A brief introduction to Currency:
As long as humans settled in communities and acquired the ethics of collaboration and interactions with each other for smooth living, they need a medium called “Currency”. Currency-form changes from time to time with people and area to area. If we get back to 3000 BC, it was commonly traded as with the name of i.e. (Ashrafi), purely made of Gold metal, among the people. Humans have also witnessed the use of silver as a Currency formerly, but it did not gain much fame.
After centuries, History showed us the use of paper currency, which was first developed in the 7th century by the Tang dynasty (China). However, true paper currency appeared in the 11th century during the reign of the Song dynasty. These days, the world has progressed much technically and scientifically, so, there is strong combat to introduce new ways to shift its Traditional Currency into Digital Currency, instead of carrying the papers in the bundle.
Core features of Digital Currency and Traditional Currency
Traditional Currency is still greatly adopted by numerous countries as a common trading pillar. But its number is decreasing gradually, as Digital Currencies supplier putting their best to enhance their Currency legality and security. The core feature of Digital Currencies and Traditional Currencies are listed below.
A Digital Currency i.e. Cryptocurrency is any form of Currency which are stored, managed, and traded on the computer system, unlike money to be traded personally. It is a fast and reliable form of Currency to use internationally. Following are the features;
- Cashless Economies: These days, the great dilemma of people/traders that how to carry the stash of cash, and ATMs to deal in it. So, Digital currency offers them to trade without carrying any cash. Further, it makes transactions easier.
- Fast transactions: As earlier, businessmen spent days and even weeks to approve payments from banks to transfer their cash or cash in hand. However, this hurdle has been removed by the induction of Digital Currency into the market. It offers fast transactions and reduced taxes and other duties to a minimal level.
- Stable pricing: Unlike traditional currencies, digital currency is consistently improving its status and volume by gaining millions of investors across the globe. So, it’s damn sure to have your currency greater in volume.
- Strong Cybersecurity: Crypto-transactions involving Bitcoin transactions are network recorded, which comes in the BlockChain system’s remit. So, there is a rare chance of stealing or crashing the money. Also, the exchange of Bitcoin into dollars requires verification that further strengthens its credibility.
- Education and awareness: The interest in Cryptocurrency has been growing over the past few years. As 1 Bitcoin is worth equal to more than 57K dollars and is available in some 800 different kinds. The exposure means more consumer adoption.
Traditional Currency encompasses all sorts of Currencies except Digital, it includes paper notes, gold, and silver. However, it is old but still widely in use by the people. Features are given below;
- Fungible: The quality of the units of the good should be somewhat consistent so that they may be interchanged. If multiple units of an item have varying attributes, its value in future transactions may not be constant or dependable. Trying to use a non-fungible item as money incurs transaction costs since each unit of the commodity must be individually evaluated before an exchange can take place.
- Portable: Traditional Currencies compared to Crypto-Currencies are portable and can be divided into small quantities. So, trading in this money is quite easy, as it is transferable anywhere to anyone. Further, it is limited to local and one could easily trade in it.
- Recognizable: The users should be able to simply determine the legitimacy and amount of the commodity so that they can easily agree to the terms of an exchange.
- Local market stability: It is a bit stable as per international markets, so, sudden surges and declines in prices never hurt its value. As, it takes time to observe the Currency change internationally, so, goods do not lose their worth quickly and are stable.
Current and future currencies:
As per the above discussion, Cryptocurrency is the most reliable type of current and future currency. It offers uniqueness, top Cybersecurity, and rapid transaction services to the consumer. Overall, it makes the business fast and reliable.
Originally published on https://getapkmarkets.com/the-distinction-between-digital-currency-and-traditional-currency/ on December 3, 2021