Cryptocurrencies v Traditional Currency

Cryptocurrencies

v

Traditional Currencies

Poll

What is a currency?

• Money and cryptocurrency

• Chickens, Goats and Donkeys

• Anything that is accepted as payment for goods and services

• Gold, Silver and other precious metals

A currency is anything that is accepted for payment of goods and services

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​When we use objects for payments or trade, it generally considered to be bartering which forms the earliest examples of currency systems

Open Ended

What is a traditional Currency?

Traditional Currencies

=

FIAT Curriences

Fiat money is a government-issued currency not backed by a physical commodity, such as gold or silver, but rather by the government that issued it.

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The value of fiat money is derived from the relationship between supply and demand and the stability of the issuing government, rather than the worth of a commodity backing it.

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Most modern paper currencies are fiat currencies, including the Australian dollar, the euro, and other major global currencies.

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Fiat Currency

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Key Points

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• Government-issued

• Not back by a physical reserve

• Controlled by a country's central bank

• ​Printing too much money can cause hyperinflation

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Fiat Currency

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• ​Hyperinflation refers to rapid and unrestrained price increases in an economy, typically at rates exceeding 50% each month over time.

• In times of war and economic turmoil in the underlying production economy, hyperinflation can occur in conjunction with a central bank printing excessive money.

• ​Hyperinflation can cause a surge in prices for essential goods—such as food and fuel—as they become scarce.

• While hyperinflations are typically rare, they can spiral out of control once they begin.

Hyperinflation

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Pros​

Convenient to Use - It's easy to carry and exchange.

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Pros & Cons

of

Traditional Currencies​

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Pros​

Convenient to Use - It's easy to carry and exchange.

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​Cheap to Produce - It costs around 25 cents to produce a polymer banknote. This makes it profitable for the government.

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Pros & Cons

of

Traditional Currencies​

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Pros​

Convenient to Use - It's easy to carry and exchange.

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​Cheap to Produce - It costs around 25 cents to produce a polymer banknote. This makes it profitable for the government.

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​Widely accepted - Domestically, cash is accepted for all transactions and can be exchanged readily for other currencies.

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Pros & Cons

of

Traditional Currencies​

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Pros​

Convenient to Use - It's easy to carry and exchange.

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​Cheap to Produce - It costs around 25 cents to produce a polymer banknote. This makes it profitable for the government.

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​Widely accepted - Domestically, cash is accepted for all transactions and can be exchanged readily for other currencies.

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Economically Stability - Countries have more flexibility with reacting to changing economic conditions. ​ ​

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Pros & Cons

of

Traditional Currencies​

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Pros​

Convenient to Use - It's easy to carry and exchange.

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​Cheap to Produce - It costs around 25 cents to produce a polymer banknote. This makes it profitable for the government.

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​Widely accepted - Domestically, cash is accepted for all transactions and can be exchanged readily for other currencies.

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Economically Stability - Countries have more flexibility with reacting to changing economic conditions. ​ ​

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Economic Growth - Countries can increase the printing of fiat currencies to stimulate growth​

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Pros & Cons

of

Traditional Currencies​

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Cons

Risk of Inflation - Printing too much money can decrease its value

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Pros & Cons

of

Traditional Currencies​

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Cons

Risk of Inflation - Printing too much money can decrease its value

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​Sceptical to Public Confidence - If people lose confidence in the monetary system, it can affect its value domestically and internationally.

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​Fees & Limited -[Financial institutes place limited withdrawals and high fees on foreign exchanges.

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Pros & Cons

of

Traditional Currencies​

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Cons

Risk of Inflation - Printing too much money can decrease its value

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​Sceptical to Public Confidence - If people lose confidence in the monetary system, it can affect its value domestically and internationally.

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Pros & Cons

of

Traditional Currencies​

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Cons

Risk of Inflation - Printing too much money can decrease its value

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​Sceptical to Public Confidence - If people lose confidence in the monetary system, it can affect its value domestically and internationally.

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Limited Privacy - Fiat money is easy to track.

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Pros & Cons

of

Traditional Currencies​

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Cons

Risk of Inflation - Printing too much money can decrease its value

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​Sceptical to Public Confidence - If people lose confidence in the monetary system, it can affect its value domestically and internationally.

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Limited Privacy - Fiat money is easy to track.

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​Fragility - Notes and coins can be easily damaged and need to be replaced.

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Pros & Cons

of

Traditional Currencies​

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Cons

Risk of Inflation - Printing too much money can decrease its value

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​Sceptical to Public Confidence - If people lose confidence in the monetary system, it can affect its value domestically and internationally.

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Limited Privacy - Fiat money is easy to track.

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​Fragility - Notes and coins can be easily damaged and need to be replaced.

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Pros & Cons

of

Traditional Currencies​

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Cryptocurrencies

are secured using Cryptography​

Poll

What is Cryptography?

• Cryptography is a method of protecting information and communications through codes so that only those for whom the information is intended can read and process it.

