Cryptocurrency has been making rounds in the news for quite some time now. And rightly so, since it offers much more than traditional currency.
Since its advent back in 2009, Bitcoin has continued to gain credence with every passing year.
Today, Bitcoin holds the throne of the crypto kingdom with a market cap that is over a trillion dollars!
Carl Runefelt is a global crypto leader and investor who has poured money into more than 360 crypto startups. He firmly believes that crypto will replace fiat currency one day.
He says, “Bitcoin is genuinely game-changing, and it represents a massive transformation for the global economy and, indeed, the whole globe. It represents a paradigm change.”
But some people are still unaware of how cryptocurrency differs from traditional currency. Are there any similarities between the two, and more importantly, what makes crypto better than the conventional greenback?
It is this very article that will answer all the above questions.
The Similarities Between Cryptocurrency and Fiat
Before we jump into the discussion of how crypto and fiat are different, first, let’s have a look at a couple of their similarities:
- You can use both of them for making payments
- Consumer trust is of utmost importance for both of them to function
- You can use both as a store of value
The Advantages of Crypto Over Fiat Currency
Cryptocurrency is so much better than traditional currency in multiple ways. Here’s how:
- There are intermediaries in crypto transactions like banks or the government. This means that as a consumer, you have greater control over your finances and do not rely on third-party to complete the transactions
Carl Runefelt adds, “We live in a digital world, we need digital money, and we need non-political digital money, and Bitcoin is the resolution, and I think that right now people are realizing it, but it will take some time before we see the full transformation.”
- The security and privacy of the blockchain network are incomparable to any other technology out there. You can have 24/7 access to it no matter wherever you are on the globe
Carl Runefelt says, “I know that for the fact that you cannot hack Bitcoin. You can hack exchanges which is something different but not Bitcoin. It’s important to understand that you can hack YouTube, you can hack banks, or literally any internet company out there, but you cannot hack Bitcoin. This is because the blockchain is very robust.”
- You can trade, invest, buy or pay at the same time with crypto. It offers far more flexibility than your local currency
- The associated fees of a crypto transaction are close to none. You can literally transfer millions of dollars with a fee of as little as a few dollars with crypto. Fiat forces you to pay hefty fees on each transaction
- In the era of IoT, you can enable countless smart devices to make frictionless transactions – that too without human intervention
- With more and more governments tightening their noose with financial regulations, fiat currency expects originator and beneficiary to reveal themselves. On the other hand, such money laundry regulations do not affect cryptocurrency as this technology maintains the anonymity factor for its clients
- Bitcoin transactions are also transparent to the extent that regulatory bodies like IRS can track criminal activities. Lack of transparency has always been one of the significant concerns of crypto critics.
- Also, crypto transactions that you make are anonymous. This is an added advantage if you do not want to reveal your identity when making the payment.
Some of the Cons of Crypto As Compared to Fiat Currency
- Volatility is the biggest issue facing cryptocurrencies. Investors fear losing their investment due to unpredictable fluctuations in the crypto price. The recent dip in Bitcoin price is the most notable example where thousands of investors have lost millions of dollars
Carl Runefelt considers it an opportunity. He recommends investing in Bitcoin when the price drops and then waiting for the right time to sell crypto when prices soar.
He explains, “If you want to make money through crypto, the easiest way is to buy at a low price and sell when it is high. Also, you can intelligently take advantage of massive volatility and volume.”
- Some users find investment in crypto quite complex and cumbersome as compared to investing in gold or fiat currency
Crypto vs. Fiat vs. Gold
Overall, crypto stands as a clear winner in terms of offering better investment opportunities.
Carl Runefelt emphasizes, “Gold is much better than fiat, but even then, Bitcoin has a huge advantage. This is because gold has a supply that is increasing very slowly, but it is increasing. Bitcoin is finite, so there is a small advantage there. You can transfer Bitcoin with a click of a button. But if I have to send a million dollars to gold to another country, it’ll cost me maybe more than the gold itself – the bigger the number, the harder to send.”
So if you want to multiply your savings, investing in crypto should be your best choice. Crypto has made numerous people millionaires overnight, owing to massive returns.
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