If the crypto world wasn’t cryptic enough, along come “mainstream” financial terms that are just as confusing.
We toss around words and phrases like they’re common knowledge, but we realize they’re not when we check what questions our customer service team fields.
One common question is, “What does ‘fiat to crypto’ mean?” And once we explain that, they want to know, “How do you convert fiat to crypto?”
Fiat is just mainstream legal tender, or official national currency, issued by governments. This includes the US Dollar, Canadian Dollar, Euro, Japanese Yen, etc.
Fiat isn’t backed by any commodity (so when the USD used to be on the gold standard, it wasn’t fiat). And the material it’s made from isn’t worth anything in and of itself. Instead, the value of fiat currency is determined by supply and demand — and because the government says it’s legal money.
Cryptocurrency is not a legal tender, and not endorsed or backed by any government. It’s a decentralized digital medium of exchange created by the science of cryptography and executed by computers.
“Fiat to crypto” means buying cryptocurrency with fiat money … so, for example, buying Bitcoin with USD.
The reason this is even a thing is because a few years ago, many online trading platforms only allowed you to trade crypto for crypto. So if you had Bitcoin you could trade it for Litecoin, or if you had Litecoin you could trade it for Ether. But you couldn’t just buy Ether or Litecoin with USD.
There were a few basic exchanges with limited options that let you buy bitcoin only, but you would have to transfer that bitcoin to a crypto-to-crypto platform (which often took days) if you wanted to own any altcoins. So when more advanced online exchanges were built, they would boast the “fiat to crypto” exchange possibilities as a feature that set them apart.
While that seems a little surprising now — because, after all, Bitcoin ATMs have always offered a fiat-to-crypto solution — that’s how the online world used to work. One platform to purchase and another platform to trade.
As hinted, Bitcoin ATMs have always used the fiat-to-crypto model. And a few (like 20%) also allow crypto to fiat, like Coin Cloud machines do. We’ll talk about that more tomorrow.
But whatever way you slice it, the fastest and easiest way to turn fiat to crypto is at a Bitcoin ATM. You just insert your cash, scan your mobile wallet and you own bitcoin or your choice of 30 altcoins. Oh, wait, that part is just Coin Cloud machines too. Most brands only give a few choices, if any.
Disclaimer: The information and views supplied on the Coin Cloud blog are for educational and entertainment purposes only. We are not financial advisors, so please do your research and consult with a trusted financial specialist before investing your money.
Founded in 2014 in Las Vegas, Nevada, Coin Cloud is the leading digital currency machine (DCM) operator. With over 4,500 locations nationwide, in 48 states and Brazil, Coin Cloud operates the world’s largest and fastest-growing network of 100% two-way DCMs, a more advanced version of the Bitcoin ATM. Every Coin Cloud DCM empowers you to quickly and easily buy and sell over 40 cryptocurrency options with cash.
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