Elucidating FIAT Currency

Fiat currency comes devoid of any inherent value unless recognized by law or a government regulatory body as money.

Fiat currency examples:

• United States Dollar (USD),
• Bank Name
• Account Number
• Routing No/ IFSC Code/ IBAN No

Introducing Cryptocurrencies

Cryptocurrencies are digital assets that enable peer-to-peer transactions financial and otherwise, along with smart contract execution on a decentralized network online. The first-ever crypto transaction was successfully conducted by deciphering the “double-spend” problem via programming and advanced cryptography. While Bitcoin was the first cryptocurrency, today, there are over 20,000 cryptocurrencies circulating the world. There are over 430 million crypto holders worldwide.

Blockchain

Cryptocurrency transactions are recorded on public DLTs like ‘blockchains’. It is a one-of-a-kind digital currency that does not require an intermediary to process transactions from one to another.

Nodes

You cannot move cryptocurrency from one place to another like fiat while sending/receiving. Post-transaction it’s the ownership of the digital asset that changes on the specific blockchain. It stores in the globally spread nodes. Cryptography adds security to these nodes. Moreover, it allows anyone to run the network, and grants access to the right resources.

Tokens / Digital Currency

However, some digital assets run on top of another blockchain network. These are known as tokens.

Currency Wallets

Cryptocurrencies don’t have a physical storage location. Moreover, there are virtual wallets that secure the cryptographic keys required to access digital assets on a blockchain.

Confirmation

Before crypto credits or deposits, it requires multiple confirmations. Therefore, to ensure zero chances of sending the amount more than once.

Privacy

Blockchain networks are public. Thereafter, cryptos or digital assets are pseudo-anonymous. Moreover, cryptocurrencies strive to uphold and enhance user privacy, with some focusing on just that specifically.

Summary

Cryptocurrency aka digital assets, is a globally available financial ledger. Bitcoin (BTC), and Ethereum (ETH) as some of the most prominent ones with numerous others available.