Can cryptocurrency replace traditional currency?
Both are currencies, yes, and they are worth a generic exchange for other goods or services, but, inevitably, we find great differences between one and the other. The point that holds them together is the interchangeability they present. With cryptocurrencies, we begin to talk about value in the form of money, and we do it in such a way that the ‘internet of value’ is created.
Now, taking into account the growth that virtual currencies are experiencing in society, we believe that this may be a good time to clearly mark the main differences between cryptocurrencies and traditional currencies.
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The most significant differences between cryptocurrencies and traditional currencies
From chewing gum to a house. The euro, the dollar, or the peso are examples of them, but how are they different from cryptocurrencies? Pay attention:
1.Money is exchanged to acquire something of value
2.They are physical
3.Its core is in a specific country or countries
4.They are controlled by central banks and economic reserves
5.They become part of the economic system through bonds
6.The great influence of inflation and interest rates
7.They are issued by governments
8.Value transfers are very slow and bureaucratic
10.Not all people in the world have the power to have a bank account
1.Value is exchanged in the form of cryptocurrencies
2.They are virtual
3.They are global
4.They are controlled by all users and blockchain technology
5.They enter the market directly
6.Supply / Demand is the only influence
7.They are offered by decentralized mining
8.Payments between individuals are made instantly without intermediaries
9.Costs are for software maintenance
10.They can be used by the whole society, including those parts of the population without access to financial resources
Why is value being talked about in cryptocurrencies?
Although some people agree in pointing out virtual currencies as a kind of raw material, the truth is that no raw material in the world has an intrinsic value as such. Surely, you have heard about the soaring of cryptocurrency values and endless other news.
A couple of years ago, people began to talk about the internet of value as a consequence of a crypto-revolutionary phenomenon. We are increasingly convinced that blockchain technology is exciting, that virtual currencies are born from its hand and that what is exchanged is value in the form of cryptocurrencies.
Following this line of analysis, it was sought to give this valuable characteristic to elements that had great ease of movement (not like gold, or printed banknotes), such as digital items (cryptocurrencies).
Some even already believe that the internet of information is also that of value, although it is necessary to know that the price of crypto assets does not always coincide with their intrinsic value.
Conclusion about the differences between traditional currencies and virtual currencies
There are very clear differences between these two types of currency, but they also coincide in their exchange objective and in encompassing different currencies in turn. For example: within traditional currencies, we find endless names: euro, peso, dollar, penny, etc. The same thing happens in cryptocurrencies, since under its name there are a multitude of different cryptoactives, such as Litecoin, Bitcoin, Davies, Ripple, Dash, Monero,etc.
Many companies and ordinary citizens have found in cryptocurrencies an ideal place to make loans, test new technologies and have control over their own money.
Of course, never confuse value and price.