Fiat Archives

[CHART] Why Bitcoin is Far Better than US Dollars

Posted on March 14, 2019 | by [email protected]

Recently, Insider Pro posted an article with a fantastic infographic that demonstrates the clear superiority that crypto currency has over ﬁat currency as we know it.

Interestingly, for a digital creation, Bitcoin has elements of all three of the asset classes, and rates more highly among a broader number of categories than gold or the vaunted U.S. dollar.

Here are a few of the ways in which crypto demonstrates an indisputable superiority to other currencies.

Secure

While gold and the dollar are relatively secure – indeed, advances in recent years have made paper currency extremely diﬃcult to counterfeit – neither of them hold a candle to cryptocurrency.

Backed by the permanency of the immutable blockchain, crypto is secure. While there have been some high proﬁle thefts, foul play and fraud via various malware attempts are few. The weak point in other scam attempts such as phishing is the person holding the currency, which is the same weak point in thefts of other types of currency.

Decentralized

There’s a reason that governments and exchanges are adopting crypto more and more in recent years. It’s decentralized nature, unfettered by regulations makes for mere instant transfer between holders.

Whereas cash can sometimes take as much as several days of veriﬁcation to transfer, especially internationally, crypto can change hands in a matter of moments.

Smart

The smart nature of cryptocurrency combines all of its best features.

Security: Cryptocurrencies are cryptographically secured, seizure-proof, and government censorship resistant. When any individual can send money world wide, worry free, it’s true freedom

Privacy: The private nature of coins enable cryptocurrency access to what could be considered the equivalent oﬀshore or private banking ecosystems to private citizens worldwide. The private nature of the coins also allow them to be used in novel ways, and pay for goods or services that can’t – publicly, at least – be paid for with traditional currency.

Smart contracts: Crypto and the blockchain behind are increasingly becoming the medium for executing smart contracts – a system in which the exchange of a currency triggers an action relying upon the receipt of that currency, with proof provided by a public and immutable record. Neither of the other currencies on that list can make quite the same claim.

What people need to understand as difference between Electronic Fiat and Cryptocurrency

Posted on May 1, 2017 | by [email protected]

With the advent of internet and electronic systems, payments and bank transfers for fiat currencies have gone completely digital. With cryptocurrencies like Bitcoin being advocated as simple, quick peer to peer transfer means, people have come to question how cryptocurrencies like Bitcoin and digital payments for fiat currencies are different. The difference lies in the issuance, means of validation, the speed of transfers and how the storage accounts are maintained. Let’s look into what exactly people need to understand as the differences between Electronic Fiat and cryptocurrencies:

Difference between fiat and cryptocurrency:

One major difference is the fact that cryptocurrency reserves are limited and their scarcity provides them with a deflationary outset. In cases like Bitcoin, the currency is set to produce only 21 million coins by 2040. Hence the programmed scarcity ensures that the currency’s journey is deflationary. In the case of fiat currencies, the purchasing power of the currency depends on how the country’s economy is doing. With traditional fiat reserves be it physical or digital, there is no way to tell how much money is circulating, Central Banks can print money on a whim without backing it up with stored Gold or standard reserves. Economists who are against this type of monetary practice believe that the world’s citizens are experiencing a silent robbery called inflation due to central planners unconditionally printing vast amounts of fiat reserves.

The digital payments system and push for a cashless society:

When it comes to physical currency, it becomes difficult to monitor the cash flow. The government has no way to know the amount of money in circulation. Hence there has been a constant push for cashless society amongst various countries of the world. Especially European countries have banned physical currency transfers over a thousand pounds. This has been taken as a step to proactively stop terrorism funding, to monitor the cash flow and be able to avoid transactions that might prove detrimental to the country. The electronic fiat currencies have come to existence from 1975 and now constitute 92% of world’s fiat reserves.

What advantages does Bitcoin provide:

Fiat electronic transactions where major banks or transfer companies act as a custodian or intermediary, there is a chance of censorship. A very good example is the recent Bitfinex’s lawsuit against Wells Fargo where the bank intervened in the business operations by halting the deposits. By placing the power in the hands of a central bank, we are also bidding good bye to financial freedom. Since Bitcoin transactions are decentralized, they don’t depend on any central authority making it a clear tool for financial independence.

