Carpe Diem. Carpe Stablecoin! Your source of information about cryptocurrency, stablecoins and the new Facebook currency.
Author: Muhammad Abdullah
M. Abdullah Murad is an Author, a Seasoned Writer, and a Tech Enthusiast with expertise in Entrepreneurship, Google Analytics, SEO, and SMB marketing. He specializes in Cryptocurrency, Finance, Real estate, and Technology with 4 years of practical experience in Digital marketing.
Cryptocurrencies are not an alien concept anymore. Several crypto investors are always looking to put something in the bucket of the digital currency world.
However, volatility has always been linked with the crypto world, but now things are changing around — a piece of great news for all the crypto enthusiasts out there. A new cryptocurrency that gets into the eyes that might turn the tables another way around is called Safemoon.
Let me ask you a question if there is something most essential to you, what would that be? Your phone, right? And what if you can mine cryptocurrency on a phone?
Yes, it is possible to mine cryptocurrency on a phone, but there are numerous problems due to ineffective software and graphical processing. Also, mining cryptocurrency on the phone would never be as impressive as on a traditional mining rig. But you can mine and earn some extra coins.
From the last year, the crypto-world is taking a slight drift. There was a sudden drop in the market, which partially crushed most of the crypto-enthusiasts. However, as the market is getting back, Ethereum has taken the spotlight.
Even though Ethereum and Bitcoin are the most popular cryptocurrency and works on a similar blockchain, but there are many differences come along.
So, the question that pops in mind is how and why Ethereum is popular, and what is the difference between Ethereum and Bitcoin? And clear up that space; we are here to help.
Difference Between Ethereum And Bitcoin
Ethereum and Bitcoin get toe-to-toe. When we look at the similarities, there are several, such as both use distributed ledgers and are decentralized, meaning not issued by any authority.
Bitcoin is a cryptocurrency that can do one thing perfectly, but Ethereum is like an intelligent platform that can go a long way while keeping decentralized finances in consideration.
However, If we look at the differences, there are several, which are as follows.
1. Smart Contracts
Smart contracts on Ethereum are something that is one of the significant differences. It is a set of codes that run on the Ethereum blockchain, which allows you to run decentralized applications or dapps.
Consider these dapps as something similar to your phone applications, but they aren’t controlled by any authority, which gives you privacy in your financial decisions.
2. Increased Transaction Speed
Surprisingly the transaction speed of Ethereum is slightly more than Bitcoin. Ethereum can process 20 transactions in a second with a confirmation time of 5 minutes. While Ethereum 2.0 can process 10,000 transactions in a second.
3. Improved Security And Anonymity
Bitcoin is in business since 2009, but Ethereum came into the market in 2015. Since it came after Bitcoin, they tried to cover all the aspects of Bitcoin. Also, the Bitcoin network doesn’t send Bitcoins.
Instead, it secures data with the protocols of POP (Proof of Proof) and POE (Proof of Existence), which is why it is more secure and anonymous than Bitcoin.
Final Remarks
To sum it up, Ethereum is one of the popular cryptocurrencies that have significant progress over time. People not only use it as a medium of payment instead, but it is also quite popular within the business world, which is why most of the NFTs run on Ethereum.
Diem is also getting a lot of eyes from the people around if you like to see our guide on Diem vs. Bitcoin to understand the key differences.
Hopefully, this post would clarify all the questions related to Ethereum and the key differences with Bitcoin, but if you need anything else, drop by the comment section below, and we’ll get back to you right away.
Blockchain is a decentralized and distributed ledger that keeps all the cryptography information distributed across the network of computers connected to the blockchain technology.
Additionally, there are different blocks on the chain that represents various transaction information. When a new transaction occurs from anywhere in the world, the record is added to the participant’s ledger.
A network of Blockchain
Blockchain Technology For Beginners
We know it can be a little complex for beginners to understand the whole blockchain, but don’t worry; we will help you out.
In simple terms, you can consider blockchain as a bank, where everyone can send money without any complications of authorities keeping an eye on you and without any extra bank fees.
Meaning with blockchain, you are your own bank, and you have the authority over your money, and you can perform transactions easily, just like you send emails.
However, it is not that simple as some complex things might seem a little tricky at first, but as you get the hang of it, things would be much straightforward.
The process of Blockchain
Blockchain works on blockchain technology, which is an unchangeable and unhackable medium to record your transactions.
On average, there are almost 500 different bitcoin transactions along with the cryptographic information on each “block” of a blockchain.
The information on these blocks contains the links to the blocks and the information of previous blocks and forms of chain that would be used to proceed with the transactions, Thus termed as the blockchain.
Types Of Blockchain Technology
To understand blockchain in a much better way, you should learn the four different types of blockchains.
Private Blockchains
Public Blockchains
Hybrid Blockchains
Sidechains
1. Private Blockchains
The blockchains that are restricted and are not accessible by everyone are called private blockchains. People who want to join such blockchains have to take permission from the system administrator.
A single entity holds these blockchains, and they are centralized.
Ripple (XRP) is a common example of private blockchain.
2. Public Blockchains
The blockchains that don’t require any permission and anyone can access them with their will are called public blockchains.
These are decentralized, and anyone can request validation for their transaction from miners, who earn rewards for verifying the transaction.
