Cashless Payments Era: Cryptocurrency, Debit Card and Credit Card Similarities & differences

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Note: This photo is created by me (if you want to use it just noticed me). I created this Venn Diagram to show some details to compare the similarities and difference of Cryptocurrency, Debit Card and Credit Card. For more information, please proceed to the next paragraph of the article.

Note: This photo is created by me (if you want to use it just noticed me). I created this Venn Diagram to show some details to compare the similarities and difference of Cryptocurrency, Debit Card and Credit Card. For more information, please proceed to the next paragraph of the article.

First of all, let us define the meaning of each side.

Based on Wikipedia the meaning of cryptocurrency (or crypto currency) it is an asset in a digital platform that is designed to work as a medium of exchange wherein the each coin ownership records are use to stored in a ledger existing in a form of computerized database using strong cryptography to secure transaction records, to control the creation of additional coins, and to verify the transfer of coin ownership."

In short, this is a currency that uses thru internet transactions with more security and records to track.

Based on investopedia the meaning of debit card is like a credit card with a thin rectangular piece of plastic or metal and a payment card or physical card that uses in business transaction that deducts money directly from a consumer's checking account to pay for a purchase. Debit cards eliminate the need to carry cash or physical checks to make purchases directly from your savings.

In short, debit card is a money that comes from the consumer's account or savings.

Based on investopedia the meaning of credit card is a thin rectangular piece of plastic or metal like debit card that is issued by a bank or services company, that allows cardholders to borrow funds with which to pay for goods and services with merchants that accept cards for payment.

In short, credit card  is a money that comes from the funds of the bank/s to be borrowed by the consumers or the banks user.

The Advantages and Disadvantages of each category

Cryptocurrency

Most used cryptocurrencies

  1. Bitcoin (BTC)

  2. Ethereum (ETH)

  3. Ripple (XRP)

  4. Litecoin (LTC)

  5. Bitcoin Cash (BCH)

Advantage

  • It can use as a global currency without using the countries own fiat currencies like (Pesos, Dollars, Euros, Yen or ETC.)

  • It has an ability to transfer funds within a day. Compare to the banks with the initial day to verify and transfer the funds.

  • It avoids the inflation rate because inflation only affects the fiat currencies in one country that suffers from it and cryptocurrencies does not based on the countries situation unless there is a conflict between them.

  • Strong security when it comes to the transaction because it can hide the information and does not require a lot of backgrounds of the people who used cryptocurrency as a payment.

Disadvantage

  • It is hard to retrieve the account when the users forget their credentials when logging into the site for cryptocurrencies user and can cause of losing the funds due to the lack information.

  • It is visible to hackers and it is hard to retrieve the money if someone leaks your account information and transfer it to their funds by knowing your identification and passwords.

  • The users who have already transferred the funds have no longer access to refund or cancel the transaction in confirmation. And if you compare it to the banks, the banks have a lot of potential to retrieve the money if there is someone who tries to hack your bank account, they can easily trace it as a part of their service.

  • Risky in some part because cryptocurrencies have a potential for higher and lowers its own value depends on the number of the users that invests, converts into other currencies or withdraws their cryptocurrencies.

  • It has a limited sources of using cryptocurrencies in physical markets.

Debit Card

Most used Debit Cards

1.) American Express Serve FREE Reloads: Best for Cash Reloads.

2.) American Express Serve Cash Back: Best for Cash Rewards.

3.) Netspend Prepaid: Best for Direct Deposits.

4.) Starbucks Rewards Visa Prepaid Card: Best for No Fees.

5.) Akimbo Prepaid MasterCard: Best for Budgeting.

Advantage

  • It can convert to cash immediately by the use of ATM or Automated Teller Machines.

  • It is convenient, easy to use when it comes to buying groceries or any physical market that has a power to read a Debit/Credit Cards.

  • There is no problem when it comes to the monthly payments when users use their debit card because the money in their accounts are the money that they deposited in a bank or debit card.

  • Some Debit Cards have a savings method that can produce additional fees 0f three percent or more per year if the cardholders keep the money to the banks.

  • Most of the online shop or market accepts Debit Card Payment than Cryptocurrency.

Disadvantage

  • It has a fee per use of ATM or Automated Teller Machines.

  • What you have is what you can use only, unlike credit cards with high limit as long as you can pay it.

  • It can cause hassle when your balance is not enough.

Credit Card

Most used Credit Cards

1.) Discover it® Cash Back card.

2.) Chase Sapphire Preferred Card.

3.) Chase Freedom.

4.) American Airlines cards.

5.) Chase Sapphire Reserve.

Advantage

  • There is no need to worry about the amount of the cash in your hand when buying to the physical shop or market.

  • You can get money when you need it in advance, but you will have to pay it late.

  • You can gain some perks, discount and promos from the partnership based on your credit card.

  • Same as Debit Card. It can convert to cash immediately by the use of ATM or Automated Teller Machines.

Disadvantage

  • It has a monthly bill with interests and charges. Remember that DEBT is a DEBT

  • Credit cards are easy to use so that this can be the cause of overspend if the owner does not control itself or noticed the balance.

Whether it is Cryptocurrency, Debit Card or Credit Card it is always depends on the person's awareness to secure its own money to the hackers. Always be aware, know the backgrounds and details of the banks or cryptocurrency that you will put your money and also read the Terms and Conditions before entering and trusting them because the rules is always a rule once you agree with this you have no power to ignore it. Control yourself and do not overspend the money to the things that you don't need. Always control your money and do not let money controls you.

I hope you learn something new! if you have an additional information you can comment it on the comment box below.

For more information, here are the references:

https://www.360financialliteracy.org/Topics/Credit-and-Debt/Credit-Cards-and-Reports/Credit-Cards-The-Pros-and-Cons

https://www.arvest.com/education-center/basic-finance/debit-cards

https://www.geeksforgeeks.org/advantages-and-disadvantages-of-cryptocurrency-in-2020/

https://www.investopedia.com/terms/c/creditcard.asp

https://en.wikipedia.org/wiki/Cryptocurrency#:~:text=A%20cryptocurrency%20(or%20crypto%20currency,of%20additional%20coins%2C%20and%20to

https://en.wikipedia.org/wiki/Debit_card

and special thanks to:

https://www.gingersoftware.com/grammarcheck

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Comments

The safety of your asset in cryptocurrency depends on the wallet you used, if you use a wallet that does not contain seed phrase then it is prone to hacking but if you have seed phrase no one can steal your money unless you share it .

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4 years ago

Yes ma'am that's right seed phrase is a good way to protect your account but it is hard to recover when you delete and forgot your seed Phrase, so the best way to do is to save it in different devices you use or write it in notebook. The best way to do is to keep your information to yourself or do not place the seed word in social media even if it is private or "only me" feature. Yes the safety is depends to the cryptocurrency's security

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4 years ago

Exactly you are right we should keep the seed phrase secretly and write it down to ensure we will not forget it because it's really hard to recover our accounts if that happens since cryptocurrency does not have any physical establishment to transact with, we are dealing with computers only, so the safety is on us.

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4 years ago