Comparison of Cryptocurrency with Other Currency Models
By , 20 February, 2021
In the history of mankind, there have mainly been three different currency types: commodity, fiat money, and encrypted currency.
Compare |
Cryptocurrency |
Commodity |
Fiat Money |
| Example | Bitcoin | Gold | USD |
| Ways of presenting | Electronic wallet, private key | Gold bars, gold bars | Cash deposit |
| Issuing method | Algorithm, proof of work (or other consensus mechanism ) | Mining, refining | Issuing bonds, printing money and coins |
| Storage method | Electronic file (blockchain) | Keep in the vault, own | Own and deposit in financial institutions |
| Institutional storage costs | Free | Approximately 0.15% to 1% per year | Deposit spread |
| Transaction cost | Depends on transaction status | Higher | Lower, the range varies depending on the country |
| Anti-counterfeiting method | Cryptography and blockchain technology | Physically difficult to replicate or artificially synthesize | Anti-counterfeiting design, legal regulations |
| Physical delivery | No need to ship, you can use it with internet and private key | Expensive and has safety issues | Convenient than precious metals, but still has safety issues |
| Credit medium | Understanding trust mechanism | The rarity and practicality of physics, historical factors | National or alliance sovereignty, gold reserves |
| Record keeping | Blockchain automatic credit | Need to be handled separately | Need to be handled separately |
| Payment settlement | Decentralized | Not circulating | Centralization |
| Source of rarity | Usually has a maximum circulation | Physical and technical limitations | Central bank control |
| Identification | Blockchain | Physical and chemical tests | Reliable source, various banknote verification methods |
| Freeze | As long as the private key is there, it cannot be seized or frozen | Will be seized | Will be frozen |
| Privacy | The principle is anonymous but open, but some currency transactions are confidential | Real name but confidential when stored | Real name but confidential when depositing |
| Maximum change /year | Large, generally not less than ±1000% | ±10% | Depends on country conditions |
By , 20 February, 2021
Site moderator. Gold and silver enthusiast for 10+ years. Passionate follower of current events.
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