What is the difference between cryptocurrencies and traditional coins?

Written by Davies on / Reading time: 4 minutes.

What is the difference between cryptocurrencies and traditional coins?

The two are coins, and worth as a generic change for other goods or services, but, inevitably, we found large differences between them. The point that holds them together is their exchange character. With the cryptocurrencies we started talking about value in the form of money, and we do it in a way that creates the Internet of Value.

That said, considering the growth that they virtual currencies are experiencing in society, we now believe that it may be a good time to clearly mark the main differences between the cryptocurrencies and the traditional currencies.

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The most significant differences between cryptocurrencies and traditional coins

When we mentioned the traditional coins, we refer to the conventional nature of the coins that we've been traditionally using to acquire products and services. From a chewing gum to a house. The euro, the dollar or the peso are examples of them, but what would differ from cryptocurrencies? Pay attention:



Exchange of money to acquire something of value

Value is exchanged in the form of cryptocurrencies

They are physical

They are virtual

Its core is located in a specific country or group of countries

They are global
Central Banks and financial reserves control them

They are controlled by all users and blockchain technology

Become part of the economic system through bonds

Become part of the market directly

Great inflation and interest rate influence

Supply/Demand is the only influence
Issued by governments

Decentralized mining offers

Value transfers are very slow and bureaucratized

Peer-to-peer payments are made instantaneously without intermediaries

Commission costs

Costs come from software maintenance

Not every person in the world has the power to have a bank account

They can be used by the whole society, including those parts of the population without access to financial resources


Why do we talk about value in cryptocurrencies?

Although some people agree to point to virtual currencies as a sort of raw material, the truth is that no raw material of the world carries intrinsic value as such. Surely, you have heard of the growth of the cryptocurrency values, and wide range of news. In fact, we have also told you about it in the previous section. What hides the value to have such relevance in cryptocurrencies?

A couple of years ago, people began to talk about the Internet of Value as a result of a crypto-revolutionary phenomenon. We are becoming more and more convinced that blockchain technologyis exciting, that virtual currencies are born from their hand and that what is exchanged is value in the form of cryptocurrencies. This is possible because, as human beings, we have understood that value is based on the confidence we give to certain materials to be exchanged by others.

Following this line of analysis, it was pursued to give such a valuable feature to elements that had a great movement ease (not like gold, or printed notes), such as digital items(cryptocurrencies). Moving faster than the internet is physically impossible.

Some people already believe that the Internet of Information is also the Internet of Value, although it is necessary to know that the price of cryptocurrencies does not always coincide with its intrinsic value.

Conclusion about the differences between traditional currencies and virtual currencies

There are very clear differences between these two types of currencies, but they also coincide in their exchange objective and in encompassing different currencies at the same time. For Example: Within the traditional currencies we find a myriad of names: euro, peso, dollar, penny, etc. The same happens in the crypto world, because under their name, there are many different cryptocurrencies, such as Litecoin, Bitcoin, Davies, Ripple, Dash, Nero, etc.

Many companies and ordinary citizens have found in cryptocurrencies an ideal place to make loans, try new technologies and have control over their own money.

Now, never confuse value and price.