Cryptocurrency versus fiat — Robin Wils's website
Last modified: Sat, Jan 28, 2023
What is cryptocurrency?
Cryptocurrency is virtual money, a digital asset. Many people have heard about Bitcoin. Some think that it is a scam and others claim it will replace fiat money (dollar, euro). Let’s compare the two.
The supply of fiat and crypto
The supply of fiat money is not limited. Money can be printed and this is used to make the economy work. Many cryptocurrencies have a maximum number of coins that can exist. This means that the value of the coin often tends to increase over time because it becomes rarer.
Not all cryptocurrencies are limited in the amount of coins, but Bitcoin is. Bitcoin likely won’t replace fiat money, as it is a store of value. The cryptocurrency XRP is more aimed at being a currency for example. More XRP can be created.
Bitcoin is not meant to be used as a currency
Is cryptocurrency a scam?
Some cryptocurrencies are purely designed to get money from the buyers and are scams. It is important to use trustable websites or banks. Most coins have a use-case. Some are made to use in games. Others are made to be stable in price. Coins like Bitcoin are made to act like a store of value.
Cryptocurrency is not legal in every country. Some people claim that Bitcoin is often used by criminals. Bitcoin is not the best option for such purposes. Every Bitcoin transaction is public and can be traced back to a wallet. Wallets are often linked to personal data. There are coins which have privacy in mind like Monero. Fiat money also is used for criminal purposes.
People tend to make the argument that stocks are tied to businesses, while cryptocurrencies aren’t. This is a weak argument. To make that argument you have to explain why fiat money has value, since it can be infinitely printed. Businesses buy cryptocurrency all the time. Both types of currency rely on technology and math. Cryptocurrency just has better math behind it.
Legal fiat scams
Is it bad for the environment?
Some cryptocurrency is created with green energy. Money printing on the other hand has no limit and consumes material. Material doesn’t last forever. Some cryptocurrencies are created to donate to organizations which help the environment, if you are willing to trust such organizations.
Using cryptocurrency does not have to be hard. It can be like a bankcard. The technology of newer cryptocurrencies tends to get better with time. Newer coins tend to consume less power. Bitcoin is the coin which likely consumes the most power, but the most common source of power within the Bitcoin network is green energy, hydroelectricity.
I do have another page about my thoughts about the environment. It does not include anything related to crypto though.
What about NFTs?
The herd tends to hate progress and innovation. Innovation tends to come with early problems. An alternative is needed to stop innovation. Figure out which problems it tries to solve first. Regular art has many of the same problems.
The problems which NFTs have, which the old way of selling art doesn’t have, are early phase problems. It is likely here to stay, but it requires more evolution. Perhaps people will gain a certificate when it evolves. Games will likely use NFTs as well. Art theft is hard to avoid. It already existed before NFTs.
You're wrong about NFTs - Blender Guru
The herd knows that some things are bad for their progress. Yet they consume it. The ones which stand above the herd likely wouldn’t avoid technology completely, but would block out the “bad” parts of it. The internet has lots of freely available information. Relying on technology can make us lazy. The ones which strive for progress won’t allow themselves to depend that much on technology.
Should you invest in crypto?
It depends. Only invest in projects that you trust and like with money that you can miss. I would recommend looking at the top coins if you are new to cryptocurrency. You could always give it a try.
Many banks allow you to buy crypto. The advantage is that you can’t lose your crypto if you forget your password. Not all banks will offer interest on your cryptocurrency though.
A popular platform is Binance. Coinbase is well-known too, but I have chosen Binance. Most platforms apply a small trading fee. Transfering a cryptocurrency often costs something. You often have to pay that plus the trading fee. NANO is a cryptocurrency which does not have any transfer fees.
Interest on your cryptocurrency
I recommend platforms which offer interest on crypto. It is true that you can’t see your private keys there, but otherwise you won’t gain free interest. My favorite platform is Nexo. They do require you to verify your identity though.
Nexo has the nexo token, which you need 10% of your balance in to gain the highest rate of interest. There are other platforms, but Nexo feels very professional compared to others. I find them trustworthy.
Get free cryptocurrency
Not everyone has the money to invest. Most people do not want to waste their valuable time either. Luckily there are ways to gain a small amount of crypto without sacrificing too much of your time.
Brave browser is similar to Google Chrome, but Brave blocks ads by default. It does show small ads notifications if you turn a setting on. You will get paid in BAT when you see one of those notifications. It does have an embedded wallet, so you don’t have to give them any of your personal data. Verifying your identity is not needed for the brave wallet.
Faucets to gain free cryptocurrency exist, but they are often not worth your time. I would suggest making videos on Odysee if you want to put time into something. It is a video platform like YouTube which pays in cryptocurrency.