The rollercoaster ride that is Bitcoin began in 2009 and continues to this day. Explanations as to the inner workings of the cryptocurrency have for the most part been left to experts on the matter. However, the ever-increasing interest in Bitcoin usage and investing has caused the media, policymakers, and members of the general public to work harder at understanding the currency.
Due to the complex nature of the subject matter, many media outlets and other entities attempting to report on Bitcoin and other cryptocurrencies often confuse this technology with electric money. The truth of the matter is that e-money and cryptocurrency rely on a completely different set of business practices to operate and are backed by different financial institutions.
PSI-Pay has provided the following explanation to explain the main differences between the two technologies.
Electronic money is a method of storing conventional money that is typically regulated by a central banking institution and backed by fiat currency. Users are required to create money accounts electronically through services like ecoPayz.
The most common usage identified by PSI-Pay for e-money is the conducting of electronic transactions using an app. Prepaid cards can also be used once linked to an account to access money.
Bitcoin is different from electronic money in that it does not contain oversight by a central authority and works instead through peer to peer exchanges. These exchanges are validated by a collection of computers on a network. PSI-Pay points out that the value of Bitcoin is in a constant state of flux that is affected both by the demand of the currency as well as the faith the public places in the currency.
Cryptocurrency is an alternative to fiat money and is not printed in a similar manner. Instead, a network of computers operating globally are used to mine cryptocurrencies. The established limit on the number of bitcoin that can be in circulation is 21 million which ensures that the currency cannot be affected by inflation.
PSI-Pay is regulated by the FCA under the provisions set forth by the EU 2011 electronic money regulations and is globally recognized for its ability to provide rapid and secure payment methods for individuals across the globe.
PSI-Pay is also a MasterCard Principle Member and offers card programs for both physical and virtual usage by individuals and companies.