Crypto and fiat differ in a number of ways, which are outlined below:
1. Most cryptocurrencies are decentralized
To varying degrees, most cryptocurrencies are not controlled by an entity or government. The cryptocurrency may have a unique agenda in how it operates and seeks to be priced. Instead of one entity in charge, the networks operate using sophisticated technology (blockchain) and a community that follows a number of set protocols.
2. Cryptocurrencies are secured by cryptography
Cryptocurrencies use a computerized, global ledger that tracks every single issued token or coin, powered by cryptography that ensures no “counterfeits” can ever exist. Fiat currencies can be counterfeited and are tracked by a centralized bank or mint, where ledgers are stored with imperfect public information.
3. Cryptocurrencies are not tied to any geographical boundaries
The beauty of cryptocurrencies is that exist online, meaning that they can be traded and managed from every corner of the globe. Cryptocurrencies can be used globally as long as there is an internet connection, whereas fiat currencies are typically tied to a specific nation or geography where it is considered legal tender.
4. Cryptocurrencies have their processing fees priced into each transfer
Cryptocurrencies often have a transfer or processing fee priced into each transfer that is based on how busy the network is at the time, while fiat currencies in physical form and digital form alike often require high processing fees, a long period of time and an intermediary to be transferred globally.
5. Cryptocurrencies allow for faster and cheaper international transactions
Due to the nature of blockchain technology, transactions conducted using cryptocurrencies vs fiat currencies can be executed in a fraction of the time, at a fraction of the cost. When sending fiat currencies, the original amount is often traded between various currencies incurring fees along the way before reaching the recipient in their local currency.