND DIGITAL CURRENCY? HOW IS CRYPTOCURRENCY DIFFERENT FROM FIAT CURRENCY? THE BELOW DIFFERENCES WILL SURELY HELP YOU TO KNOW MORE ABOUT FIAT AND DIGITAL CURRENCIES
Fiat currencies are the physical medium of exchange while digital currencies are the digital mediums of exchange. Fiat currencies are produced by the government but digital currencies are produced by computers. Fiat currency is generated by each country while digital currencies are generated by using computers. While using fiat money, you can get interest payments but no interests are associated with cryptocurrencies because of the zero percent involvement of the government. Fiat currency is used to fulfill almost all-purpose but digital currencies can be majorly used for online transactions to buy or sell. You can acquire fiat currency as wage by performing sales. But cryptocurrencies can be acquired by the process of mining. So you decide which currency you would love to use.
WHY is DIGITAL CURRENCY BETTER THAN THE GOVERNMENT ISSUED FIAT CURRENCY?
Digital currency is far better than fiat currency because of the following reasons:
- It is a decentralized structure which means the government cannot control your transactions, you are free and you are the boss.
- It is safe and secure, no one can ever steal your account because digital currencies run under the technology of blockchain and cryptography.
- Cryptocurrency using blockchain technology can be used in various fields like healthcare, data management, and product tracking. This means digital currencies cannot only be used for money things but it can also be used in different things as mentioned above.
- It is durable and traceable.
- It will minimize the task of verifying funds or risk-monitoring in the banks.
- Faster payments and faster transactions. Hence your transactions or amount transferring can be done within a fraction of a second.
- Less expensive international transfers. Credit card charges can be steep with international use. But by using digital currencies you can pay a much lower fee.
- 24/7 access.
- No chargebacks: By using digital currency, we can stop the fraud that comes from chargebacks. Sometimes customers will purchase a product and use it, then ask for a full refund from the credit card company for some false reason. Business looks at this as a cost of doing business.
- Greater trust with customers. Here all the transactions are recorded hence nobody can cheat you. You will always be stress-free.
- This makes it easier for international customers to do business. As they can pay whenever or wherever from any part of the world. With the help of cryptocurrency, there is no need to exchange any country’s currency for foreigners who want to do business in a particular country.
- There will be constant payment tracking: There will not be any concern for you as we can track our money every second of the day.
- Easy accessibility: The best thing about digital currency is that it’s available to everyone.
- Zero fees: When we store money in banks, banks still try to make a profit. That is why they charge fees. But the beauty of cryptocurrency is that we own it and not the banks. So we never have to pay a fee for using our own money using digital currency.
WHERE CAN WE SEE THE UPCOMING DIGITAL CURRENCIES LIKE CRYPTOCURRENCIES IN THE FUTURE DAYS?
Futurists believe by 2030, cryptocurrencies would occupy 25% of national currencies. These are highly accepted by customers and merchants. It will continue to have a volatile nature which means the prices will continue to fluctuate as they have been for the last two years.