A sidechain is a type of blockchain that works along with the main blockchain. It usually helps in the transfer of information from one chain to another between two blockchains to improve efficiency.
Blockchain technology is a little tough to understand at first, but it is totally worth it afterward. We hope this post would be helpful for your understanding, and now your questions related to blockchain are answered.
Apart from Ethereum and Bitcoin, there is a new form of cryptocurrency called stablecoins, which are also getting a lot of attention.
In case we missed something. You are welcome to ask in the comment section below.
Crypto mining is taking around the world. Everyone admires earning good passive income, right? This makes mining the best passive earning source.
But hey, can I mine bitcoin on PS5? This is the question that pops in mind for everyone who has the new PS5.
Don’t worry. I am here to explain all about crypto mining on PS5, or is it even possible to mine bitcoin on PS5? If it is, then how can you do it.
What Is Bitcoin Mining?
Bitcoin mining is a process to mint fresh bitcoins by solving complex mathematical equations with computational energy.
This process is used to verify the bitcoin transactions around the globe, and as a reward, the bitcoins are minted for the miner.
Is It Even Possible To Mine Bitcoin On PS5?
Most people out there with the latest Sony PS5 get this question whether they can mine Bitcoin on PS5 or not?
Yes, it is possible to mine bitcoin using PS5 by installing custom firmware, which was used in the PS4.
You might have seen this claim made by a Chinese team that they have successfully mined bitcoin on PS5 at 99MH/s, which is insane and impossible.
Chinese group claiming to mine cryptocurrency at 99MH/s
The QR code in the image, which when scanned says, “There is no such software, hahaha,” in Chinese, assuring that this image and this claim are not legit.
In another video of Lewis Hilsenteger, the famous unbox therapy guy explains how this claim is fake. If PS5 could mine bitcoin at 99MH/s, it would be way much expensive than even two thousand dollars.
Lewis Hilsenteger explaining the insane HOAX of crypto mining on PS5.
How Does Crypto Mining On PS5 Works?
To understand how crypto mining on PS5 works, you have to understand how mining works at all, what the requirements are, and what do you need to begin, which you can do by reading our post about how you can mine bitcoin at home.
With PS5 on board, you don’t need an ASIC or GPU. You already have that with PS5. However, you can’t mine bitcoin with basic PS5 firmware, and you have to install a customized firmware, preferably Linux.
Next, you have to install the mining software, preferably NiceHash. And that is all you need to do to start mining bitcoin on a PS5.
What Are The Drawbacks To Mine Bitcoin On PS5?
Crypto mining on a PS5 has certain drawbacks, which you should learn before starting mining.
Low Hash Rate
The hash rate is the speed at which fresh coins are minted. In the case of PS5, you might not get a good hash rate. Hence, not a lot of bitcoins.
Since AMD Radeon RX 6900 XT is one of the latest graphic cards, and it sits around 60MH/s, which means that even the maximum potential of PS5 isn’t going to give you a significant hash rate.
More Power Consumption
A PS5 normally doesn’t consume a lot of power, and it sits around 200W, but in the case of mining bitcoin, you will probably have to run it for several hours at maximum processing, which is going to take a lot of power.
Unfortunately, you will not be able to earn enough to pay for the electricity costs. Although an ASIC miner consumes much more power than PS5, you will get 90TH/s, which is much better than the Playstation 5.
High Maintenance Cost
PS5 is an expensive device that can cost you a fortune to buy in the first place, and with consistent processing, it might get some wear and tear.
According to Venturebeat, the parts of PlayStation 5 alone costs $450, which means minor repairing can cost from $100 to $200 on an average.
Bottom Line
Now coming down to the last straw, crypto mining on a PS5 might seems like a big thing but believe me, mining bitcoin on a PlayStation 5 might not be the best idea.
If you are interested in mining, you should go with the right equipment, such as an ASIC rig. Since a PS5 is a gaming console, it would go a long way with gaming.
These are the reasons why most PS5 owners avoid any kind of mining on their devices. But I hope that this post would have answered your question. If you need any help, don’t forget to comment down, and we’ll definitely get back to you.
Bitcoin has been in the eyes of people for a while now. Since its price went soaring, enough people have to think of it as a financial resource. Now that prices have significantly reduced since the last heights, people want to get into the Bitcoin business, which makes bitcoin mining quite anticipating.
Now here is the question of how can you mine Bitcoin at home in 2022? Well, the first thing that you need is powerful hardware, then comes the right software, and at last, you need adequate amounts of power.
However, there is something more than just your computer generating some extra bucks. What does the mining of bitcoin mean, what do you need to start your mining setup, and what are the drawbacks of mining Bitcoin at home?
All that and other valuable information are coming below. Therefore, we suggest you read this post till the end to understand everything about mining Bitcoin at home.
What Does Mining Bitcoin Mean?
Bitcoin mining is a process in which the computer solves complex algorithms and mathematical problems to verify the Bitcoin transactions. In return, you get to receive Bitcoins as a reward, along with the transaction fees.
How Does Bitcoin Mining Work?
Mining bitcoin is not a piece of cake nowadays. There were times when you could mint several bitcoin with a regular computer, but as more people are getting into mining, things are changing.
Now the problems are getting more complex, and it requires massive processing power to verify one block that contains 6.25 Bitcoins today. But in most cases, these blocks are further divided into more than one miner. We’ll come to that part later.
