Around the world, more and more people and businesses are recognising the benefits of digital currency. Convenient and secure, digital currency is quickly emerging as a practical alternative to traditional fiat currency, but do you know how they compare? Below, we outline seven of the key advantages that digital currency has over cash. Continue reading to learn more.
Digital currency transactions are irreversible once authorised. This offers exceptional protection against fraud compared to fiat currencies, which are less secure due to the personal information required to make transactions and the potential for chargebacks. Digital currencies are empowered by blockchain technology, making them virtually impossible to counterfeit or duplicate.
2. Decentralised & Autonomous
Unlike hard cash currencies, digital currencies are decentralised, meaning they are not managed by a central governing body. The absence of governments and banks in your transactions gives you more control over how your money is managed. Your digital currency wallet works the same way the one in your pocket works; you have direct, immediate access to its contents. Compare that to the hoops you must jump through to move your fiat currency from one bank to another, and you can quickly see the difference.
3. Fast, Mobile Payments Online
Sure, no transaction is faster than cash over the counter, but fiat currencies have their limits. When you’re sending money internationally, for example, a payment with fiat currency can take days or even weeks to process, particularly if the payment is thousands of dollars or larger. Digital currency payments, by contrast, are not only easy to make online via mobile devices but also functionally the same regardless of the amount or distance.
4. Peer-to-Peer Transactions
We’ve already mentioned that digital currencies are decentralised, meaning you don’t need the resources of a third party like a bank or credit company to manage them, but this also means your transactions are directly peer-to-peer. Therefore, no third parties are necessary to guarantee the transaction.
5. Minimal Fees
Because digital currency fees are peer-to-peer, you’ll encounter fewer, if any fees when transferring funds. The networking structure made possible by blockchain technology eliminates the need for intermediary institutions to facilitate transactions. Not only will you pay less in fees than you would if you were transferring fiat currencies, but you’ll also find it easy to monitor the process and keep track of your funds.
6. Discrete & Confidential
With fiat currency, much of your financial history is documented and handled by third parties, such as credit reporting agencies, banks, collectors, and marketers. With digital currencies, that’s not the case. The transaction history of the coin is what is recorded and stored, not the spender.
7. Safer for Merchants
Digital currency transactions are validated in seconds. For merchants, this means a reduced risk of bounced checks or attempted chargebacks. Once a transaction is written in the blockchain, it cannot be withdrawn or reversed, offering enhanced security for businesses. Indeed, a growing number of merchants see digital currency as the future and are working to conduct more of their business with it.
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