Currency

Coins and banknotes, which started to be used after the barter system, are used as a means of exchange. In general, every nation or region has its currency. In this way, countries and regions can manage their economy. As a result of privatized economies, there are differences in value between currencies. Due to these differences, it is possible to trade between different currencies. In addition to fiat currencies, the development of technology has made possible the development of cryptocurrencies that exist digitally and are not regulated by any central government.

Fiat Currency

Fiat coins emerged as an alternative to money created with commodities. In this way, the value of the coins becomes determined according to the economic power of their countries, rather than the raw material they contain. Physically, fiat currency has no value (they are not made from valuable materials such as gold, we mean). Nations, economic relations, and political strategies cause changes in their value according to the supply and demand relationship created in the market. Fiat currencies first began to be used in the Chinese state in the 11th century.

Cryptocurrency

Starting with the barter system, then evolving into coins containing commodities, and then fiat currencies, which removed the commodities and represented the values ​​determined by the nations, emerged. But the story doesn’t end there: There are also cryptocurrencies. Cryptocurrencies, which emerged in 2008 via blockchain technology, carry the concept of currency to a very different and far from the normal place. They are decentralized, only exist digitally, and in many ways offer a more anonymous, non-traceable, and uncontrollable field of financial action.

What Do Cryptocurrencies Provide?

Cryptocurrencies, which are seen as the last point of the development of money, for now, offer very different things compared to other currencies. Cryptocurrency makes money decentralized for the first time. Cryptocurrencies are not affiliated with any state or center. This puts cryptocurrencies apart from others. The value of these currencies, which are not connected to any center, is determined by the supply-demand balance. At the same time, its decentralization creates an organic value growth.

Accessing and trading cryptocurrencies is also much easier than traditional currencies. Transactions can be performed from any hardware with an internet connection.

Of course, there are downsides as well. In a negative situation in the currencies that we know in the classical sense connected to a center, intermediaries can help with the problems, but this is not the case in cryptocurrencies.

Learn more about cryptocurrencies and the basis of blockchain technology.