Your commercial real estate transaction does not close unless the loan is approved. You can also improve the cash flow if the interest rate for the loan is low. So the more you know about commercial loans, the better decision you can make about your commercial real estate investment.Loan Qualification: Most of you have applied for a residential loan and are familiar with the process. You provide to the lender with:
W2′s and/or tax returns so it can verify your income,

Bank and/or brokerage statements so it can verify your liquid assets and down payment.
In general the more personal income you make the higher loan amount you qualify. You could even borrow 95% of the purchase price for 1-unit principal residence with sufficient income.For commercial loan, the loan amount a lender will approve is based primarily on the net operating income (NOI) of the property, not your personal income. This is the fundamental difference between residential and commercial loan qualification. Therefore, if you buy a vacant commercial building, you will have difficult time getting the loan approved since the property has no rental income. However, if you
Occupy at least 51% of the space for your business; you can apply for SBA loan.

Have sufficient income from another commercial property used as cross collateral; there are lenders out there that want your business.
Loan to Value: Commercial lenders tend to be more conservative about the loan to value (LTV). Lenders will only loan you the amount such that the ratio of NOI to mortgage payment for the loan, called Debt Coverage Ratio (DCR) or Debt Service Ratio (DSR) must be at least 1.25 or higher. This means the NOI has to be at least 25% more than the mortgage payment. In other words, the loan amount is such that you will have positive cash flow equal to at least 25% of the mortgage payment. So, if you purchase a property with low cap rate, you will need a higher down payment to meet lender’s DCR. For example, properties in California with 5% cap often require 50% or more down payment. To make the matter more complicated, some lenders advertise 1.25% DCR but underwrite the loan with interest rate 2%-3% higher than the note rate! Since the financial meltdown of 2007, most commercial lenders prefer keeping the LTV at 70% or less. Higher LTV is possible for high-quality properties with strong national tenants, e.g. Walgreens or in the areas that the lenders are very familiar and comfortable with. However, you will rarely see higher than 75% LTV. Commercial real estate is intended for the elite group of investors so there is no such thing as 100% financing.Interest Rate: The interest for commercial is dependent on various factors below:
Loan term: The rate is lower for the shorter 5 years fixed rate than the 10 years fixed rate. It’s very hard to get a loan with fixed rate longer than 10 years unless the property has a long term lease with a credit tenant, e.g. Walgreens. Most lenders offer 20-25 years amortization. Some credit unions use 30 years amortization. For single-tenant properties, lenders may use 10-15 years amortization.

Tenant credit rating: The interest rate for a drugstore occupied by Walgreens is much lower than one with HyVee Drugstore since Walgreens has much stronger S&P rating.

Property type: The interest rate for a single tenant night club building will be higher than multi-tenant retail strip because the risk is higher. When the night club building is foreclosed, it’s much harder to sell or rent it compared to the multi-tenant retail strip. The rate for apartment is lower than shopping strip. To the lenders, everyone needs a roof over their head no matter what, so the rate is lower for apartments.

Age of the property: Loan for newer property will have lower rate than dilapidated one. To the lender the risk factor for older properties is higher, so the rate is higher.

Area: If the property is located in a growing area like Dallas suburbs, the rate would be lower than a similar property located in the rural declining area of Arkansas. This is another reason you should study demographic data of the area before you buy the property.

Your credit history: Similarly to residential loan, if you have good credit history, your rate is lower.

Loan amount: In residential mortgage, if you borrow less money, i.e. a conforming loan, your interest rate will be the lowest. When you borrow more money, i.e. a jumbo or super jumbo loan, your rate will be higher. In commercial mortgage, the reverse is true! If you borrow $200K loan your rate could be 8%. But if you borrow $3M, your rate could be only 4.5%! In a sense, it’s like getting a lower price when you buy an item in large volume at Costco.

