Home >> Cash Money and Digital Money Which Is The Right Choice

Cash Money and Digital Money Which Is The Right Choice



What is Money?

Money is the legal tender – currency or currency – that can be used to exchange goods, debts, or services. Sometimes it also includes the value of assets that can be easily converted into cash right away.

Historical forms of money

Cash is used as long as the goods and services are traded and its form depends on the culture in which it operates. Many civilizations in recent years have used coins minted from precious metals, including copper, bronze (an alloy of copper and tin), silver, and gold, although other early civilizations used seashells or heavy goods, including salt, and sugar.

In modern times, cash consisted of coins, the metallic value of which is negligible, or paper. This modern form of cash is the fiat coin.

Paper money is a newer form of cash, dating back to around the 18th century and its value is determined by the trust of its users in the government that supports the currency. This ability to determine price has far-reaching effects on an economy. It can affect inflation, or the rate at which prices for goods and services rise.

The more prices are inflated, the less purchasing power each banknote or coin has. Inflation can cause all kinds of problems for an economy that does not yet understand the concept; In general, monetary authorities try to keep inflation to a minimum and avoid deflation altogether.

Deflation is the opposite of inflation – lowering prices – and has the potential to lead to economic depressions if severe.

Checks, debit cards, credit cards, online banking and smartphone payment technology have reduced the need for people to keep money in any form.

Understanding physical money

Money, in a corporate environment, usually includes bank accounts and marketable securities, such as government bonds and bankers’ receipts.

Although physical cash usually refers to cash, the term can also be used to indicate money in bank accounts, checks or any other form of currency that is easily accessible and can be quickly converted into physical cash.

Understanding digital currency?

Convertible digital currency is an unregulated currency that can be used as a substitute for real and legally recognized currency even though it does not have legal tender status. Convertible digital currencies are easily exchanged for fiat currencies like dollars through cryptocurrency exchanges.

These currencies are largely different from state-backed currencies like the dollar or euro, as they have no physical presence and are not issued by a government. Rather, they operate on decentralized blockchain networks. Bitcoin, Ether and Ripple are examples of convertible virtual currencies.


Indeed, paper money, if carefully issued and regulated, is without any disadvantage. All countries issue paper currency and, in normal times, do not suffer from it in any way. It can cause great dissatisfaction to the masses. When paper money is over-issued, there is inflation and prices rise.

People can lose faith in the currency and it can become useless. Such a situation arose in many European countries during and after World War I, and later more recently in China. It is impressive that the Indian government was able to control inflation, while even countries like the UK were not able to control it.

Despite these drawbacks, money is still a useful way to maintain value. Business owners need to have a comprehensive plan for estimating revenue and expenses in order to have enough money to meet the needs of the business, while keeping the rest as other assets in order to minimize the disadvantages of inflation and returns. low relative. Ideally, a business owner should keep enough money for daily use and emergencies and invest the rest to make bigger profits.

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