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Fiat currency VS Cryptocurrency

Cryptocurrency vs Regular Currency

As my interest grew in Cryptocurrency, I saw that many of my questions were still unanswered, and the main issue was that I couldn’t find anything related to Cryptocurrency versus regular currency. It is a fundamental question that eventually becomes the base of any person’s idea. Moreover, this article would help a lot of people gain primary knowledge about Cryptocurrency, and by comparing it with the standard currency would improve understanding of the concept.

Comparison between cryptocurrency fiat gold

Cryptocurrency is abstract whereas normal currency (money) like a dollar or any other bill/coin is not. Both have different uses, but the main question remains: which one is better?

Cryptocurrency VS Fiat Currency

Cryptocurrency is based online and can only be stored in electronic wallets. Normal currency can be in your physical wallet, bank, or anywhere. An important thing to note is that Cryptocurrency is finite, you can not make more of it, however, new bills can be printed on command, in other words, fiat currency is infinite. There are tons of Cryptocurrencies like Bitcoin, Ethereum, Litecoin and so on, the same goes for normal currency. Although fiat is backed by governments and nations while Cryptocurrency is sort of private currency not officially backed by any government, only one odd case has ever surfaced where a government has backed Cryptocurrency.

Cryptocurrencies Pendulum


  • Cryptocurrency depends on supply and demand. 
  • Regular currency depends on factors like trade and more.

Cryptocurrency is finite, as I mentioned earlier; hence with time as the coin matures, its value increases as the demand would be increased, but the supply now goes down due to numerous reasons. Sometimes a user misplaces the password and all the crypto in his wallet is forever lost. It is believed that 3-4 Million of all the Bitcoins mined up till today have been lost. There can only be 21 million bitcoin, maximum. Regular money will never run out as the banks can keep on printing as much as they want. Does this mean the cryptocurrency is worth more than regular money because whatever we run out of is valuable? The most valued regular currency of 2019 is Kuwaiti Dinar, which is 1 KWD = 3.29 USDand the value of the most valued Cryptocurrency of 2019 is Bitcoin, whose value is 1 BTC= 7417.62 USD. Note that the worth of Cryptocurrency is very volatile, and just five days ago, 1 BTC’s value was 7760 USD.

Transaction Fee & Time

  • The transaction fee of cryptocurrencies is minute. $99 million worth of Litecoin was sent and that transaction took only 2.5 minutes to be transferred, and it cost only $0.40 in fees. Here is the transaction id: Litecoin.
  • Fiat currency has higher transaction fee and can at times take 1-2 working days to transfer / validate a transfer request of higher amounts.

Transaction fees of cryptocurrencies are low and transferred quickly. It takes about 9-10 minutes for a Bitcoin transaction and 2.5 minutes for Litecoin. However, the transaction fee of fiat money can take hours and even days to process. One more thing to note is that they charge in fixed percentages. Usually, around 5% of the total amount is their transaction fee. If a person transfers the same $99 million through money through the bank instead of Litecoin, it would cost approximately $4.95 million.

Centralized decentralized Crypto Difference
Centralized decentralized Crypto Difference


  • Cryptocurrency is decentralized thus not controlled by any single entity, decisions are rather made and implemented based on majority. Although we have shitty Ripple which is centralized and that breaks the core principle of Cryptocurrency
  • Fiat currency model means that a nation’s central bank controls it. All the bank accounts are also controlled by the banks, even if you are its rightful owner. Legal precedence can anytime seize your control over your assets.

The value of your bill or coin only exists with the bank, which means the central bank is in control of everything regarding the currency. As you can not keep large amounts in hand you deposit them in a bank and those banks can for any legit or illegitimate reason close your bank accounts barring you access of your own funds, thus making Fiat currency and its procedures centralized. However, the decentralized cryptocurrency gives the buyer an edge and control over what should have been his in the first place.

Requirements to own Currency

  • Anyone with access to a basic feature phone or a machine can create his own Cryptocurrency wallet which costs $0 and requires no user verification.
  • A bank account has a list of requirements such as work state ID, birth certificate, personal information, opening deposit, and other verification is required.

Basic Cryptocurrency wallets can be created without any verification or identification. There are services which may ask your address and identification proof to prevent scams and frauds as an added feature but that is optional. Buying and Selling Cryptocurrency can also be done without much verification, but verification here helps your own safety. Banks demand you to have multiple things like a good financial history, identification, address, and various requirements to be met after the account is opened, such as the minimum money present in the account etc.

Tracing Authentication Bitcoin Owner
Tracing Authentication Bitcoin Owner


  • Cryptocurrency that supports blockchain makes it easier to verify the authenticity of a transaction or a trade with the help of public ledger. The transactions are public while the wallet addresses are visible with no associated real life information
  • Normal currency is also traceable because of its serial numbers, but this info is not public. Although departments on demand can get access to all your transaction history on demand.

Tracing Cryptocurrency takes a lot of know-how about the technology and cryptocurrency itself, whereas hiding your crypto assets is almost effortless by using a few methods such as using a VPN or Tor that can change the IP address, coin mixers or use of privacy coins which does the job perfectly for you. Services like BlockSeer and Chainalysis do offer certain help in tracing the origins of a transaction but it does not reveal complete name or real identity. Fiat currencies have serial numbers on them, which can be traced by checking out the most recent place where that bill showed up. Apart from that all your digital cards associated with your bank can be instantly traced back at you.

Security Bitcoin Money

Scarcity and Security:

  • Production of any cryptocurrency is online and with proper authorization, secured by making use of cryptography . The security of crypto is high, which also makes it hard to forge a fake transaction.
  • Fiat Currency can be forged easily and that is the reason issuing authorities often change the way their bills look like (example is how Euro was recently changed). There are ways of detecting a fake but the possibility exists

Authentication of Cryptocurrency is carefree and tough to fake because verification takes place after every transaction and due to encryption. Although cryptocurrency transaction can not be faked but cryptocurrency brought all new sorts of scams, while some crypto hacking exists it is still nothing if compared with Fiat. Fiat currency has a few precautions such as labels, watermarks, window security threads, intaglio lines, and other physical attributes that set it apart from the fake. Serial numbers are almost useless for ordinary people because they can not verify the integrity of every single bill they receive, and even if they can, it is not a viable option.

Crypto Payments


  • Transferring cryptocurrency can take place between two people from anywhere in the world easily. Payments are made efficiently via cryptocurrencies, as many online stores accept these.
  • Transfer of fiat currency to remote people takes place through bank accounts, which is difficult and takes a lot of time. Using credit cards is a better option, but that makes it hard, and the currency is not in its native form.

Cryptocurrency transferred is more natural as it takes place in its native form, whereas the fiat currency sent is not in its native form. Moreover, crypto is exchangeable all over the world; however, fiat money can not be traded even with different credit cards. Online payments and at real stores Cryptocurrency works best, which the latter currency lacks.


The emergence of decentralised ledger technology has allowed innovations in peer-to-peer transactions that were difficult to imagine just a decade ago. This technology has also led to the development of cryptocurrencies and allowed them to challenge the role of money as mediums of exchange. However, the design of their protocols, at least so far, is very primitive and arbitrary relative to what the management of modern financial systems requires but soon it will be at par with what fiat currently has. Fiat currency is currently threatened by the adaptability of Cryptocurrency and many countries tried to ban or block crypto in totality but it is impossible to block such great technology. Countries are slowly trying to legalize cryptocurrency and banks are trying to adopt it before they miss the bandwagon of future financial asset transfer and holding. What are your pros or cons of Crypto or Fiat ?


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