The lenders you apply the loan with. Each lender has its own rates. There could be a significant difference in the interest rates. Hard money lenders often have highest interest rates. So you should work with someone specialized on commercial loans to shop for the lowest rates.

Prepayment flexibility: If you want to have the flexibility to prepay the loan then you will have to pay a higher rate. If you agree to keep the loan for the term of the loan, then the rate is lower.
Commercial loans are exempt from various consumers’ laws intended for residential loans. Some lenders use “360/365″ rule in computing mortgage interest. With this rule, the interest rate is based on 360 days a year. However, the interest payment is based on 365 days in a year. In other words, you have to pay an extra 5 days (6 days on leap year) of interest per year. As a result, your actual interest payment is higher than the rate stated in the loan documents because the effective interest rate is higher.Prepayment Penalty: In residential loan, prepayment penalty is often an option. If you don’t want it, you pay higher rate. Most commercial loans have prepayment penalty. The prepayment penalty amount is reduced or stepped down every year. For example on a 5 year fixed rate loan, the prepayment penalty for the first year is 5% of the balance. It’s reduced to 4% and then 3%, 2%, 1% for 2nd, 3rd, 4th and 5th year respectively. For conduit loans, the prepayment amount is huge as you have to pay for the interest between the note rate and the equivalent US Treasure rate for the whole loan balance for the remaining term of the loan. This prepayment penalty is called defeasance or yield maintenance.Loan Fees: In residential mortgage, lenders may offer you a “no points, no costs” option if you pay a higher rate. Such an option is not available in commercial mortgage. You will have to pay between ½ to 1 point loan fee, appraisal cost, environment assessment report fee, and processing/underwriting fee. A lender normally issues to the borrower a Letter of Interest (LOI) if it is interested in lending you the money. The LOI states the loan amount, interest rate, loan term and fees. Once the borrower pays about $5000 for loan application fees for third party reports (appraisal, phase I, survey), the lender starts underwriting the loan. It orders its own appraisal using its own pre-approved MAI (Member of Appraisal Institute) appraisers. If the lender approves the loan and you do not accept it, then the lender keeps all the fees.Loan Types: While there are various commercial loan types, most investors often encounter 3 main types of commercial loans:1. Small Business Administration or SBA loan. This is a government guaranteed loan intended for owner-occupied properties. When you occupy 51% or more of the space in the building (gas station or hotel is considered an owner-occupied property), you are qualified for this program. The key benefit is you can borrow up to 90% of purchased price.2. Portfolio loan. This is the type of commercial loans in which the lenders use their own money and keep on its balance sheet until maturity. Lenders are often more flexible because it’s their money. For example East West Bank, US Bank and some life insurance companies are portfolio lenders. These lenders require the borrowers to provide a personal guaranty for the payment of the loans. And thus these loans are recourse loans.3. Conduit loan or CMBS (Commercial Mortgage-Backed Securities) loan. This was a very popular commercial loan program prior to the 2007 recession where its market size was over $225 Billion in 2007. It was down to just a few Billion in 2009 and is making a comeback with issuance of almost $100 Billion in 2015. Many individual loans of different sizes, at different locations are pooled together, rated from Triple-A (Investment grade) to B (Junk) and then sold to investors over the world as bonds. Therefore it’s not possible to prepay the loan because it’s already part of a bond. These are the characteristics of conduit loans:
The rate is often lower. It is often around 1.2% over the 5 or 10 year US Treasury rates compared to 1.85-3% over the 5 or 10 year US Treasury rates for portfolio loan. Some CMBS loans have interest only payments. Since the rate is lower and borrowers are required to pay interest only, the LTV can be over 75%. Low rates and high LTV are the key advantage of conduit loan.

Conduit lenders only consider big loan amount, e.g. at least $2M.

Lenders require borrower to form a single-asset entity, e.g. Limited Liability Company (LLC) to take title to the property. This is intended to shield the property from other the borrower’s liabilities.

