As cryptocurrency has taken over our world in recent times, fiat currency is another form of currency that is well known from time past.
Although the word ”fiat currency” might look like a new word in the vocabulary, it is the form of money we all know.
Meanwhile, cryptocurrency and Bitcoin are the words we often hear in the financial industry today.
Cryptocurrency and Fiat currency although have things in common asides from the ”currency” attached to them. However, in this article, we’ll look at their major differences.
What is Cryptocurrency?
Cryptocurrency is a digitally encrypted, decentralized currency that is not linked to or regulated by any government or central bank.
It is based on blockchain technology, which is a distributed ledger framework. Blockchain is a distributed ledger that is managed by a network of computers that maintains an exact copy of the database and updates its records by consensus based on pure mathematics.
Bitcoin is the first cryptocurrency created which has led to the creation of others alike which include Ethereum, Cardano, Dogecoin, Tether, etc.
Cryptos are categorized as virtual or digital currencies. They were originally developed to provide an alternative mode of payment for online transactions.
However, cryptocurrencies have not yet been generally adopted or legalized by many nations and are actually too unreliable to be used as payment methods.
What is Fiat Currency?
It is a legal tender that is backed by the government that issues it rather than a tangible good or commodity. The word ”Fiat currency” means money issued by a country’s government
This type of currency may be in the form of physical money or maybe represented electronically, e.g. by bank credit.
Fiat currency includes paper currency, banknotes, coins, bills, etc., which has a store of value and is used as a means of trade to purchase goods and services. The supply is controlled by the government, and you can use it to pay your taxes.
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Differences Between Cryptocurrency & Fiat Currency
One of the major differences between Cryptocurrency and Fiat currency is that crypto is a digital/virtual currency while fiat currency is a physical or electronic currency.
Cryptocurrencies are operated independently without government backing while Fiat currencies are regulated by the government and issued by its central bank.
Cryptos doesn’t need an intermediary to make transfers while that is required for fiat currencies.
There is always a limit to the supply of most of the cryptos while the supply of fiat currencies are unlimited.
Cryptocurrencies are illegal in many nations of the world while fiat currencies are legal all over the world.
Cryptos are stored in digital wallets while fiat currencies are stored in bank accounts.
Another major difference is in their exchange. 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.
Cryptos are represented by private and public pieces of code while fiat money is represented by coins, notes, and bills.
Examples of cryptos include Bitcoin, Litecoin, Binance Coin, Shiba Inu, etc. The unit of fiat currencies includes Euro, Pounds, Dollars, Yen, etc.
Where To Trade Cryptocurrency For Fiat Currency
Prestmit, a digital platform is one of the best places you can trade/exchange cryptos for fiat money. You can buy or sell Bitcoin, Ethereum, Dogecoin, Litecoin, USDT, and so on and get your payment in Naira and cedis.
If you ever find yourself in a position to buy and sell cryptos, Visit Prestmit, it’s the best platform for you.