Also, this reward is reduced to half after every 210,000 blocks, meaning almost 4 years. This process is called halving. This process helps to keep up with the inflation and forced algorithmically.
However, the blocks are the reward of the verified transaction from blockchain, and blockchain is a decentralized ledger that controls the transactions and mining of fresh bitcoins. Because of all these complexities, mining bitcoin at home isn’t that easy, but you can do it with the right tools.
What Do I Need To Mine Bitcoin At Home?
Mining bitcoin at home can be a daunting task, but it is possible with the right tools on board. Here is a list of all the things that you need to mine bitcoin at home.
A Mining Rig Or ASIC
Powerful GPUs
Mining Software
A Bitcoin Wallet
Mining Pool
Start Mining =)
A Mining Rig Or ASIC Rig Or Normal Computer
To mine your bitcoin at home, an essential component that you need is a mining rig. In the past, normal computers were used, which were replaced by graphic cards later.
Now that the mining world has changed, and you will not earn anything from them (even if you do, it would be very little.) Hence, mining rigs come into play.
A mining rig or ASIC (application-specific integrated chips) is a specific hardware device made specifically for mining bitcoin or any other cryptocurrency with the same algorithm.
ASIC rigs are much efficient as they mine more bitcoin even at home with less energy, but they can be quite expensive. Powerful rigs mine bitcoin at 14 terahashes per second (meaning 1012 attempts to solve a block per second.)
In case you don’t afford a mining rig, you can also buy a computer, which sounds more promising to mine bitcoin at home. However, this can make things a bit tough. As problems are getting more complex each day, a simple desktop computer can be daunting hardware.
In fact, with a computer, you also have to get a decent graphics card that can cost a fortune in the present time. So, we think investing a little more in a mining rig is still a better decision to mine bitcoin at home.
The Right Mining Software
Now that you have your hardware on your side, it is time to select the component that is going to join you with the blockchain and the mining world out there. Yes, we are talking about the mining client to run on your mining rig or computer so you can mine bitcoin at home.
Since it is almost impossible to mine a hole block as an individual, one of the main tasks of the mining software is to combine the power of several miners to a mining pool (we’ll get back to that later) and distribute the work.
Mining software provides work to miners, collects and keeps the record of successfully completed results. Apart from this main job, this mining software completely shows the basic stats of the mining process, such as the temperature, cooling, average mining speed, and hash rate.
There is plenty of mining software that you can choose from in the market, but most experts recommend NiceHash for all beginners because of its user-friendly interface.
Furthermore, it mines multiple different cryptocurrencies and automatically chooses the right algorithms to mine bitcoins most profitably. All you have to do is to download the client and provide the necessary information and start mining.
NiceHash interface
A Bitcoin Wallet
Now that you have got basically everything you need to mine bitcoin at home, you might be wondering where you would keep all those coins. This is where a bitcoin wallet comes in handy.
A bitcoin wallet is the component of mining where you store, manipulate, and manage your bitcoin addresses and the bitcoin within.
Since bitcoins are stored in the blockchain, but there are public and private keys for you to manage your bitcoin activities.
If you want to receive bitcoin from someone, your public key is responsible, and it can be traced with all the transactions that have gone through it.
However, private key act as a secure network and use to send off transactions. If you end up losing it, all your bitcoins that are stored in it will be lost forever. Generally, there are multiple wallets ranging from software ones to hardware and paper wallets. Each of them has its pros and cons.
For miners who are just starting out should choose a software wallet that is easy to manage, and anyone can set them up pretty quickly.
We suggest using Bitcoin core, and if you need one that can manage multiple currencies, you can also go for Exodus, but it can be a little complex for beginners.
Bitcoin core interface
Mining Pool
Even with the best hardware on board, it is not that easy to mine bitcoin in today’s date. Since there is a huge number of people trying to mine bitcoins, a huge amount of energy is required to mine one Block. So, chances are high you never make it if you try it on your own. Thus, a mining pool can be a solution.
Mining pools are a group of miners who combine their hardware to mine bitcoin much quicker than mining individually, and as a result, the reward of bitcoin is less but stable, which is divided among the miners.
Additionally, members have to pay some extra fees to the pool operator, and usually, it is around 0 to 2% of the received reward.
Start Mining
That would be all that you need to mine bitcoin at home. You can plug in your hardware, fill in the required information, join a mining pool if you like, and start your mining journey.
Tip: If you want to mine bitcoins profitably, you should keep an eye on the crypto world. It is changing every day, and you definitely wouldn’t like to miss something that can help you working profitable right away.
How Much Energy Does Bitcoin Mining Use?
In the early times, bitcoin mining was quite energy-efficient, and minimum power was enough to do the job. However, now even with large mining power, miners are not able to make a stable income.
Bitcoin mining use almost 120 Terawatt Hours (Twh) annually, according to the University of Cambridge.
Before you head towards mining bitcoin at home, there are few drawbacks that you should be aware of.
It might cost you more than you earn:
Previously, it was pretty simple to plug in your computer and start earning bitcoins. But now, one might have to pay more on the expenses than he actually mines bitcoin at home.
Here is the graph that shows a comparison between the profit and cost expense of mining bitcoin.
Mining profitability by MarketWatch
High electricity costs:
If you want to mine, you should live in a region where you have low electricity costs to start with.