The loans are non-recourse which means the property is the only collateral for the loan and the borrowers do not have to sign personal guaranty. And so these loans are popular among investment firms, REIT (Real Estate Investment Trust), TIC (Tenants in Common) companies that invest in commercial real estate using funds pooled from various investors.

If the borrower later wants to sell the property before the loan matures, the new buyer must assume the loan as the seller cannot pay off the loan. This makes it harder to sell the property because the buyer needs to come up with a significant amount of cash for the difference between the purchase price and loan balance. Furthermore, the lender/loan servicer could reject the loan assumption application for various reasons as there are no strong incentives for it to do so. The loan servicer can also impose new conditions to loan assumption approval, e.g. increase reserve amount by several hundred thousand dollars. If you are a 1031-exchange buyer, you may want to think twice about buying a property with loan assumptions. Should the lender reject your loan assumption application, you may end up not qualifying for the 1031 exchange and be liable for paying capital gain. This is the hidden cost of conduit loan.

Even when you are allowed to prepay the loan, it costs an arm and a leg if you want to prepay the loan. The prepayment penalty is often called Defeasance or Yield Maintenance. Basically you have to pay the difference in interest between the note rate of your loan and the applicable US Treasury rate for the remaining years of the loan! This amount is often so high that the seller normally requires the buyer to assume the loan. You can compute the defeasance from www.defeasewithease.com website. Besides the defeasance, you also have to pay 1% loan assumption fee. This is another hidden cost of conduit loan.
Conduit loan may be the loan for you if you intend to keep the loan for the life of the loan that you agree to at the beginning. Otherwise it could be very costly due to its payoff inflexibility.Lenders Coverage Area: Commercial lenders would do business in areas they are familiar with or have local offices. For example East West Bank will only consider properties in California. Many commercial lenders don’t lend to out-of-state investors.Lenders Coverage Property Types: Most commercial lenders would only consider certain types of properties they are familiar with. For example Chase would do apartments and owner-occupied office buildings but not retail properties or gas stations. Westford Financial specializes on church financing. Comerica concentrates on owner-occupied properties.Lenders Escrow Accounts: Most lenders require borrowers to pay 1/12 of property taxes each month. Some lenders require borrowers to have repairs and/or TI (Tenants Improvement) reserve account to make sure the borrowers have sufficient funds to cover major repairs or leasing expenses should existing tenants not renew the leases.Conclusion: Commercial loans are a lot more complex and difficult to obtain with loan approvals more unpredictable than residential loans. As an investor, it is in your best interest to employ a professional commercial loan broker to assist with your commercial loan needs. By doing so, you will vastly improve your chances of paying lower interest rates, avoid potential pitfalls and improve your chance on getting the loan approved.

