Difference between Fiat Currency and Cryptocurrency

Cryptocurrency is a digital currency that uses cryptography or encryption. Cryptography is used to generate money and to confirm transactions. All the transactions of cryptocurrency are added to a public ledger. This ledger is called blockchain. New coins like Fiat Currency are created through a procedure known as mining.

Fiat Currency: Fiat currency is actual money like USD, JPY and EUR etc. Value of fiat currency is determined by government. All the fiat currencies have some back up. Fiat currency is also the currency that every common person used to by good and services in all over the world. There is a central authority that can remove or add fiat currencies in circulation.

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Differences Between Fiat Currency and Cryptocurrency : There are many differences between cryptocurrency and fiat currencies. Following are some notable differences.

Authority of currency: All the cryptocurrencies are create by computers. So, there is no central authority to control them. Whereas, fiat currencies are issue by the government. Price value of fiat currency is determine by the governments.

Supply: Cryptocurrency has the limited supply. Each coin has the limited number. All coins have the maximum number. Whereas, fiat currencies are produce by governments. So, there is no specified limit of fiat currency. Government use to increase the supply of currency when it is need. So, the supply of fiat currencies are control by the government.

Way of Exchange: All the cryptocurrencies are exchange in digital way. There is no physical value of cryptocurrencies. So, every cryptocurrency exchange digitally. Exchanging money of fiat currency is physical. All the fiat currencies also exchange in physical way.

Representation: All cryptocurrencies are also represent by the public and private pieces of codes. Fiat currencies are represent in the form of paper money or coins.

Determination of Value

The value of cryptocurrency is not determine by supply and demand. The value of cryptocurrency is determine by the market and regulations. Value of fiat currencies are also less volatile as compare to the value of cryptocurrencies.

Damage or Destroy

All the cryptocurrencies cannot be destroy or damage. Fiat currencies can be destroy and damage also. One can easily snatch or steal fiat money. There are huge chances of being damage or destroy. But there is nothing involve in cryptocurrencies.


It is very easy to store or carry all the cryptocurrencies. Once can easily store millions worth coins in their mobile phones. Storing and carrying fiat currency is not easy. It is very difficult to store millions in pocket. Fiat currency takes up lots of physical space to carry and to store.


There are many risks involve in fiat currency. It contains lots of risks. Cryptocurrencies are risk free. Anyone can also easily get all the cryptocurrency without any risk or fear. It is the big difference between both type of currencies.

Charges of Transactions in Fiat Currency

There are no charges involve in crypto transactions. All the transactions are free. Whereas transferring money of fiat currencies include lots of fees and taxes. One pays lots of fees while transferring money. Transferring fiat currencies takes much time but crypto transactions do not take much time.

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