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Ever since the world started to embrace crypto, one begins to wonder what the journey of moving from fiat currencies to cryptocurrencies looked like. If you’re unfamiliar with the specifics of what makes a currency a fiat currency, stick around and see how the world came to adopt this decentralized way of life.
So, what exactly is fiat or a fiat currency?
A fiat is an official bill, ordinance, or decree, in simpler words. Thus, a currency created by a government order is called a fiat currency. This currency is created and controlled by the government, which means that the value of these currencies is determined based on what the government says it’s valued at.
Of course, fiat currencies weren’t always in the form of bills that we now use. In the earlier days, coins and various types of metals like silver and gold were fiat currencies, and even before that, the barter system was the main form of currency. Up until 1971, the gold standard was used to determine the value of a country’s currency.
This means that the paper bills the government issued could be transferred to gold using a fixed exchange rate. The gold standard was shut down due to the lack of flexibility this system offered. So, the fiat currencies, aka bills, weren’t valued in gold anymore, and after 1971, you couldn’t just go in and redeem gold in exchange for bills. So, it seems fiat money is quite a standardised and safe asset, right?
Well, not exactly. Fiat currencies can crash if the value of the country’s currency falls, and another adversary of fiat money is economic disruption. Even the slightest disruption in the country’s economic sector can cause fiat currencies to lose their value and become a risk more than an asset. So, even if fiat money is backed by the government, it can still lose its value in case of any disruption. Another concern about fiat money is that it is created by the government, regulated by the government, and essentially valued by the government, so you have no control over fiat money.
Enter crypto
A digital form of currency that is owned by no one and controlled by no one! Most of the cryptocurrencies we use are based on blockchain technology which means it is encrypted, secure, and completely anonymous. All of which translates to the fact that crypto cannot be controlled by governments or any entity for that matter.
Crypto offers a wide range of benefits to its users, and it is considered a revolutionary technology that is rapidly shaping up to be the future of the world’s financial system. The versatility of this digital currency allows it to be used anywhere around the world for anything. The best part is it doesn’t need a government or cooperation to back it up. So, are governments realizing the importance of adopting crypto in their financial systems?
Yes, they are. Most governments have worked on several laws and policies to integrate crypto as an ‘official currency,’ and it is actually working! Government officials have realized how important crypto is to the future of the world’s financial system, and around the world, crypto is becoming an official currency. El Salvador, for instance, was among the first nations who adopted Bitcoin as a legal tender, and this was way back in the September of 2021. Since then, this crypto adoption has started worldwide at a rapid pace, and it is only expected to become more common!
There’s no doubt about the fact that decentralized currencies are the future of our financial systems. They’re flexible, secure, and uncontrolled. All of these properties make crypto a preferable currency over traditional fiat ones. At this stage, you might be wondering where you can securely purchase crypto from. Well, this is something you have to be cautious about; you should only place your trust in premium crypto exchange platforms that are reputable and offer a secure exchange process, like Voltcoins.
Crypto is the future of our world’s financial system; ensure that you partner with a trusted platform to manage your crypto exchange! Voltcoins is a trusted and highly reputable crypto-exchange platform that offers a wide range of cryptocurrencies to buy from. You can buy Bitcoin (BTC), Ethereum (ETH), LiteCoin (LTC), and Tether (USD) using Voltcoins’ secure crypto exchange service. Users have the option of picking from three different payment methods. These include credit card payments, bank wire transfers, and Interac. Voltcoins sets itself apart from the competition by offering a blistering fast KYC process and seamless transactions that are completely secure! Place your crypto order with Voltcoins now!