In some regions, the electricity bills don’t remain stable at one price. After a certain amount used in a month, the governments apply a specific extra tax on the billings.
Therefore, you might have to pay the extra cost of tax even though your electricity usage (apart from bitcoin mining) isn’t that much on a monthly basis.
Repairing costs on hardware:
You might be familiar that in residential areas, the electricity is supplied in single-phase or two-phase meters, which provide 120 volts or 240 volts respectively.
However, commercially three-phase meters are used, which provides more electrical voltage. This means that with less voltage in the pipeline, high-end machines are prone to fusing and require maintenance, which can put a load on your pocket.
Conclusion
It is good to see you down here. We hope you will like this interesting piece of content, and you will follow our tips and tricks to mine bitcoin at home if you decide to.
If you think we might have left something and you need to get information on anything else, you are welcome to reach out in the comment section below.
Bitcoin is one of the most anticipating topics over the internet nowadays. Its price kept rising day by day, and suddenly the Elon Musk, CEO of Tesla, tweets that they aren’t going to proceed with the transactions via Bitcoin anymore because it is unsafe for the environment. And the market drops down by 17% afterward. Leaving all the crypto-enthusiasts with a question that is Bitcoin bad for the environment? Stay with us, and we are going to narrow it down for you.
Well, the answer to this question is Yes and No at the same time. If we are concerned with Bitcoin in general, its transactions, and trading aspects, it might not be that bad for the environment. But when we look after the mining setups, that is a straight yes.
Environmentalists have been saying out loud for a while now that carbon emissions from bitcoin mining can be hazardous. It doesn’t only use a lot of electricity, but also it can jeopardize the climate in which we are living.
What is bitcoin mining, and how does it work?
Bitcoin mining is a process for minting new bitcoins, which involves using computers to solve complex mathematical algorithms or problems. The decentralized cryptocurrencies require this software to mine coins. If you want to learn more about centralization vs decentralization, click here. The software that bitcoin miners use takes an average of 10 minutes to solve these complex problems and process with a block.
However, you might be wondering how the environment is unsafe with this process. Well, in the world of limited resources and alarming climatic conditions, a huge chunk of electricity is used by miners to mine these blocks and verify transactions. If we look after the energy-consuming ratios of Bitcoin, the major proportion goes to the mining process. As a reward, the minors receive 6.25 bitcoins per block, which are worth more than three hundred thousand dollars currently.
But this doesn’t end here; there is a dark side to the story, as the electricity that is being used by the miners is created with fossil fuels. If the bitcoin prices are increased more, more incentives are given to the miners in terms of fresh coins. Hence, more coins would be minted, resulting in large amounts of electricity consumption.
China has the largest bitcoin mining facilities till today, and unfortunately, the country depends on coal-based power. According to studies in April 2020, China has more than 75% of Bitcoin blockchain operations around the world. Therefore, some rural areas in China have been considered as the ideal destination for Bitcoin mining, mainly because of the cheaper electricity and a significant area for bitcoin pool construction (joint setup for more than one bitcoin miner combining their resources over a network).
How much energy does bitcoin mining consume?
Now that you know what’s Bitcoin mining is, you might be wondering how much energy Bitcoin mining consumes and how it is bad for the environment, right? According to an estimate by the University of Cambridge, bitcoin mining consumes more than 120 Terawatt Hours (Twh) annually.
Such value is even more than the countries like Malaysia, Argentina, or Sweden. The report also stated that if a bitcoin was a country, it would be ranked among the top 30 energy consumers in the world. Isn’t that shocking?
Furthermore, another website, Digiconomist, estimated that a single bitcoin transaction uses a similar amount of electricity that the average American household consumes in a month. Also, it is responsible for a million times more carbon emissions than the single Visa transaction. In a time when the planet needs to cut off its carbon emissions, does it make sense to increase them? The answer would be a straight no. but still, we are here in promoting cryptocurrency.
What does Elon Musk say about cryptocurrency?
Elon Musk, CEO of Tesla, one of the richest men alive, and a famous environmentalist who is known for his iconic projects to save the environment. Has repeatedly appreciated the cryptocurrency. On March 24, he tweeted that you can buy a Tesla with the Bitcoin, which strikes a chord for all the crypto-enthusiasts that he is supporting Bitcoin.
Tesla is using only internal & open source software & operates Bitcoin nodes directly.
Bitcoin paid to Tesla will be retained as Bitcoin, not converted to fiat currency.
But soon after, on May 13, he quotes that Tesla is not going to accept payments via Bitcoin because it is bad for the environment. Since then, the prices for not only Bitcoin but also Ethereum have been majorly affected.
However, Elon Musk keeps on encouraging Dogecoin in his tweets. The coin, which was created as a spoof, has now increased in value by eight thousand percent. The credit goes to the memes for this coin, and also to Elon Musk for boosterish tweets.
Glad to see you down here. Now that you know, Bitcoin has some benefits, but it can be hazardous to the environment you’re living in. Now it’s up to you, either you want to support bitcoin mining, or you want to live in a better environment.
However, it doesn’t mean cryptocurrency should be discontinued. Instead, some energy resources should be used in a controlled manner that is renewable and cost-effective to improve the environment.
We hope this post has answered the question that is bitcoin bad for the environment or not. If you didn’t get what you were looking for, you are welcome to reach out in the comment section below. Our expert team would love to help you out with everything possible.
