Commodities, Fiat, and Cryptocurrency
Bitcoins are part of a category of finances known as “cryptocurrencies.” These currencies evolved as people looked for ways to maintain more control over invested money, do business on a global scale, and conduct business over their computers. Today, the use of the Bitcoin has increased enough that many people carry a Bitcoin card. Although the original aim of the Bitcoin to give consumers financial freedom hasn’t been realized, there are some important things to bear in mind about the effects of this type of currency.
Fiat Versus Commodity Money
With the rise of Bitcoin, the question of where money gets its value was an issue. Most countries rely on a fiat currency. This means that the value of the country’s legal tender is based on a value backed by the relevant government. For example, the U.S. dollar is fiat money and the value of the dollar is backed by the U.S. government. The value of commodity money, on the other hand, is based on a commodity such as gold or silver. The United States originally had a commodity money system which lasted into the 20th century. Until the system changed to a fiat currency platform, U.S. tender could be exchanged for gold. This ended in 1971.
Why Trust Cryptocurrency?
What, then, supports the value of fiat currency? Essentially, this currency is backed by the issuing government. It is backed by the reputation and credit of the issuing government. For those consumers who have watched or studied the effects of rising and falling governments throughout history, fiat currency may seem a bit risky. This feeling may have prompted, to some degree, the growing popularity of the Bitcoin card or Bitcoin prepaid card.
Cryptocurrency Versus Cash
Advantages of the Bitcoin prepaid card include the ease of transferring cryptocurrency into fiat currency. This is especially advantageous for those consumers who deal with clients or retailers with several different country currencies. With that said, it’s important to note that Bitcoin isn’t the same as cash. It isn’t quite as easy to use in public as cash. This is another reason for interest in a Bitcoin card. The card is one way of addressing the challenge of using digital currency in daily life.
Can Cryptocurrency Be Used for Everyday Purchases?
Bitcoin prepaid cards look just like any other type of credit or debit card. When using the card at a retailer who accepts the currency, the cryptocurrency is converted into fiat (whether that means the U.S. dollar, the euro, or another country’s money.) These cards can already be used online for purchases and are becoming more useful for everyday purchases at physical locations.
Are you ready to convert to a new currency system? Would you like to add cryptocurrency cards to your wallet? How do you plan to use cryptocurrency in your daily life?