To a person inexperienced in the field of cryptocurrency and mining , at first glance, it may seem that cryptocurrency is no different from ordinary money, which each of us uses daily to pay bills, products, and anything else. But this is a common misconception that has nothing to do with reality.
Cryptocurrency is not real money
Let's start with the fact that cryptocurrency belongs to the category of digital or virtual currencies and has no physical expression. Its unit is a coin, which is encrypted information protected from copying. Thus, the cryptocurrency is reliably protected from fakes. However, this is far from its only difference from conventional currencies. Cryptocurrency cannot be classified as money also because it does not perform their main functions - that is, it is not a unit of account, a store of value and a generally accepted means of payment. Another distinctive feature of the cryptocurrency is that there are no intermediaries in the face of banks and payment systems in transactions with its use. Such transactions are called peer-to-peer and take place directly between counterparties. This approach allows to reduce transaction costs and their speed.
If we take the ruble as an example of a common currency, then it must be accepted to pay for goods or services throughout Russia. It is also a unit of account, since the cost of all goods is indicated in rubles. And if you keep rubles in your account for a long time, then most likely they will not depreciate in a month, since the purchasing power of money, even during global crises, remains at a level predictable for economists.
All of the above cannot be said about cryptocurrencies. They are extremely volatile: their rate changes several times a day, and it is simply impossible to make even an approximate forecast in relation to them for a long time. Their fundamental structure is fundamentally different from the concept of how ordinary money works. The price of a cryptocurrency is determined by supply and demand. Therefore, it is not uncommon for the value of a coin to change significantly in just a few minutes.
How is cryptocurrency different from money?
Differences between cryptocurrency and money are most clearly manifested in the following parameters:
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Regulation. Regular currencies are regulated by banks, while bank transfers can be tracked by security services and the government. Cryptocurrency, in turn, does not have a single control center, and coins cannot be fully decrypted. Therefore, third parties do not have access to transactions;
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Volatility. As mentioned above, the cryptocurrency is not regulated, and therefore its rate is constantly changing. While the rate of ordinary currencies is reliably controlled by the state;
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The number of transactions. Of course, regular currencies are used much more often than cryptocurrencies;
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Safety. Cases where attackers managed to hack into a mobile bank and steal the funds on the account occur almost daily. With bitcoin, it is almost impossible to repeat this;
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Confidentiality. Even experienced hackers could not find out information about the owner of bitcoin. While bank transfer data often end up on the network as a result of hacks and hacker attacks.
The use of cryptocurrencies in comparison with conventional money has both pros and cons. The unconditional advantages include its anonymity, reliability, no commission for transfers, the inability to freeze an account or withdraw cryptocurrency by a third party, stability and independence from inflation.
If we talk about the shortcomings of cryptocurrency, then they are very serious. For example, in addition to the volatility already mentioned above, there are huge difficulties in controlling coin transfers, since no supervisory authorities have the ability to track this process. We must not forget about the risk of a ban on cryptocurrency - many states are watching the development of the cryptocurrency market with caution, because they cannot regulate it and take it under total control.
Despite the rapid development of the cryptocurrency market, it is still infinitely far from total distribution. Most people are quite conservative and wary of anything new, especially when it comes to their money and savings. Therefore, a certain skepticism regarding cryptocurrency as an alternative to conventional money is predictable and understandable. But if you feel the strength to try your hand at cryptocurrency mining, go to the site - our managers will answer all your questions and help you choose the right hardware.