You have heard a lot about cryptocurrency but never thought about the opposite, fiat currency system, in which you are living right now? No doubt cryptocurrency is the next big thing in the business world, but it still has a long way to compete with fiat currency.
In particular, it isn’t just about using some bucks to buy goods and services. It has several other factors that you should know, its advantages, disadvantages, and what makes it the most vital system. As a matter of fact, this article is all about the information that you need. Our expert analysts have done their research and came out with some pieces of useful information and examples that shall help you in your future to understand how the system of fiat money practically works.
Table of contents
What does fiat mean?
What is fiat currency?
History of fiat currency.
Examples of fiat currency
How does fiat currency work?
Benefits and drawbacks of the fiat currency system
Fiat money vs. Commodity money (the gold standard)
Fiat currency vs. cryptocurrency
What is the future of fiat currency?
Conclusion
What does fiat mean?
To give you a better understanding of fiat currency, we have to explain what does the word “fiat” means. Surprisingly, the word fiat comes from Latin, which means “let it be done” or “it shall be.” However, in some pieces of literature, fiat is also termed as “fiduciary,” which means “involving trust.” fiat currency goes by several other names such as fiat monetary system, fiduciary money, and simply, fiat money or fiat currency.
What is fiat currency?
Basically: The paper money we all know – like Dollar, Euro, Yuan, Rupia…
Now, the big question arises, what is actually a fiat currency? Well, it is the money that the government issues, and it isn’t backed by any reserves, such as gold or silver. Instead, this currency is pegged with the trust of the government, and its value is derived from the connection between supply and demand.
In other words, you can consider fiat money as a legal tender that has a value issued by the government, and most countries around the world use this legal tender as their primary mode of payment to buy goods and services.
Furthermore, the stability of the fiat money comes from the issuing government. On the other hand, we have commodity money that changes its value according to the reserves, which are backing it up. In further sections, we shall relate both of them in detail.
History of fiat currency
The fiat monetary system didn’t start right away; there were a series of events that lead our lives to revolve around this system. Undoubtedly, we have seen this system for a long time, but its story is quite fabulous. However, China was the first country to neglect the gold standard and use their specific paper money as a medium to buy goods.
Firstly, these paper currency was only exchangeable with gold, silver, and silk, but later in the era of Kublai Khan, a well-defined fiat currency system that came in the 13th century was presented. As a matter of fact, historians believe that this currency was the root cause of the Mongol Empire’s downfall due to excessive spending that leads to hyperinflation.
After China, the fiduciary system made its way towards Europe in the 17th century. Later on, it spread through Spain, Sweden, and the Netherlands. Unfortunately, the fiat currency system was a failure in Sweden, and they ultimately switched to the Silver standard.
Similarly, New France in Canada, the American Colonies, and then the U.S. Government also tried to use the fiat money, but overall ended with some mixed results. Furthermore, in the 20th century, the U.S. government was back to commodity-based currency on a limited basis.
If you are wondering about fiat currency’s life examples for a better understanding, don’t worry, we are here to help you out. Every physical currency that a government issues and uses as a mode of payment are a fiat currency. For instance, the dollar, pound sterling, Euro are some common examples of fiat money.
How does fiat currency work?
The proceedings of fiat currency are quite peculiar in nature. Generally, the modes of transactions are backed up by some commodity that maintains the value. Still, in fiat money, the value of the currency increases by the trust of the users and issuing governments.
This paper money enables us to buy the goods and services without exchanging them with other products as in the case of the barter system. Additionally, the purchasing ability of this paper currency provides an edge to expand the business without compromising on the previous equipment.
Therefore, it became an international model of payment, but it doesn’t end here. The value of the fiat currency depends on the demand for the money in the region. Such as how well the government is performing. In case a country experiences political instability, it is more likely to have a fragile currency and inflated prices. Thus, making it harder for people to buy the necessities.
In order to get better performance from the fiat monetary system, the people should believe in their country’s currency as a better medium of payment, along with the governments backing up their money by making it the lawful tender for transactions.
Benefits and drawbacks of the fiat currency system
There is no doubt that the fiat monetary system is an internationally accepted system with certain benefits, but there are some major drawbacks. Do you want to know the disadvantage of this system? Don’t worry; the next section is about the pros and cons of the fiduciary currency system.
Benefits
The Fiat currency system has several benefits for a country’s economy. With that said, some factors support this system, such as Scarcity, which maintains the value of everything.
To understand it better, consider any currency pegged with some commodity — its price would be depending upon the commodities backing it up. This gives lesser control to the government, and the value of the currency might not meet the demands.
While in the case of paper money, the Central bank of the country has direct control over the printing of fresh currency. This way, the government can control the currency notes they want to revolve in the system depending upon the economy. In case of inflation, they can always pull out the currency and store it in a vault.
Furthermore, the country will be free to look for more commodities to put in the system. This means that governments can individually manage the liquidity, interest rates, and credit supplyof a currency with much more stability.
For instance, the U.S. prevented their financial system and global economy from the Global financial crisis in 2008-2009 only by controlling the Federal Reserves.
Drawbacks
Although there are several benefits of the fiat monetary system, it would be wrong not to enlighten you with thedisadvantages of this system. So, here are some of the cons of the fiat currency system.
