Have you ever asked yourself why governments can print more money while no one can "print" more Bitcoin?
This is one of the fundamental differences that make cryptocurrencies a revolution in the world of finance ... Two years ago, my friend Khaled lost 40% of the value of his savings due to sudden inflation in his country ... while my neighbor Said retained the value of his wealth because he converted part of it into gold ... Mahmoud invested in cryptocurrencies, and the value of his money doubled.
A simple story summarizes one of the most important differences between the two systems .. Traditional currencies like the dollar and euro derive their value from people's trust in the governments that issue them. Central banks can print more of them whenever they want, because they are simply "paper," leading to inflation and erosion of purchasing power.. unlike gold, for example, which derives its value from its scarcity and does not derive its value from any entity, its value is intrinsic and stable throughout history.
Cryptocurrencies like Bitcoin have a limited supply (only 21 million Bitcoins) .. they meet the criterion of scarcity, which gives value to things like gold and precious metals, which is why they are called "digital gold," making them immune to inflation.
Milton Friedman, the Nobel Prize-winning economist, says: "Inflation is a form of taxation that can be imposed without legislation." No matter how strong your country's economy is, the value of your money gradually erodes, and what you could buy for one dollar ten years ago now costs ten dollars. If you're like me in a country with a fragile economy, holding cash is a form of madness... Gold and cryptocurrencies provide a refuge from this "hidden tax."
The second fundamental difference is decentralization. Traditional currencies are subject to the control of banks and governments. In contrast, cryptocurrencies operate on decentralized networks that no one can control. When the Greek government closed the banks in 2015 and limited daily withdrawals to only 60 euros, Bitcoin holders were unaffected by these restrictions.. No one has authority over you and your money, and this is the true concept of financial freedom .. while others are like slaves to the global financial system.
Privacy is the third fundamental difference .. every traditional banking transaction is linked to your personal identity and can be tracked and blocked if you're in conflict with someone .. while cryptocurrencies offer varying degrees of privacy, some provide near-complete anonymity.
Speed and cost differ as well.. Transferring money internationally through the traditional banking system can take days and comes with high fees. In contrast, cryptocurrencies can be sent around the world in minutes at a relatively low cost.. Imagine Sarah, a graphic designer working with international clients. She was losing 8% of her profits consistently in the form of bank transfer fees and currency exchange companies .. she works hard, and then someone who does nothing takes a percentage of her effort .. somewhat like a toll from highway robbers but in a refined manner .. when she started accepting payments in cryptocurrencies, these fees disappeared .. this gives you a glimpse of the future.
Robert Kiyosaki says: "It's not about what you own, but what you know. Money comes and goes, but knowledge stays and grows." Understanding the differences between the traditional financial system and the cryptocurrency system is the first step toward making smarter financial decisions in our digital age .. In the next post, we will talk about how to create a secure crypto wallet to protect your digital assets. Are you ready for your first step into the world of cryptocurrencies? #BTCBreaksATH110K #DigitalGold #التضخم
