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What is the difference between cryptocurrency and fiat currency?

Learn from Cryptocurrency

What is the difference between cryptocurrency and fiat currency?

Cryptocurrency vs. Fiat Currency

Fiat currency and cryptocurrency are two fundamentally different types of money.

Fiat Currency
* Centralized control: Issued and regulated by governments or central banks.
* Physical and digital forms: Can exist as physical banknotes and coins, as well as digital representations in bank accounts.
* Value backed by government: Its value is derived from the trust in the issuing government and its economy.
* Subject to inflation: Governments can increase the money supply, leading to potential inflation.
* Intermediaries: Transactions often involve intermediaries like banks.

Cryptocurrency
* Decentralized: Not controlled by any government or central authority; operates on a peer-to-peer network.
* Digital only: Exists solely in digital form.
* Value based on technology and market: Its value is derived from its underlying technology (blockchain) and market demand.
* Limited supply: Many cryptocurrencies have a capped supply, making them potentially resistant to inflation.
* No intermediaries: Transactions occur directly between users without the need for banks.

In essence:
* Fiat currency is traditional money backed by a government.
* Cryptocurrency is digital money based on blockchain technology.

Would you like to learn more about a specific aspect of cryptocurrencies or fiat currencies?

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