If a country isn’t performing well economically or with undisciplined governments, the fiat currency system can backfire. For instance, some unlawful authorities mint a load of currency to circulate in the country. What do you think would be the outcome? Definitely, the country has to face inflation.
If things get pretty much out of hand, the outcome might be even more devastating, such as hyperinflation. Unfortunately, this happened with Germany after World War I and recently with Zimbabwe and Bolivia.
Fiat money vs. Commodity money (the gold standard)
In order to relate fiat money with commodity money, you have to understand what commodity money means. Actually, it is a system in which any precious metals (mostly gold, hence called gold standard) or valuable commodities are used as a medium of payment.
Now, this system limits the government to print the bills to the amount of the commodity they have in reserve. In fact, all the currency bills are backed by the government’s commodity. In such a system, the government can only print further money if they get to hold more valuables.
Clearly, this means that government isn’t authoritative to print, and the currency is only based on the country’s economic factors. While on the other side of the coin, countries and their central banks have full-fledged control over paper money and use the tools to impact their currency value.
Some people consider the commodity system a plus for their currency’s stability because a physical and existing substance backs it. However, the people who advocate the fiat currency system believe that commodities prices would remain nothing but stable.
In addition to the context, the worth of a currency in the fiat monetary system and the commodity-based system can fluctuate. Still, the good part of fiat currency is that it can give some time to the government to plan in case of an economic emergency.
Fiat currency vs. cryptocurrency
Fiat currency and cryptocurrency are slightly on the same page here, as no commodity back them both, and that’s the only similarity they have. In general, fiat currencies are controlled by the governments and central banks, while no one controls cryptocurrencies. Instead, they are decentralized and work on their own ledger called a blockchain.
Another notable difference comes in the minting of fresh bills. Although cryptocurrencies don’t have a physical state, they are still much limited and short in supply. At the same time, fiat currency is printed by the governments depending upon the needs and economic situation.
Furthermore, the transactions through cryptocurrency are permanent, and the nature of their dispersed ledger (Blockchain) makes it really hard to track them. On the other hand, fiat currency payments are reversible, and authorities can track them with ease. However, the cryptocurrency market is still immature and requires some time to develop.
Therefore, due to the small number of people in the crypto circle, the volatility is pretty much high. To make cryptocurrency stable, the companies are shifting towards stablecoins, which would decrease the volatility and might change cryptocurrency as an international medium of exchange.
What is the future of fiat currency?
Without a doubt, the question about the future of fiat currency isn’t definite. It is something that only time can unfold, but all the competitors of this system, such as commodity-based systems and cryptocurrencies, have their drawbacks.
Apart from drawbacks, the system of cryptocurrency isn’t robust. It has several challenges to overcome still, and there are pretty interesting things developing on a day-to-day basis. Even if fiat money is accepted worldwide, there is a history that proves the vulnerability of fiat currency.
This is the main reason for establishing the bitcoin on the first. The cryptocurrency was never meant to change the transaction system we have. Instead, it was only invented as an alternative to an economic network. Apart from this, we can’t neglect the fact that it has the ability to switch the global mode of payments.
Conclusion
In the end, we hope this article has answered all your queries. You have all the vital information that you need to know about fiat currencies. You won’t be left out of the conversations about the money that we use daily in the future. Further, it’s beneficial to understand the transactions practically in your life.
By going through our vs. sections, you know the other systems that exist along with the fiat currency system. Let us know in the comments which currency system you think is the best and why is it?
Diem scams are getting a lot of attention as the Diem is just around the corner to launch, some organizations and scammers are looking to rip off your money and put it straight into their pockets without giving you anything but a Scam. Undoubtedly, it doesn’t sound good at all but trust us, we don’t want you to fall into a trap.
Although these companies and associations are spreading through their marketing strategies to capture investors through their foolish offers. Therefore, we are here to help you out and protect you from any phishing. Here is a list of the most famous Facebook Diem scamwebsites that you should avoid.
Some known Scam-Sites:
Americanas-pix.com
Buylibracoins.com
Diemassociations.com
Diemcoinproject.com
Diemexchang.xyz
Diemexchange.xyz
Diemfacebook-diem.com
Diemfuture.io
Diemglobal.pro
Diemglobal.to
Diem-global.com
Diemglobalpro.com
Diemlaunch.global
Diemlibre.io
Diemspot.io
Diemtoken.cloud
Diemue.net
Diemvip.site
Diemvip.net
Diemwallet.sale
Diemwallet.world
Diemword.vip
Diemworld.vip
Facebook-diem.net
Fbdiem.org
Fbdiem.io
Facebookdiem.vip
Hotaex.net
Libracash.global
Libra-ico.org
Libranovi.io
Libra-vps.com
Projectdiem.io
Thediemtoken.com
Uplibra.io
Wallet.diemglobal.to
Zuckbucks.cash
And all accounding Subdomains like
diem.facebook-diem.cc
secure.diemwallet.sale
secure. …
diem. …
wallet. …
Some of those are doing a “kinda” legit business by providing other coins, but they are named in a way that people are confused and think they are the official Facebook Diem coin, which they are not.
Simple Rule: If the URL is NOT
Diem.com (ex Libra.org)
Novi.com (ex Calibra.com) or
Facebook.com
and they want to take money from you => it’s a scam.
