2.2.0. Three Major Characteristics of Cryptocurrency
The following are the three major characteristics of Cryptocurrencies that make them different from the electronic fiat currencies:
(1). Decentralisation
Cryptocurrencies are decentralised while electronic fiat currencies are centralised. This means there is no central authority that owns cryptocurrencies. Hence, they are not under the control of the government, banks or any other central authority, unlike fiat currencies which are owned and controlled by governments through their Central Banks.
(2). Deflationary
Electronic fiat currencies are subject to inflation; hence, they lose their value over a period of time. On the other hand, a typical cryptocurrency is deflationary; its value appreciates as more and more people use it.
(3). Universality
Cryptocurrencies have universal usage and cross-border penetration in that you do not need to change them into a country’s money to be able to use them. Bitcoin in Nigeria is the same Bitcoin in the USA, China, or France. On the other hand, electronic fiat money is only legal within the country that issues it or any other country that chooses to recognize it, therefore, they are not universal.