Cryptocurrency vs. Fiat Currency: A Comparative Analysis.

?? Fiat Currency vs Cryptocurrency ????? By Bernard Ekal

Fiat Currency ??:

• It’s a government-issued currency used for daily activities like trade and transactions.
• Examples: Euro (EUR), U.S. Dollar (USD).
• Value controlled by the government and central bank.
• Risk of devaluation due to inflation, war, or loss of public trust.
• Produced through debt issuance and physical printing.

Cryptocurrency ??:

• Digital, decentralized currency, not controlled by any government.
• Examples: Bitcoin, Ethereum.
• Value influenced by market demand and volatility.
• Produced via mining, like Bitcoin miners receiving Satoshi.
• Transactions are irreversible and usually free from transaction fees.
• Limited supply, e.g., Bitcoin capped at 21 million coins.

Key Differences ??:

• Decentralization: Fiat is government-controlled, crypto is decentralized.
• Production: Fiat is produced through debt and printing, crypto through mining.
• Transactions: Fiat transactions can be reversed in digital form, crypto transactions cannot.
• Supply Limit: Fiat can be continuously printed, crypto often has a supply cap.

Importance of Fiat ??:

• Central banks control money supply, interest rates, and creditability.
• Supports national economies and trade.

Conclusion ??:

• Fiat currency is essential for national economies and widely accepted for various transactions.
• Cryptocurrencies offer a decentralized alternative with unique features like limited supply and irreversible transactions.

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