Bitcoin vs Fiat Currencies: Understanding the Differences

Bitcoin allows you to transfer money easily online with no middleman, meaning no banks or other institutions in between.

Bitcoin has been around for almost 9 years and with that, it has slowly but surely gained adoption. Bitcoin was created in 2009 by Satoshi Nakamoto (an unknown person or group of people.) Bitcoin is a protocol such as HTTP and SMTP. Similar to these two popular protocols, Bitcoin also operates on TCP/IP which stands for Transmission Control Protocol / Internet Protocol. You can also visit Bitcoin Revolution for getting complete details of earning profit with bitcoin.

Bitcoin allows you to transfer money easily online with no middleman, meaning no banks or other institutions in between. Bitcoin transactions can be done in seconds and confirmed in minutes without the need of any third party requesting sensitive personal information such as:

• Your Phone Number
• Your Full Address

And even more! Not only does Bitcoin allow you to send money globally anywhere at any time with no fees but Bitcoin also has enabled investors to gain massive profits. Bitcoin is gaining popularity and will eventually replace the current Fiat Currency (Currency that a government has declared to be legal tender, but it is not backed by a physical commodity.)

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Currently, Bitcoin can’t directly replace all Fiat Currencies because of its volatility. Bitcoin’s value can change rapidly depending on what the markets are doing. If Bitcoin’s price goes up it could potentially crash if there was a bad event or news regarding Bitcoin. Some examples of events that would crash Bitcoins price:

• A country banning Bitcoin
• Companies no longer accept Bitcoin as a valid form of payment

And more! In order for Bitcoin to become adopted worldwide, we need stability with prices and regulations put into Bitcoin. Bitcoin has the potential to be adopted worldwide and that is why Bitcoin’s price will continue to rise as more people invest, Bitcoin becomes more mainstream, and Bitcoin stabilises due to regulation.

There are lots of bitcoin trading platforms such as bitcoin code that can provide you huge amounts of profitable opportunities if you choose bitcoin trading.

What is Bitcoin?

Bitcoin is a type of Digital Currency. Bitcoin has a few advantages over other currencies: it’s secure, anonymous, and prevents double-spending. Bitcoin is different from fiat money because Bitcoin does not have any physical representations, whereas dollars are printed by the federal reserve. Fiat currency is centrally controlled and regulated against cryptocurrencies since it is centralised which makes it easy to manipulate the supply and demand of that particular currency. Bitcoin on the other hand cannot be tracked or manipulated as they run on blockchain technology making transactions irreversible without requiring identification from parties involved in the transfer of funds.

Fiat Money

Type of currency that currencies are made from and named after its value: usually paper money with some coins used in minor transactions. It has no intrinsic value and it derives its value from legal tender laws which mean that it must be accepted as payment for all debts public and private

Bitcoin mining

The computationally intensive process when computers connected to the blockchain network race to solve complicated mathematical problems
Bitcoin exchange: facilitates trade between and other kinds of currency such as Bitcoin and fiat money. Bitcoin exchanges operate like traditional forex exchanges where Bitcoin can be exchanged for other cryptocurrencies or fiat currencies.

Bitcoin ATM

An internet machine that allows one to buy Bitcoin with cash; although some Bitcoin ATMs also provide sell facilities as well.

Decentralised

(of power, control, or authority) not controlled by a single individual or group of people.

Centralised

(of power, control, or authority) coming from central station/authority/place.

Blockchain technology

The process of encoding data into blocks which are then added to the blockchain network using secure cryptographic methods.

Immutable

Impossible to change once it has been recorded on the blockchain network.

Irreversible

Bitcoin transactions cannot be reversed. They’re processed on the Bitcoin blockchain network and then securely recorded as a Bitcoin transaction that can’t be altered or erased.

Bitcoin exchange rate

Bitcoin is traded at different rates that fluctuate based on supply and demand. This Bitcoin exchange rate graph shows Bitcoin’s increasing value during its lifetime from 2009 to 2017.

Bitcoin mining hardware

Computers and other tools are necessary for Bitcoin mining.

Bitcoin vs Fiat Money – Conclusion

Bitcoin is a type of Digital Currency. Bitcoin has a few advantages over other currencies: it’s secure, anonymous, prevents double-spending, prevents fraud, and it is decentralised meaning that no single person or institution controls the currency.

So in conclusion, Bitcoin can be considered as a new type of currency that operates within a decentralised network with no central authority controlling members’ digital wallets where Bitcoin can be acquired by using Bitcoin Mining, Bitcoin Exchanges, and Bitcoin ATMs. Fiat money is the currency declared by a government to be legal tender; where dollars or Euros are issued by the government through its central bank.

(India CSR)