Investing in cryptocurrency vs. investing in fiat money
Trading currency and cryptocurrency are co-existing nowadays. Therefore, the strong need in comparing traditional currencies and Bitcoin has appeared. When it comes to comparing Bitcoin and USD, in many ways these two types of currencies are similar: both are recognized and valuable and this value can be changed according to market variables, both can be used to buy things. Nonetheless, this article will give you clear explanation and perspective which one is a better Investment.
The most important factors to compare Bitcoin and USD will be liquidity, investment, and stability.
The U.S. Dollar is more liquid, because it is the world's reserve currency, it is the most common and widely accepted currency. Bitcoin is fairly new, that's why it is less respected and used. Unlike most traditional currencies, however, Bitcoin is not bound to an institution or country. It means that Bitcoin is in a sense an international currency. People all over the world, from any class or country can use it for free, instant and easy exchanges, without the need for intermediary bodies like banks, merchant accounts or payment gateways. Bitcoin’s purpose is to get around the disadvantages of trading in traditional currencies. In a way it is a throwback to a purer form of trade, as Bitcoin also has some common features with gold: it is difficult to produce, it needs to have limited supply, it needs to be recognized.
As a speculative investment, Bitcoin would be a better route compared to the U.S. Dollar. Real world investment, in general, is a difficult process. Not just because of the legislation rules. While actual art of investing becomes a skill learnt in time, gaining entry into the world of buying and selling is far more challenging. Investing in crypto-currency can offer a solution to those real world problems. Crypto-currencies offer more potential for investors to get involved as barriers to entry are far lower than with fiat currency investing. Moreover U.S. Dollar fluctuates so the return on an investment is very minimal unless you invest huge amounts of capital.
The stability is something must be closely looked at because of the continuing changes in the currency market. The U.S. Dollar is less volatile than Bitcoin due to the U.S. Dollar losing almost all of its purchasing power at an alarming rate since 1900. The Bitcoin has not seen a very big growth spark, but since its introduction in January 2009, it has remained stable.
Investing in USD face serious competition from crypto-currency investors over the years to come. The old age investing method may begin to suffer. Ultimately, each one have advantages and all can work differently for individuals during different transactions. In the future, hopefully there will become a system where both of these currencies and others can co-exist with each other to create the best results for the world as a whole.
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