Money and the government have always been linked together since time immemorial. The State determined what was used and accepted as money, and controlled everything that was linked to it, but those days are gone. With the introduction of cryptocurrency especially Bitcoin, there seems to be a separation between money and the state. Bitcoin, like other cryptos, is an alternative to fiat currencies and even brought about the introduction of a parallel financial world, which is the DeFi realm. Digital currencies come bearing incredible functionalities that make them stand apart from fiat currencies. These functionalities are attracting more users daily like bees to a hive.
Cryptocurrency vs Traditional Currency: Which Is Better?
• Decentralization is achieved with Bitcoin
It is not news that with the coming of cryptos, the DeFi industry has picked up, offering incredible financial services that were once tailored for the rich and mighty. With DeFi, everyone can easily participate in these activities like high-level trading, premium parametric insurance protocols, OTC trading, and so on. There is no centralized authority to create policies and decide what happens in the Bitcoin network, unlike in the traditional money realm.
• Ease in cross-border payment
The world may be becoming more global daily, but the traditional finance sphere seems to be stuck in the past. Before a cross-border payment can be made, some hoops have to be crossed and red tapes have to be cut. The process of sending fiat currency from one country to the other using traditional central banks channels can be nerve-wracking, but that is not obtainable with Bitcoin. Bitcoin and other cryptos allow users to easily send money to others thousands of miles away without stress.
• Bitcoin and its resultant DeFi economy are reducing the need for long and stressful ID verification, background checks, or credit checks of any kind. Before a minor transaction can be done in the traditional finance realm, some checks have to be done, which clamp down on how efficient it is, but that is not the case in the DeFi realm. This has ushered in a whole new era of financial sovereignty as we know it.
• Immutable ledger
The traditional finance world has a loophole that allows records to be forged and destroyed easily. The records can be hacked, wiped off, or manipulated and no one may notice it, but that is not possible in the world of digital currency and blockchain technology. Every node has a copy of the transactions, making it impossible to alter transaction records on the chain.
• Fast transaction time and low transaction fees
Typical crypto when it is not facing congestion is fast and possesses a low transaction fee compared to what is obtainable in the traditional money sphere. Though Ethereum may be battling with congestion at this time, there is a myriad of other cryptos that boast of light-speed transaction time and little or no transaction fees. A digital currency is unlike other electronic cash settlement systems that need long hours or even days before transactions can be processed.
Conclusion: Cryptocurrency Vs Traditional Currency
From what is noticed above when pointing out the main differences, it seems that Bitcoin is winning in this cryptocurrency vs traditional currency war, and it is not surprising. Is it possible for crypto to replace Fiat totally? The answer is leaning to the negative because the presence of government will stop fiat currency from going extinct.