Would crypto currency replace fiat currency

Cryptocurrency is very trending nowadays yet it is just been known by 1 percent of total population.

But what is the future of this currency? is it just the heat of the moment or it will replace the fiat currency completely.

let’s see some advantages and disadvantages of cryptocurrency over fiat currency.

Advantages

Avoids the double spending problem

First of all, you need to know what is a double spending problem.

Double Spending is a drawback of digital currency where the fiat currency in digital is being copied.

In digital currency, every token has a digital file which can be copied more than once which leads to inflation.

Cryptocurrency has fixed this fault because it is basically a software which works on ledger called blockchain which maintains the records of transactions between two parties in the blocks.once the information is recorded in the block, it cannot be broken.If anybody does it then a large coding would be required even to manipulate one block.

No need of banks

Imagine if you want to wire money to a different bank account, depending on your bank there will be different charges and tax to go through, while in the case of cryptocurrency you just need a wallet and you can do the transaction without visiting the bank and it has very low transaction charges.

Easy cashless transactions

As all of you know that most of the international business and transactions are done in US dollars.So if you are from a country where US dollars is not the official currency and you want to send money to a foreign country and even if you maximize the simplicity of a transaction still you will go through different phases.

One has to go through internet banking facility or third party transfer and it will take some time to complete the transaction and to receive money.

While in case of cryptocurrency as I have already told you just need a wallet and your transaction is done in very less time.

Disadvantages

Anonymity of the individual

I don’t know if it is a pro or con to you, but in safety point of view, you don’t know who you’re sending money to or receiving from.

Because of this, it is highly used by criminals.

However lately government of different countries are trying by issuing rules & regulations on it to avoid the anonymity.

Nowadays some wallets are asking for ID card some are not.

Maybe this can be eradicated completely in future.

No intrinsic value

According to Wikipedia intrinsic value is “In finance, intrinsic value refers to the value of a company, stock, currency or product determined through fundamental analysis without reference to its market value.It is also frequently called fundamental value.“

Cryptocurrencies are just software so how can you calculate it’s intrinsic value.

I know fiat currency has not also intrinsic value because it is not backed by gold as it used to be.It is just working on believing and trust so does the cryptocurrency.

As China has already banned the Bitcoin and other countries are also thinking of it.

While many renowned economists are saying that cryptocurrency will be the future.

It is difficult to predict the future of cryptocurrency, maybe it will overtake fiat currency or this bubble will pop up.

Read: why bitcoin is now a dead investment?

What do you think of it? write in the comments below.

About the author

Saifullah Khan

Hi there, I am the owner of gloomyworld.com, read more about me here.

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