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Digital currency and physical currency are the two major types of currencies. Fiat also called the physical currency has existed among us for a very long period of time. The government issued it with the view of initiating transactions.It is restricted to the country which issued it.The digital currency Cannot be seen or touched but it exists in electronic forms as its name suggests. The greatest and the best example of it is Bitcoin.
Invest or not invest?
As far as investment is concerned both of them fit well into the frame but some researches prove that crypto currency is a better option to go for So,its always better for a person to know about its pros and cons before diving into the game of investment.
The most common advantage of crypto is its speed and for fiat its advantages center around the mainone being stability.
The disadvantages include volatility for crypto and economic meltdown for Fiat.
This article contains plenty amount of information on the merits and demerits of crypto so a person should be well aware of the same before investing in it.
ADVANTAGES OF CRYPTO DIGITAL CURRENCY:
The transactions associated with cryptocurrency take very less time in comparison to the transactions of physical currency.
The charges levied on storage of crypto are very less and hence it overtakes the physical currency in this aspect.The charges incurred on transferring money internationally are also very less.
No restrictions on entry
There is no restriction for the person on entering into the investment zone of cryptocurrency as there is no hard and fast rule or any specifications on its usage. This is free from any credit check.If a person who wants to use bitcoindoesn’t have a valid ID,he can use it even then and does not need to go to the bank for the same digital currency.
Cryptocurrency is very much secured and protected as compared to the physical currency.
DISADVANTAGES OF CRYPTOCURRENCY
No insurance in crypto funds
No insurance is required on the funds associated with crypto currency whereas every deposit held with the bank is insured via de FDIC. If the deposits held with the bank are lost or something happens to them then we get an A certain amount of reimbursed value whereas this is not the case with the crypto currency.
No changes on the transactions made
Once a transaction is done it cannot be altered by any means digital currency. In other words it means that if a person sends more than the amount he had to send, then no alteration or changes can be done to that particular transaction as once it’s done it is confirmed on the blockchain And there is no room left for any modifications.
No private key=no funds
Displacement of private key leads to the loss of funds as it’s the only measure of signing into a persons transactions and noting them down on the block chain digital currency. Therefore it requires storage of the private key in a careful manner.
In order to use the crypto currency for retailing purpose the prices of the retails should fluctuate in order to match the crypto which is not possible therefore they cannot be used for such purposes as they are very volatile. This gets very hard for an investor to accept the cryptocurrencies when the prices plummet more than 20% at any given time.
Also Read: Is bitcoin the future of digital payments?