Although some may think that the answer is yes, there are still some things that people must consider before deciding to exchange their money into crypto.
Fiat Currency and Cryptocurrency
Fiat currency is the money considered “legal” in trading and purchasing goods. The US Dollars and Euros belong in this category as paper money that is backed by the Federal Reserve and the European Central Bank. Bank credits are also considered fiat money.
Cryptocurrency, on the other hand, doesn’t rely on a trustworthy institution to back up the value of the digital money. The price of bitcoin changes at a rapid pace, making it challenging to be considered a stable currency.
However, the fiat currency is not entirely infallible. If a country is affected by hyperinflation, the fiat currency can lose its value in a short time. Some people consider it best to invest in stable commodities such as gold instead of USD.
Differences between Fiat and Crypto
Except for the “legality” of both fiat currency and cryptocurrency, they are used in the same way. However, some benefits differ between them.
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