Fiat Currency V/S Cryptocurrency

What is Currency / Money?

Currency, often known as money, first appeared six to nine thousand years ago as a means of trade, in which people utilised anything of value. Around 3000 years ago, societies all across the globe began to use gold and silver as their main money. Then, about 680 BC, gold and silver were melted down and turned into coins of equal worth, which became money.

Governments subsequently began to create representational currencies in which you could deposit your gold or silver into the treasury. And you will issue notes that are essentially a claim check on the gold. So the paper check is meant to be as good as gold since it can always be converted back into gold. However, in August 1971, President Richard Nixon convened an emergency meeting and declared that foreign nations would be unable to convert their US dollar assets into gold. This was the genesis and formation of our present monetary system. A system in which no money is backed by gold or anything else of worth.

Money has always had inherent worth until the modern era, when governments established a system in which money is not backed by anything. This implies that governments and banks have complete power over money since they can create an infinite quantity of new currency with no restrictions.

What is Cryptocurrency?

Cryptocurrency is a just a medium of exchange. They are a method of doing a transaction digitally. They are virtual or digital currencies that are entirely independent of government control or any central authority, like as banks. They are essentially digital currencies that can only be managed by the user. This implies you don’t have to go through the bank to complete a transaction. This is referred to as decentralization in the context of cryptocurrencies.

Bitcoin is a digital money that was established in 2009. It is also known as a virtual currency or a cryptocurrency. It is based on the concepts outlined in a white paper authored by a mysterious person known as Satoshi Nakamoto. Bitcoin is entirely digital, which means that there are no actual bitcoins, just balances maintained on a public ledger that everyone can see. It is based on cryptography, which guarantees that only legitimate and genuine transactions are permitted on the network. This implies that no user can manipulate or defraud the system. This is the primary characteristic of Bitcoin. You can store and transfer wealth without the need for a third party to serve as a middleman.