Cryptocurrency has put the entire world by storm. It proved to be a massive success. Consequently, it turned out to be a great hit among the investors, big or small. There are various advantages to Cryptocurrency that makes it a contender for becoming the future currency.
Talking about Bitcoin, it is the premier Cryptocurrency if one has to call it. Now Bitcoin strikes some major differences from that of traditional currency.
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So let’s take a look at the major areas of difference that Bitcoin strikes with that of traditional Currency.
Advantages And Disadvantages Of Bitcoin
Bitcoin has various advantages over traditional currency. Let’s go through the advantages that you could have with Cryptocurrency.
- Liquidity and Accessibility.
- User Anonymity and Transparency.
- Independence from the Central Authority.
- High Return Potential.
Other than the advantages, there are certain disadvantages of Bitcoins. One of the prime disadvantages that you are going to get with Bitcoin is volatility.
But, notwithstanding a few disadvantages, it can be said the advantage is in galore. No matter why investors are looking towards Bitcoin as a potential mode of Investment.
Major Areas Of Difference Between The Cryptocurrency And The Traditional Currency
Cryptocurrency has become so popular and trustworthy that investors in the economic alleys are comparing it to Gold.
You will be amazed to know that El Salvador has already made Bitcoin legal tender.
So it is no surprise that Bitcoin might replace the fiat currencies in the distant future. In this section, let’s try to make a comparative study between both the Currency based on common standards and yardsticks.
1. Anonymity
Bitcoin, Ethereum, and Dogecoin are all Cryptocurrencies. On the other hand, Dollars, Euro, Pound, and Yen are all fiat currencies.
The major difference between these is that traditional Currency is regulated by the central banks of respective countries.
The state has complete control and authority over the regulations that guide the movement or flow of currency. States have the power and authority to monitor their transactions using banks. So it is centralized.
On the other hand, Bitcoin is completely decentralized. It is not under the control of any state, institution, or governing body.
2. Flexibility
Traditional currency is functioning for five days a week, and they die to the restriction of transactions. There is no limit to currency being printed.
Each country prints money according to its needs. This directly relates to the demand and supply in the market.
Any disturbance in the market causing the rise of prices causes inflation. But in terms of Bitcoin, the limit is 21 million
Hence both the buyers and sellers mine Bitcoin accordingly. Therefore, there is no inflation with Bitcoin.
3. No Fraudulent Activities
With traditional Currency systems, the user must provide personal details, including phone numbers and others.
Whenever you are sharing personal details, you are at risk of getting them forged and misused. The malicious users could hack them.
Therefore the fear factor is there. Traditional currency can even face the issue of double-spending. This brings in a lot of risks and uncertainty.
With Bitcoin, every transaction gets recorded in the Blockchain. It is a public ledger. Here transactions are stored in blocks.
Here each and every detail regarding the transaction history, like the transaction time and others, are recorded. This will be moved to the memory pool.
4. Reduced Costs
Cost reduction is one important factor or advantage of Cryptocurrency. It will take around 2-3 working days for the transaction to be processed.
Payments through the traditional system consume around 3% of the transaction. But with Cryptocurrency, the processing charges are quite less compared to traditional currency.
With Cryptocurrency, the processing charges are done within a few hours or a maximum of 24 hours. Though there are fluctuations with Bitcoin, it is much safer than Cryptocurrency.
Conclusion
This can be understood that Bitcoin is getting stronger with every passing day. The advantages of using Cryptocurrency are tremendous.
Cryptocurrency is so successful that El Salvador already accepted Bitcoin as the legal tender.
The success of Cryptocurrency is so high that you never know it could replace traditional currency. So a wide acceptance is getting created with time.