If you are having trouble with these sites and need further information on Diem, please sign up for our newsletter here:
With this article’s help, we hope you will not get into any problem; to buy Diem, we would like you to know some general rules and regulations. However, don’t trust anyone other than Diem.com (ex Libra.org), Novi.com (ex Calibra.com), Facebook.com, and last but not least, the Diem-central.
As cryptocurrency is getting popular day-by-day, people show a fair amount of interest in them. However, the discussion always rounds about Centralized and Decentralized cryptocurrency exchanges.
So, hold on to that thought; we have decided to address the elephant in the room. Therefore, if you have any queries left about the difference between centralized and decentralized cryptocurrencies? Or which is better? And which crypto exchange should you choose? This is the article that you need.
With that said, we shall begin with an overview of the topics that are supposed to discuss in this article.
What is a cryptocurrency?
What is a cryptocurrency exchange?
Types of cryptocurrency exchange.
What does centralization mean, and how centralized exchange works?
What does decentralization mean, and how decentralized exchange (DEx) works?
Centralized and Decentralized cryptocurrency exchanges: The significant differences.
Future of Centralized and Decentralized exchanges.
Conclusion.
What is a cryptocurrency?
Before we go further, you should know the general idea of cryptocurrency. Supposedly, cryptocurrency is a kind of payment medium that you exchange in terms of services and goods. Similar to the concept of real money, right? But how is it different?
The only thing that differentiates it from real money is that it requires an online ledger that secures the online payments. Now, most companies are working with their cryptocurrencies. You can consider them as chips from casinos.
Subsequently, you have to convert them in exchange for real money to access the products or services you need. Furthermore, the ledger technology on which these cryptocurrencies work is called a blockchain. This ledger protects the value of the real assets that are safe at your end.
What is a cryptocurrency exchange?
To understand the differences between centralized and decentralized cryptocurrency exchanges, you must know what a cryptocurrency exchange is? In simple terms, these are the places where you can buy or sell cryptocurrencies. With that said, there are some unique regulatory rules for every exchange that you should consider. But generally, all of these provide you access to almost every cryptocurrency.
Types of cryptocurrency exchange.
Besides the earlier context, there are 2 types of cryptocurrency exchanges in the market.
Here are the two types of cryptocurrency exchanges.
Centralized cryptocurrency exchange
Decentralized cryptocurrency exchange (DEx)
We shall discuss each of the types in detail in the next sections of this article.
What does centralization mean, and how centralized exchange works?
In order to understand the word centralization, we would like you to have real-life examples that you use every day. There are some systems that you use daily. It doesn’t matter if it’s your social media, your bank, your cab service account, or merely a streaming service, more practically anything you can access on the internet.
Obviously, all of these are controlled by a centralized authority, but what does that mean? Clearly, it means that to transfer your data from one source to another, you have to use a third party as an intermediary on your behalf.
For further explanation, we have to quote the example of Yahoo, which also uses centralized servers. After you hit the button by giving them details; and send it further, your data is part of their centralized servers now.
Suppose you add your friend on Yahoo and send some of your work documents in an email. Before you do that, you have to access your Yahoo account with your data such as name, image, nationality, and date of birth.
It should be noted that when you access Yahoo, you trust them that they aren’t going to expose your data for their benefits. Instead, they will keep your data private and keep it exclusive. However, that isn’t always the case. As a matter of fact, Yahoo was once hacked in 2014 by a group of people who were able to steal millions of accounts and their data.
In particular, how do you think these people could gain access to all the data by hacking only one medium? The answer is pretty simple since Yahoo uses centralized servers, and if hackers were able to get into the center, they could get into the whole picture.
What does decentralization mean, and how decentralized exchange (DEx) works?
As the name indicates itself, it is entirely against the idea of centralization. Firstly, you will be surprised to know that decentralization was possible because of blockchain technology. The first-ever was the Bitcoin blockchain established in 2009 by Satoshi Nakamoto, whose real identity is still unknown.
Further, if you want to send some amounts in a decentralized exchange, the central authority has nothing to do with them. Instead, anyone who wants to be part of the system can connect their device and verify the payments.
Additionally, each device connected in the system is referred to as a “node,” There are hundreds to thousands of nodes operating in a network.
Certainly, this means that if someone attempts to hack the system, he will only be able to hack a single node — while the rest of the nodes keep the blockchain intact without losing any data.
However, the vital thing to remember here is that decentralization is not limited to transactions only. You will be amazed to know that how many vast applications are present nowadays.
Secondly, there is no need for people to show their identities over the internet. You have the edge of logging in and interact in a decentralized system with the aid of private and public keys.
The third thing to keep in mind is that blockchain is neither in the control of any single authority nor by any government in a decentralized system. Instead, the power is fairly divided among the people who want to be part of this system.
With these points in mind, you can understand how it affects society in a better way. It takes control from significant companies and associations and divides them among the ordinary people.
Centralized and Decentralized cryptocurrency exchanges: The significant differences.
In this next section, we will discuss some major factors through which centralized and decentralized cryptocurrency exchanges are differentiated. Moreover, these factors are some pros and cons of one exchange over the other. Sounds interesting, right?
Authority
As you have learned earlier, authority is one of the primary differences between centralized and decentralized cryptocurrency exchanges. However, in the case of a centralized crypto exchange, most of the power belongs to a third party through which you have to proceed further.
