Crypto and Fiat Currencies Are Worlds Apart, Here Are the Reasons Why

Bitcoin's third halving on May 11, a 50% reduction in the BTC block subsidy that rewards miners for validating transactions and securing the network, represents a clear distinction between fiat monetary systems governed by whim and crypto monetary systems executed through software.

The predominant monetary systems of the world are fiat systems that are backed by the sovereign entity of the state through arbitrary decree.

The reason why state-managed currencies gained prominence is because people agreed to the unwritten social contract behind the money, entrusting the state to manage the complexities of such a system.

While fiat monetary systems feature monetary policies highly subject to what the lawmakers believe is necessary, Bitcoin and other cryptocurrencies are decentralized, autonomous monetary systems with rules hardcoded from their launch.

This preprogrammed, automatic deflationary measure is unprecedented in the history of money and presents a stark contrast to the dominant fiat systems of the world.

To no small degree, the weaknesses and contrivances of the legacy financial system are a system design problem.

The financial systems and intermediaries at the top of the pyramid in closer proximity to the rulers operate better than the disjointed and inefficient systems further down the chain.

While fiat systems are subject to full control by their overseers, cryptocurrencies such as Bitcoin are governed entirely by the execution of software that is itself rooted in high mathematical certainty.

While fiat systems as implemented by the U.S. government are showing considerable strain and favoritism in the midst of a global crisis, the economic clock of Bitcoin is ticking without interruption in a series of predetermined protocol upgrades of its supply schedule based not on a whim but by programmable design since launch.

While the network is distributed and decentralized, as opposed to the fiat system with a literal central bank, the issuance of Bitcoin goes through certain intermediaries before it can circulate freely: the miners.