7/24/23: Bitcoin vs. CBDC

Bitcoin VS CBDC. Both crypto, therefore similar?

Bitcoin and Central Bank Digital Currency (CBDC) are both digital forms of currency, but they have fundamental differences in terms of their nature, issuance, and underlying principles:

✅ Bitcoin: Bitcoin is a decentralized cryptocurrency that operates on a public blockchain. It was created by an anonymous entity or group of people known as Satoshi Nakamoto and introduced in 2009. Bitcoin's issuance and operation are not controlled by any central authority, government, or financial institution.

❌ CBDC: CBDC is a digital form of a country's fiat currency issued and regulated by the central bank. It represents the digital equivalent of the traditional paper money issued by the central authority. CBDC is entirely centralized and controlled by the respective central bank.

✅ Bitcoin: The supply of bitcoin is limited to 21 million coins, making it deflationary in nature. New bitcoins are created through a process called mining, where miners use computational power to validate transactions and add new blocks to the blockchain. The issuance rate follows a pre-defined schedule that reduces over time.

❌ CBDC: The issuance of CBDC is entirely controlled by the central bank, which has the authority to create and manage the digital currency. Unlike Bitcoin, the supply of CBDC can be adjusted by the central bank based on its monetary policies, similar to how traditional fiat currency is managed.

✅ Bitcoin: Bitcoin operates on a decentralized network, meaning no single entity or central authority has control over its transactions or governance. It relies on a distributed network of nodes worldwide to validate and secure transactions.

❌ CBDC: Central banks have full control and oversight over CBDC transactions. They can monitor and regulate the usage of CBDC, enabling them to implement policies like interest rates, capital controls, and financial regulations.

✅ Bitcoin: Bitcoin transactions are pseudonymous, meaning they are associated with cryptographic addresses rather than personal information. While the identities of users are not directly tied to their wallets, the transaction history is recorded on a public ledger, called the blockchain.

❌ CBDC: CBDC transactions can be designed with varying degrees of privacy and anonymity. Central banks may choose to incorporate features that allow for user privacy, but they can also implement stricter identification and monitoring measures for regulatory purposes.

Crypto currencies like Bitcoin should be the first choice for you if you want to build your decentralized financial eco system. There are plenty of decentralized crypto assets available to choose from. We are happy to support you on your journey. Just let us know if you want to learn how to become fit for #crypto.