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Difference between CryptoCurrencies Vs Digital Payment Systems

There’s absolutely no doubt that the Cryptocurrencies have taken the world by storm and in the recent years we have seen a significant rise in the crypto wallets, gateways and much more. At the first glance it seems Cryptocurrencies are just another payment method, much like our digital payment wallets. 

This begs the question, “Why do we need Cryptocurrencies when we have digital payment systems?”. Although it may not seem like it, Cryptocurrencies and digital payment systems are two very different technologies. While digital payments are just limited to transactions, Cryptocurrencies are capable of a lot more. 

The Differences Between the Digital Payment and Crypto

It might seem like the differences between Cryptocurrencies and Digital Payment Systems is not much, after all both of these technologies help us in transferring the money right? Well actually they do, but there’s a bigger picture that we are yet to see.  

To start, Cryptocurrencies are digital assets that exist on the blockchain, and the blockchain is simply a public database that stores records of all Crypto transactions that have ever happened. The Cryptocurrencies exist in a purely digital world and have no real-life equivalent fiat currency. They are robust, secure and have very little transaction time and network fee. 

On the other hand, we have digital payment systems which make it easier to transfer cash. Digital payment systems are nothing new and they have been around for a long time. They make use of digital currencies which correspond to the real life fiat currency. They are managed by a centralised authority which in most cases is the government.  

Why is Crypto Payment Better Than Fiat Digital Payment Systems?

Cryptocurrency is nothing but a digital currency that leverages encryption algorithms to securely generate coins and conduct transactions. The existing market of such digital currencies has already crossed the threshold of US$1 billion and is expected to reach US$1.4 billion by 2024 growing at a steady pace of 6.18% CAGR.

Fiat currency is the conventional currency that is issued and backed by a country’s government. In the United States, for example, the US Dollar is the fiat currency. (And if you like that, you’ll probably like such stablecoins as Tether as it is backed by USD – accept USDT as payment!).


Cryptocurrencies outclass all payment systems when it comes to security. This is the reason why people are looking for a crypto payment gateway API to easily pay using cryptocurrencies. While digital payment gateways are susceptible to hacks, Cryptocurrencies provide out-of-the-box security because they are built on blockchain.  

But it doesn’t stop there, Cryptocurrencies are even better than our fiat currency notes in terms of security. Fiat currencies are always at a risk of being forged, but that can never be the case with Cryptocurrencies since they are secured by digital fingerprinting algorithms. 


Because of the Blockchain, Cryptocurrencies scale seamlessly. A blockchain has no centralised servers, it relies on the miners to keep itself up and running. As more miners get added to the blockchain network, the blockchain gets more secure and faster. 

This is very different from our digital payment systems which require air cooled server stations with continuous access to the internet and electricity to keep themselves up and running. To scale our traditional systems, we need more servers and often the cost of this entire operation has to be handled by a single authority. 


Cryptocurrencies are inherently robust because they are backed by the blockchain. Blockchain is a secure, self-reliant, self-scaling system which does not require any centralised server storage or continuous power supply to scale.

Since blockchains depend on miners to keep themselves running, they have close to zero downtime. This is something we can never expect from a digital payment system since it requires a centralised server storage with continuous power supply to keep themselves running.  


The feature that makes Cryptocurrencies stand out, is that they have no central authority to regulate them. No person or organisation has access to your account, except you.

Whereas Gpay, Paytm and Paypal are all owned by their respective organizations where they have complete access to your account, and all your private data is stored on their centralized servers. That’s the reason why crypto payment for business is considered better and reliable.


Digital payment systems are making the transactions easy with the existing fiat currency issued by the government and all the activity among this system is generally tracked by the higher authority in simple words the government. On the other hand, it’s not easy to track cryptocurrency. Each and every transaction is captured on the blockchain. They are robust, secure, and have very little transaction time and network fee.

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