For years, the main vehicle of financial transactions has been fiat currency. Each country’s central bank is charged with the responsibility of regulating fiat money, determining the currency’s exchange value. The value of a country’s currency fluctuates, increasing or decreasing against other fiat currencies per a host of factors, including people’s trust.
Bitcoin is a digital currency. There is no central governing authority between parties. Transactions using digital currencies are both flexible and secure. The system is transparent and relatively easy to monitor.
Advantages of Bitcoin over Fiat Currency
Digital currencies such as Bitcoin may be recognized by many people, but recognition does not necessarily result in full awareness of the benefits, which include:
- Low Cost of Storage and Transfer: When Bitcoin is compared to traditional banking services, Bitcoin has no storage costs. Regardless of the value of Bitcoin, transferring it is better than transferring fiat currency. Although the cost to transfer Bitcoin increases with its price, it is still less costly when compared to transferring fiat currency.
- Small Divisions Allow for Small Transactions: Bitcoin transactions are acceptable in extremely small parts, down to as small as one part in one hundred million (0.00000001). To honor the creator, this number is known as “Santoshi.” As a result of this division of value, extremely small transactions are possible, something that is not possible with conventional fiat currency. Bitcoin is one of the most equitable methods of transaction possible.
- Global Acceptance: Cross-border transactions with common and uniform value is not possible with Fiat money. With Bitcoin, it is. Fiat money stops at the borders of the issuing country, while Bitcoin can be moved anywhere without restriction. This is not the case with fiat currency.
As Bitcoin is decentralized and is not regulated by any one government, it can be used anywhere, at any time, without having to meet regulations or restrictions. Compared to any fiat currency, Bitcoin is infinitely more flexible.
- Zero Interference by Central Authority: Bitcoin is not, nor can it be, regulated or controlled by any central authority in any country. Governments cannot make regulations on Bitcoin’s purchase or sale. Owners of Bitcoin, or those who wish to become owners, are free to purchase, sell, and store it as they wish. This is not the case with fiat currency.
The reserve bank of any country has the authority to decide on the sale, purchase, and storage of the countries fiat currency. With this being the case, the owners of Bitcoin or any crypto-currency enjoy flexibility in transactions. Bitcoin can be used whenever and wherever the owner wishes, there are far fewer barriers for the use of Bitcoin than there are with any fiat currency.
- Cannot be Falsified: Bitcoin cannot be falsified, and it is not possible to make fakes. The reason is simple; it is not coinage nor paper money such as fiat currencies, it is digital. Bitcoin is powered by blockchain technology. The details of every transaction made are recorded in it, and it cannot be bypassed.
Any purchases made will be recorded in the technology. Blockchain is a digital ledger of all transactions conducted using Bitcoin. Every transaction is recorded; every record is accurate. Even if an individual wanted to manipulate transaction detail, it is simply not possible.
It is not difficult to see what aspects of Bitcoin are more beneficial when compared to fiat currency. There is no crystal ball, but it is not hard to imagine that the world will eventually use a common currency with a uniform value.
Since the turn of the year, Bitcoin has demonstrated how it can become a global currency. Bitcoin offers far more flexibility than any other currency.