Deciding to start a business can be one of the most exhilarating decisions you make in your life. We are living in a world wherever everyone wants to make extra money and add to his income. Most people have achieved this by acquiring great business ideas. When one starts up a company, he must be ready to meet competition. It is important to note that you would not need to become rich or popular to succeed in business but have to think smartly. But there are a lot of moving parts and many different elements to consider.10 basic tips essential to start a business successfully.Tip 1: Get inspired and Love your ideaEvery business begins with an idea you may have imagined of opening your own business for years, or motivation may have hit you suddenly. Nevertheless of the source, the first step of starting your own business is coming up with a business idea. And as important as your idea, you must in love with the idea.Tip 2: Do Your Research / learn everything about the businessYou’ve recognized your big idea, now it’s time to balance it with the reality. Are you truly ready to start a business? Answer the questions below and see what you need to prepare yourself for business. For a small business succeed it must fulfill a need, solve a problem or offer something the market wants.You can identify this need in many ways by doing research, focus groups, and even trial and error.As you search the market, some of the questions can be:• Is there a need for your anticipated services or products?
• Who needs it? (Target Costumers)
• Are there other companies offering similar services or products right now?
• How is the competition?
• Can or how will your business fit into the market?Tip 3: Make a Business PlanYou need a business plan in order to make your business idea a reality. If you expect to seek monetary support from an investor or financial organization, a formal written business plan is a must.Even if you don’t need monetary support, a simple business plan can give you precision about what you hope to accomplish and how you plan to do it.In overall, your business plan should summary your business goals and the inspiration behind them, as well as your plan for realization of your goals in terms of marketing and funding.Tip 4: Planning FinancesOpening a small business doesn’t have to involve a lot of money, but it will involve some investment.There are a number of methods you can fund your small business:• With Small business grants
• By Financing
• With Small business loans
• Or Angel investorsYou can also attempt to get your business off the ground by bootstrapping, using as little capital as necessary to start your business.Tip 5: Business StructureYour small business can be an individual ownership, a partnership, a limited liability company (LLC) or a corporation. The business structure you might choose will impact in many factors from your business name, to liability, and how you file your taxes.You can choose an initial business structure, and with time re-evaluate and change your structure as your business grows and needs to be changed.Tip 6: The Business NameThe name you choose plays a role in almost every aspect of your business, so you want it to be a good one. Make sure you think through all of the possible consequences as you explore your options and select your business name.Once you have selected a name, there is the need to check if it’s trademarked, currently in use and if stills free you will need to register it. A individual proprietor must register their business name with either their state or county clerk. Corporations, LLC, or limited corporations usually register their business name when the creation paperwork is filed.These days you need to have a website, so please don’t forget to register your domain name once you have selected your business name. The best domains and more valuable online are the ones ending with .com.Tip 7: Licenses and PermitsThere are a range of small business licenses and permits that may apply to your situation, depending on the type of business you are starting and where you are placed. You will need to inquiry what licenses and permits apply to your business during the initial process.Tip 8: The Business LocationSetting up your place to work is essential for the operation of your business, whether you will have a home office, a shared or private office space, or a retail location. You will need to reflect about your place, equipment, and overall setup, and make sure your business place works for the kind of business you will be doing.Tip 9: Accounting SystemOne of the most essential systems for a small business is an accounting system. Your accounting system is essential in order to build and manage your budget, set your charges, conduct business with others, and file your taxes. You can set up your accounting system by your own, or hire an accountant to take away some of the work.Tip 10: Promote Your Small BusinessAs soon your business is up and running, you need to start attracting customers. You’ll want to initiate with the essentials by writing a single selling offer and building a marketing plan. Explore as many small business marketing ideas as you can so you to choose how to promote your business most successfully. Completed these business start-up actions, you will have all of the most important small business bases protected, and be prepared for small business success.15 Business Ideas to Generate Extra IncomeIf you want or need to start a side job because you still need to wait a little bit longer to start your own business, here are 15 suggestions for you.1. Make money BloggingIf you enjoy writing, find a theme you’re passionate about and start a blog dedicated to covering that theme and anything else interesting you enjoy to talk about. All you need is a laptop, some time, and inspiration to consistently write. It can start as a hobby and turn into a business over time. Creating a blog is free, but if you want to look professional it can cost less than $ 12 per month.2. Buying or