Fiat Money Transfer VS Crypto Transfer
September 09, 2019
Lately, cryptocurrencies have become an integral part of the technological breakthrough. The main cryptocurrency Bitcoin remains the most popular digital asset, whereas Ethereum promises to disrupt traditional financial instruments and business processes with the help of blockchain. Digitizing money through cryptocurrency can facilitate the emergence of a new world of instant cheap transactions among all people.
And if you still keep thinking of going to crypto, we have a bunch of good reasons for you to finally do that.
Banks: Financial Headaches
First, there are time costs and difficulties with banks. One needs to spend time – create a bank account and replenish it. The bank may not exchange certain currencies, limit transfers to other countries or process them for a very long time. If a bank has any questions about your activities, they can freeze your account and stop all transactions.
Cryptocurrency can be sent instantly. You just broadcast your transaction to a blockchain, and the money is sent. In addition, instead of a bank account you just simply use a wallet or exchange account.
There is a caveat, however: you might be required to undergo a KYC verification procedure in case of exchanging cryptocurrency to fiat money. But even with KYC, blockchain transfers are rather fast and more convenient especially if you send money to a foreign country.
Fees and limits
When it comes to a large amount, you may encounter difficulties related to the transfer limits. Things get much tougher when you need to transfer money from one country to another. In that case, you need to be prepared for draconian fees and quite a long processing time.
In a blockchain, the transaction takes several minutes. For example, in the Bitcoin network, the whole transfer time takes up 10 minutes on average. In XRP, this time is reduced to only 5 seconds! The network fee doesn’t depend on the amount you’re sending, just on the network workload, so, basically, the fee is literally too low.
When you need some privacy: fiat currencies are characterized by a lack of anonymity when conducting transactions. Once there is state regulation, the government will know all the data of every citizen who has made a money transfer or payment.
Regarding digital assets, no personal data is required to send a cryptocurrency. The transaction itself is always encrypted and anonymous. One can track a transaction from one address to other, but in fact, there are no identities or some personal data.
Your identity can be tracked in cases if you registered on the exchange service following KYC procedure or if you exchange cryptocurrency to a fiat money using your bank card.
Cash and Crypto
The most important difference is that you can hold any fiat bill in your hand and physically put it in your wallet. Its nominal value is set by the state.
In terms of crypto, there are no physical cryptocurrencies, it exists only as a set of encrypted data in the blockchain. The only thing that proves that you are the owner of funds is the private key of your cryptocurrency wallet. You need to keep them in a safe and secure place as in most cases there is no way to recover your funds if you lose it.
Fiat money is completely controlled by the state system. All transactions pass through the banking systems and for a certain amount of money received the citizen is obliged to pay taxes. While cryptocurrency is completely decentralized.
How about future?
There is no guarantee that in this case all citizens of the world will suddenly forget about ordinary money and will switch to cryptocurrency. Most likely, fiat money will gradually go into a non-cash system and simply will not have a physical equivalent in the form of banknotes. Naturally, as long as there is a state acting as their guarantor.
The best thing the banking industry can do is inheriting the working principles and move its outdated payment systems to blockchain.
Blockchain is far better than the traditional banking system. Although it’s pretty raw and needs some room for mass adoption, it still has huge prospects and benefits in comparison to the outdated ways we interact with money. And if the arguments were persuasive, you can try out Atomic Wallet and go crypto right now!