On the other hand, we have a decentralized crypto exchange that provides the most control to the user. You are not bound by any third party to proceed on your behalf, which means that your data remains secure at your end.
Since decentralized exchanges provide more authority to their users, they are becoming more and more popular. However, it is also causing the complexity of a platform.
Government support
Government support is one of the factors that you should have in consideration. In the case of a centralized exchange, the government has the higher authority over each individual using that system, so the government supports it.
Secondly, governments can identify the individuals only in a centralized exchange. In contrast, a decentralized business keeps your identity hideous, which is the main reason the governments don’t support such decentralized exchange.
Security
As we have discussed the decentralized cryptocurrency exchange and how it works, you will be pretty sure that it is impossible to hack the whole system. Indeed, this means that a decentralized exchange provides far better protection than a centralized exchange.
If we look in the past, there are many incidents of hacking transactions in a centralized exchange. Although they have developed their systems to offer more security, they can never relate to the safety of the decentralized exchange.
In trading cryptocurrency, there is a significant risk of hackers, but with decentralized systems, that threat comes to an end for good. As a matter of fact, some centralized exchanges offer decentralized accounts to their customers; to keep the users free from any risk of losing transactions.
Regulation
Regulation is one of the essential factors that you should know before choosing the boss here. In the case of centralized crypto exchanges, they are pretty easy to operate. However, they require licenses to process transactions and follow the rules of the regulatory authorities operational in that specific zone.
On the other hand, if we look forward to decentralized exchanges, they don’t need any licenses to operate, but they have different challenges to overcome as well. Thanks to the blockchain technology that is dispersed in the local regions.
Therefore, even if regulatory authorities prohibit decentralized exchange in a particular region, it can still be operational.
Time required
Time is a valuable asset, and it isn’t the same for both exchanges. Do you want to know how? Of course, you do. Well, decentralized platforms are more likely to consume more time than centralized systems. Along with that, you can have an idea that how much time it requires for transactions through blockchain technology (which is decentralized) by a report. According to the report, a decentralized crypto exchange required about 15 seconds to complete a transaction, which is considerably more time than 10 seconds of a centralized cryptocurrency exchange.
Fame
In the present time, we have to say that centralized crypto exchanges are much more famous than decentralized cryptocurrency exchanges. Additionally, these exchanges provide good benefits of having a definitive infrastructure and reliable liquidity, but they came much earlier than decentralized crypto exchange. However, decentralized cryptocurrencies offer some distinctive benefits to their customers, so they are becoming quite famous. Moreover, several companies are launching their decentralized cryptocurrency exchanges (DExes) in the market, for instance, Binance’s DEx.
Charges
Centralized crypto exchanges are expensive than decentralized ones. The main reason is that centralized exchanges have to charge their customers directly. However, the charges that consumers have to pay are mainly on the services they obtain from the exchange.
On the other hand, if you look towards decentralized crypto exchange, they charge 0 to very fewer prices on transactions through their blockchain, which is a plus for most consumers.
Features
If you want to know which exchange offers more features, the answer would probably be centralized cryptocurrency exchanges. If you are a centralized exchange user, you will see that you can access multiple tools, such as margin trading, portfolio management, and other tools for a better trade.
On the other side of the coin, we have decentralized cryptocurrency exchanges that don’t offer such tools to their users. For instance, you get a limit on orders and no offer margin trading. However, we hope that when more platforms join the market, they might provide better facilities.
Liquidity
Liquidity is the ability to transform your valuable assets into readily available cash. As a matter of fact, a centralized cryptocurrency exchange offers you good liquidity over a decentralized exchange.
Do you wonder, why is that? The primary reason is that most people in that market are more likely to invest in similar trends. So an asset has a higher demand than other ones, several sellers would sell it accordingly. Furthermore, there are market makers who add liquidity in a centralized exchange.
On the other half, it will be surprising that decentralized exchanges don’t offer liquidity as much as centralized systems provide. The primary reason behind this is that order matching requires more time in DEx than centralized systems. Other possibilities can be due to low popularity.
Future of Centralized and Decentralized exchanges.
So you have gone through the whole article, you are much familiar with how centralized and decentralized cryptocurrency exchanges work. There are some particular benefits of decentralization, but the question to answer is that in the future, who is going to rule?
Decentralization ultimately means to take power from authorities or corporations and divide it among the consumers, which will make lives much more manageable, quicker, fairer, cheaper, transparent, and best of all? Anonymous from the world.
But here is the catch, the companies and authorities that have the power and money in the centralization system aren’t going to support decentralization at all. Rather they’ll fight back and try their best to prevent decentralization at any cost. Definitely, they don’t want to lose authority or money.
However, in our vision, as the world is progressing, decentralization will become more popular after ten years, with the majority of the companies running on decentralized systems. This will not only make the system stronger but beneficial for the consumers.
Moreover, this is our perspective. The truth can unfold with time alone. If you think decentralization isn’t beneficial or the future beholds something else, don’t forget to comment down and let us know.
Conclusion.
And here, this gives us an end to centralized vs. decentralized cryptocurrency exchange. After reading the whole article, we are sure that you know how this exchange works practically and which is beneficial for you.
To be honest, centralized and decentralized systems have their pros and cons. It depends all on your requirements. Although decentralization is still in its early stages, it still has to grow further, and it provides plenty of features that can solve people’s modern financial problems.