• Mapping a country's coastline

• A special type of writing that looks pretty

Pros

​Protected from Inflation - Only a limited number of cryptocurrencies are released, increasing demand and increasing value.

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Pros & Cons

of

Cryptocurrencies

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Pros

​Protected from Inflation - Only a limited number of cryptocurrencies are released, increasing demand and value.

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​Transaction Speed - Transfers can be completed in minutes.

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Pros & Cons

of

Cryptocurrencies

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Pros

​Protected from Inflation - Only a limited number of cryptocurrencies are released, increasing demand and value.

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​Transaction Speed - Transfers can be completed in minutes.

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Transaction Cost - It is generally much cheaper to transfer cryptocurrencies than fiat currencies.​

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Pros & Cons

of

Cryptocurrencies

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Pros

​Protected from Inflation - Only a limited number of cryptocurrencies are released, increasing demand and value.

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​Transaction Speed - Transfers can be completed in minutes.

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Transaction Cost - It is generally much cheaper to transfer cryptocurrencies than fiat currencies.​

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​Security - Cryptocurrencies are assigned to a single private key.

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Pros & Cons

of

Cryptocurrencies

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Pros

​Protected from Inflation - Only a limited number of cryptocurrencies are released, increasing demand and value.

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​Transaction Speed - Transfers can be completed in minutes.

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Transaction Cost - It is generally much cheaper to transfer cryptocurrencies than fiat currencies.​

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​Security - Cryptocurrencies are assigned to a single private key.

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Pros & Cons

of

Cryptocurrencies

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Pros

​Protected from Inflation - Only a limited number of cryptocurrencies are released, increasing demand and value.

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​Transaction Speed - Transfers can be completed in minutes.

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Transaction Cost - It is generally much cheaper to transfer cryptocurrencies than fiat currencies.​

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​Security - Cryptocurrencies are assigned to a single private key.

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​Privacy - Identities are masked as the wallet address records transactions.

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Pros & Cons

of

Cryptocurrencies

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Pros

​Protected from Inflation - Only a limited number of cryptocurrencies are released, increasing demand and value.

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​Transaction Speed - Transfers can be completed in minutes.

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Transaction Cost - It is generally much cheaper to transfer cryptocurrencies than fiat currencies.​

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​Security - Cryptocurrencies are assigned to a single private key.

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​Privacy - Identities are masked as the wallet address records transactions.

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​Transparency - ​All transactions are recorded on a blockchain register, which is publicly available.

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Pros & Cons

of

Cryptocurrencies

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Cons

​Illegal Transactions - The privacy and security of cryptocurrencies makes it hard for security agencies to trace illegal activities

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Pros & Cons

of

Cryptocurrencies

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Cons

​Illegal Transactions - The privacy and security of cryptocurrencies make it hard for security agencies to trace illegal activities.

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Risk of Data Loss - If you lose your private key, you lose your currency.​

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​The power lies in the hands of a few - Cryptocurrency remain in control of its creators and a limited number of an organisation; this leaves them open to manipulation.

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Pros & Cons

of

Cryptocurrencies

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Cons

​Illegal Transactions - The privacy and security of cryptocurrencies make it hard for security agencies to trace illegal activities.

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Risk of Data Loss - If you lose your private key, you lose your currency.​

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​The power lies in the hands of a few - Cryptocurrency remain in control of its creators and a limited number of an organisation; this leaves them open to manipulation.

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No refunds, No cancellations - if you make a mistake, you can't reverse it. ​

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Pros & Cons

of

Cryptocurrencies

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Cons

​Illegal Transactions - The privacy and security of cryptocurrencies make it hard for security agencies to trace illegal activities.

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Risk of Data Loss - If you lose your private key, you lose your currency.​

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​The power lies in the hands of a few - Cryptocurrency remain in control of its creators and a limited number of an organisation; this leaves them open to manipulation.

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No refunds, No cancellations - if you make a mistake, you can't reverse it. ​

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Vulnerable to hacks & scams - ​digital processes are always open to hacking, and there have been several fraudulent cryptocurrency scams.

Pros & Cons

of

Cryptocurrencies

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Cons

​Illegal Transactions - The privacy and security of cryptocurrencies make it hard for security agencies to trace illegal activities.

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Risk of Data Loss - If you lose your private key, you lose your currency.​

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​The power lies in the hands of a few - Cryptocurrency remain in control of its creators and a limited number of an organisation; this leaves them open to manipulation.

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No refunds, No cancellations - if you make a mistake, you can't reverse it. ​

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Vulnerable to hacks & scams - ​digital processes are always open to hacking, and there have been several fraudulent cryptocurrency scams.

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Price Volatility - Cryptocurrencies can change dramatically in short periods of time. ​

Pros & Cons

of

Cryptocurrencies

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Make a chart or map of the similarity and differences between Fiat currencies and Cryptocurrencies.

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Save a copy ​for review