Advantages Over Traditional Money

What are the differences between cryptocurrency and regular bill-and-coin money? Coin Pursuit will take a close look at digital currency's advantages.

As we noted in a previous section, there are around 30 different types of cryptocurrency in the world today. No two of them are exactly alike, but they all like to advertise certain advantages over the regular bill-and-coin currency you carry in your pocket. We'll take a look at those here.

First and foremost, digital currencies, like Bitcoin for example, aren't linked directly to the laws, rules or regulations of any government, corporation or bank. The interest rates, fees and surcharges you may have to pay on your bank account or credit card in no way effect your cryptocurrency. As a matter of fact, at the heart of digital currency is a sense of rebellion against these fees, some of which are so deeply buried in fine print as to be considered “hidden.” Along those same lines, the rate of inflation that can potentially diminish the purchasing power of your government-issued legal tender (such as the US dollar) doesn't touch the value of any alternative currency you hold.

Digital currency affords its users complete anonymity. When you make a purchase with your ATM or credit card, your personal information—your name, physical address and often other identifying data—is attached to each and every transaction. Businesses, banks and governments can use this data to track you and take note of your purchases. In contrast, cryptocurrency transactions carry no personal information without your adding it yourself.

Accounts that hold traditional currency can be garnished or frozen completely; the latter means the holder of the account has no access to the funds in it. Since cryptocurrency exists outside the regulations and laws that allow this to happen, it's very rare for an investor to be rendered unable to access his coins—though in certain situations in which illegal activity is proven to have taken place, it can happen.

Next Introductory Topic: Risks of Cryptocurrency like Bitcoin and Litecoin

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