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I'm reliably confused by people who suggest cryptocurrencies aren't just a different kind of fiat.
by TheOtherHobbes 5y ago
I'm reliably confused by people who suggest cryptocurrencies aren't just a different kind of fiat.
- cryptica 5y agoThere are two key differences: - Supply of tokens is limited or otherwise is entirely predictable. In the cases where the supply is not limited, the rules for minting new coins are clear in the code and for the vast majority of cryptocurrencies, the inflation is a fixed number of tokens; meaning that the inflation expressed as a percentage drops over time so it has deflationary characteristics. If the annual inflation is 100K tokens per year, these 100k new tokens will represent a smaller percentage of the total supply as time goes by. This is very different from fiat currencies where inflation is expressed as a percentage. In fiat, 10% inflation this year represents A LOT MORE in dollar terms than 10% inflation represented 20 years ago. - They do not rely on trusting a single government or entity. There are no single points of failure where somebody could steal funds or tamper with records.