selling on eBayThanks to internet there are more opportunities to make money than ever to buy and resell products for extra money. There are lots of people buy at a discount and resell them on eBay for profit.3. Freelance writingIf you’re great with words, you might be capable to find some work as an online freelancer. A variety of publications need online content in the form of product, stories, service descriptions, and reports, and if you have the talent and ability, you could easily be the one to create them. Luckily, all you need is a computer and Internet connection to get started. You can start here freelancer.com4. Social media expertNow a day almost everyone uses Facebook, Twitter, and Pinterest, but did you know that many companies are willing to compensate people to support them managing their social media accounts and sometimes you can do it part-time from home. If this appeals you, to find social media jobs you can start by writing companies with a social media presence and visiting sites like Elance.com for opportunities.5. Proofreading and editingDo you have strong English skills and outstanding grammar? You may have chances to work as a proof-reader from home. Marketing for this can be hard; seek out those who might actually be able to use your services and advertise directly to them.6. Virtual assistantMany companies and individual professionals like having someone who can check and answer their email, organize task lists for them, someone who can update their calendars, and perform other administrative tasks, with minimal communication. The best of being a virtual assistant is that you can offer this service from home with a good Internet connection.7. Website designIf you know a little bit about web design you can approach small businesses in your community, as they could use a very basic web presence to tell others about their business. These businesses usually don’t have a large budget for websites and create a great yet simple website is for you, get a bunch of clients from your local community, create sites for them, and maintains them for a small fee. You can easily get enough businesses to have a nice side business of your own with a low investment.8. Affiliate marketingCertain types of online businesses will pay you to promote their products and encourage sales. If you’re interested in learning more, check out affiliate marketing programs such as Click-bank, Commission Junction, and these websites are trustworthy and you can earn money by posting their products in your blog, website or Facebook. The secret of online business is all knowing targeting the right public and marketing efficiently. It can be overwhelming with all the information available online as more than 50% of the information is just a waste of time.9. Become a business or life coachIf you are a good speaker and passionate about the business world and able to inspire and encourage others in a unique way, you could marketing your services as a business or even a life coach. Take your passion and expertise to the next level giving advice and suggest actionable steps people can take to progress their professional and private lives.10. Start a resume writing serviceIf you’re excellent at writing remarkable resumes that in the end result in people getting the job, contemplate advertising those services. Most of your work will spin around writing, editing, designing, and proofreading, so you will only need few supplies outside of your computer and basic software to get started.11. App DeveloperWeb app development is the creation of application programs that reside on remote servers and are delivered to the user’s device over the Internet. Now a day you can do apps with software’s you don’t really need to be a weirdo to do it, you can be an app developer for Facebook for instance and of course you can do it part-time and home based.12. Business ConsultantIf you are high organized and skilled being a good problem solver this job is for you. Companies bring Business Consultant to identify their problems, provide solutions and optimize companies. The only investments are your skills.13. Data Entry ServiceMany companies and online businesses require some type of manual information tracking, creating a vast amount of data entry work. Although there are many work-at-home scams related with data entry work, there are a lot of genuine chances available for genuine data entry businesses. If you are an excellent typist with an eye for detail, a data entry business is a great idea for you.14. Freelance WriterIf you have the skill to write and inform people in a certain area, you can write small books or guides and sell them online, the biggest books platform is Amazon.com, where you can display your books for free and when they are sold, you will receive a percentage from the selling. Payments are made every month depending on your sales. Investment is only your time to write and imagination.15. Internet ResearcherThe Internet provides a vast amount of information. If you can quickly and efficiently navigate through that wealth of information, and essentially find a needle in a haystack, you can create a very successful business as an Internet researcher. Search for this kind of job online or about a company which is looking for this of service.I give you only a glimpse what you could do, and these are just a few ideas, but many ideas were left behind.First of all I advise you to think what you like to do as a hobby or in your free time, why don’t you make profit from what you are doing already?You have the world as your disposal, but for a business to work out the first thing from all things is, it doesn’t matter what you intent to do, but you have to love it. If you love what you do it doesn’t feel like a job, you will be doing it with joy and this way you will be successful.There are some side business opportunities that have grown more common in the past few years. And thanks to internet you have much more opportunities, ideas and help to develop your business.