Wells Fargo and Bitfinex war escalates, Bitfinex shuts down fiat deposits

Posted on April 17, 2017 | by [email protected]

Cryptocurrencies are undoubtedly the future of transactions and Bitcoin is leading the way. With increasing number of Bitcoin and cryptocurrency transactions, the commercial banks are fearing a near replacement. Added to their concerns, they are unsure about how the Bitcoin regulations would shape up in different geographies and are hesitant in aiding their development. Bitfinex that has recently redeemed the hack victims completely has been a victim of one such incident. This time the involved bank was Wells Fargo and the exchange moved on to a lawsuit to avoid any impending repercussions. Let’s dive deep into what exactly happened and how Bitfinex is proposing to tackle the issue:

Lawsuit over embargoed wire transfer:

Bitfinex is taking Wells Fargo to the court for having reversed US Dollar cash deposits designated to their customer accounts coming from the exchange. This is infact a very important law suit for the Bitcoin world as the legality of shutting down bank accounts merely for being related to the use of Bitcoin or cryptocurrency trading has been a grey area. The opening statement makes it clear enough for the court what the issue is:

“Wells Fargo has suspended U. S. dollar wire transfer operations needed to remit to plaintffs’ customers U. S. dollars that the customers deposited with plaintiffs to purchase digital currency, causing imminent and irreparable harm to plaintiffs.”

The legal basis for the lawsuit lies in the fact that Bitfinex works with Taiwanese banks, including a bank called ‘Taishin’. Tashin is responsible for relaying the transfers to US customers using Wells Fargo, among others. Wells Fargo recently sent a letter to the Taiwanese bank informing them that they would no longer be accepting the deposits from these accounts until “further due diligence” was obtained.

Withdrawal of Lawsuit:

Surprisingly, a week after filing, Bitfinex has withdrawn its lawsuit against Wells Fargo for suspending its U.S. dollar transfers. Many believed that Bitfinex had a chance against Wells Fargo, which acted as the company’s correspondent bank. The lawsuit became the cynosure of the cryptocurrency world as that would let everyone know about Bitcoin’s standing. While no statement was issued by Bitfinex, many believe that Bitfinex had no legal standing and banks are allowed to selectively block transactions at their own discretion. Hence Bitfinex would have eventually lost and it was an act to make a statement.

Bitfinex stops accepting Fiat deposits:

After the entire showdown about the lawsuit against Wells Fargo, Bitfinex has announced yesterday that they would stop accepting fiat deposits. The exchange has sighted that the refusal on the part of the banks is one of the major reasons. They said:

“Beginning April 18, 2017, all incoming wires to Bitfinex will be blocked and refused by our Taiwan banks. This applies to all fiat currencies at the present time. Accordingly, we ask customers to avoid sending incoming wires to us until further notice, effective immediately.”

The exchange said this would be an expected delay till they find alternatives to process customer funds and put a framework in place.

How Bitcoin is slowly replacing fiat currencies

Posted on July 26, 2016 | by [email protected]

From its inception in 2009, Bitcoin has been regarded as one of the most versatile payment methods that exist in current times. It goes a long way in solving the many problems associated with moving fiat currency around the world and in the internet age, the digital currency has the potential to be accepted as a universal form of currency.

Though skeptics have long voiced their doubts about Bitcoin ever being adopted wide enough to replace‘real money’, Bitcoin’s 2016 performance has outperformed most asset classes to date. In fact, Bitcoin’s performance since inception has been nothing but stellar.

Fiat currencies are deemed acceptable if they meet the following criteria. Let us see how Bitcoin fares on these terms.

Easy and convenient means of exchange
Should serve as a unit of account
Act as a viable store of value

On the first criterion

Bitcoin passes this one with flying colors as this is one of the main reasons why it is on its way to mass adoption so quickly. Bitcoin’s influence is gaining steam, due to its easy, low cost peer to peer network. Anyone can join and use it and there is no authority. From select cafes and restaurants in the developing world to thriving eCommerce giants, many businesses have adopted Bitcoin as a medium of payment. While a major portion of the world is yet to accept adopt Bitcoin, we are tracking its rise.

The second criterion

Would be that the payment medium should serve as a unit of account. This means it has to be used to value goods & services or anything else for that matter. Most currencies have goods valued in its denomination and they have a trading exchange rate that can be used to compare the value of goods across currencies. While the world economy finds its global reserve currency to be the US Dollar, Bitcoin and other digital currencies can serve as a better unit of account on the basis of having uniform value across borders. There is no government intervention when it comes to manipulating it and in today’s internet enabled world, it has the potential to literally become the world’s global reserve currency.

The final criterion

Is that the currency should act as a stable and reliable store of value. Traditionally any asset class can act as a store of value over time but most lack convenience as a universal means of exchange. Bitcoin faces some challenges as well, mostly owing to its high volatility.

Statistically, however, Bitcoin’s high volatility can basically be chalked up to speculation around its potential to disrupt deep rooted industries. This will eventually be resolved once wider adoption occurs and Bitcoin becomes a way of life.

Conclusion

Owing to the above factors, Bitcoin fits the bill as a strong promising contender for becoming a universal form of currency.