Crypto currency vs. Fiat currency

Are you aware of the fiat currencies and the crypto currencies? They both are currencies in one form or the other and are open for public use across the world. But they are both different and distinct in their own ways. There is always one group that favors the use of cryptos, while the other has a soft corner for the fiat currencies.

In cashless society- crypto money play a huge role

If you have a look at the market of the 1970s and 1980s, you will find that the cash played the dominant role. But, with the change in the technology, electronic transactions have become the usual norm. Today, more and more people are influenced in becoming the cashless society. With the progress towards the cashless society, cryptocurrencies have a big role to play.

Crypto currency and fiat currency are always at loggerheads

Cryptocurrency and fiat currency are popular types of digital currency, especially when it is about an online transaction. They both are currencies currently in use in the market but have some differences in them. There is a hell lot of hypes that you will hear on a daily basis comparing the crypto money and the fiat money. This article will highlight the difference between the two in a more comprehensive and clear manner.

Differentiating in what the currencies stand for

Before going for the difference between the two, you must understand what do they stand for and how are they are defined.

The fiat currency is a legal tender that has the support of the central government, and it operates in the physical form. For instance, US dollars, British Pounds, Euro etc. On the other hand, the crypto currency is a non-legal tender, and doesn’t have any backup from the central government or bank.
Hence, the difference between crypto currency and fiat currency is noted as follows:

• Crypto-currencies are decentralized and global in nature. There are no one entity or government that controls the currency with their laws and regulations. The Fiat currency is centralized, under the control of the laws and regulations of the banks and government.

• Crypto-currencies have their existence only in the digital domain. On the other hand, you will find that the fiat currencies have a tangible and physical existence.

• There is a limited supply of crypto-currencies with a maximum set of them getting supplied in the market. Whereas, the fiat money has an unlimited supply as the government and bank are entitled to produce coins and paper money whenever the situation is required.

• The Bitcoin and other crypto type currencies are created by the computers, while the fiat currencies are issued by the local government and the banks.

• Cryptocurrencies are presented as the public and private code pieces. On the other hand, the fiat currencies are presented in the form of coins and paper money.

• The value of the crypto currencies is not recognized by the supply and demand of the market. Whereas, the fiat currency value is determined by the market regulations of supply and demand.

The different types of crypto and fiat currencies

In the last one decade, the popularity of crypto type currencies has emerged as a huge success. It was in 2009, when Bitcoin was first introduced, and years after several other types of crypto currencies have emerged. Starting from Litecoin. Dogecoin, Ripple to the Dcash and Zcash, there is a plethora of them. On the other hand, the fiat currency has a rich and ancient roots, with the Great British Pound, that dates back to 775 AD. It is considered as the oldest currency in the world that is still in use.

The differences in the anonymity between the two currencies

When you are using the fiat currencies, you need to undergo a user identification or verification process. You are asked to upload a recent picture of yourself and some of the required documents to be issued as per the public authorities. You don’t need to undergo any of the required processes with the crypto currencies. Though your personal information and confidential details don’t get public, but all your transactions are recorded and tracked in both the fiat and the crypto currencies.

Fiat currency vs crypto currency: transparency level

• The transparency level with the crypto type currencies are considered to be more. This is because the revenue streams are displayed in a public chain. Everyone can witness their own and others’ transactions.

• The fiat or govt. currencies are not transparent, as there are not public chains to see the revenue streams of the people.

A comparative historical roots

If you compare the crypto money with that of its counterpart, fiat or government currency, you will find that their existence and creation brings the difference. The Fiat or government currency, dates back its existence as early as 775 AD with the introduction of the Great British Pound. This is why fiat type currency is easily accepted by the people all over.

On the other hand, the crypto coin was perhaps first introduced only a decade ago, with the introduction of Bitcoin in 2009. The challenge that the Bitcoin and other crypto currencies face is catching up with the immense popularity and increasing fan base of the fiat currency. Crypto currency, is no doubt gaining importance and popularity in the economic market, but it has still not been accepted widely in the society as the fiat currency.

A comparative history of the two currencies:

• It was in the 11th century, when the Chinese Song dynasty was perhaps the first one to issue the paper money. It was not allowed to exchange with valuables like gold and silver or silk.

• There were Tally sticks that were introduced as a fiat or government currency. 1100 Tally sticks were introduced as a combat for the shortages in gold.

• 1971, was the year, when the fiat currency received a worldwide recognition. President Nixon introduced it in order to eliminate the dollar pegging system to gold.

• It was in 1998, when the idea of an anonymous electronic cash system emerged by Wei Dai. Bitgold-the very first crypto currency was created by Nick Szabo, but it didn’t receive as much attention as Bitcoin.

• In 2009, Bitcoin was introduced in the market, that became the first crypto currency that was accepted across the globe. In 2011 and after, a series of several other crypto currencies were introduced. Some of the popular ones include, Litecoin, Dogecoin, Ethereum, Ripple, Zcash, Dash and so on.

The traits of both the currencies

The potential of the crypto type currencies and fiat currencies, accessing their traits is important. You will find that in some of the criteria, Bitcoin and other crypto currency is superior than the fiat or government currency, and in some cases, the latter surpasses. It is absolutely your call to choose the type of currency (crypto type currency or fiat type currency) based on your personal needs and requirements.

Let us compare their traits with respect to certain factors.

• Both the crypto coins and fiat type currencies are interchangeable in nature.

• As per the portability is concerned both the currencies secure more or less the same position.

• With respect to the non consumable criteria, crypto currency and fiat type currency have the equal status.

• Crypto type currencies have high durability as compared to the fiat-currencies that have moderate level of durability.

• Both the crypto or virtual currencies and the fiat or government currencies ensure secure and safeguarded transactions and exchange.

• Crypto or digital currencies are highly divisible in nature. On the other hand, the fiat type currencies are moderately divisible.

• In terms of the transaction process, the crypto currencies are easy and hassle free. Whereas, on the other hand, the traction process associated with the fiat currencies are easy, but not like the cryptos.

• The crypto based currencies are decentralized and global in nature, unlike the fiat currencies that are centralized and functions under the laws and regulations of the government.

• The crypto based currencies have high scarcity, where as, the fiat currencies are unlimited as the government can issue coins and paper money whenever there is a need.

• The crypto based currencies are based on mathematical algorithms, and are programmable. The fiat currencies are not at all programmable.

• The fiat currencies are sovereign in nature, while the crypto currencies are not.

The process of the functioning of the currencies

You can find the significant differences between the crypto or digital currencies and the fiat currencies with the way they both operate and the transaction process that take place. They are contrasting in nature. The transfer of money using the Bitcoin is very quick, and you absolutely don’t need any third party association.

On the other hand, if you are involved with the money exchange using Fiat type currency, a mobile wallet is in use. You can exchange an amount of e-money that gets transferred into the equal e-value amount. Both the fiat and the crypto currencies enable you to purchase everything that you desire. But the processes involved are absolutely distinct from each other.

Depending on the things you purchase, you will find that one currency form is better than the other. This is absolutely your choice.

Is Bitcoin, a crypto currency better than the fiat-currency?

The long term benefits and the capability of the Bitcoins is still not established. But it has been predicted by the crypto currency gurus and experts, that they will go a long way, especially revolutionizing the way the online transactions are done. In the current market, the Bitcoin is mainly included in the online casinos and the gambling, but it is not limited to it.

Furthermore, when you compare the fiat currencies, the Bitcoin allows you to seize the power and authority from the banks and the government since it is not controlled. The cryptography based currency has the capability to create or come up with the free market capitals. Fiat currencies are affected by the inflation and the changes in the market, unlike the crypto based currencies. Such aspects make individuals believe that cryptograph based currencies will soon take over the mainstream currencies and bring a transformation in the way the money is used.

Why is Bitcoins considered to be a better aspect than the fiat type currencies?

• Bitcoin gives you the opportunity to re-create a free market capitalism.

• The power of controlling the money is absolutely with the individuals, and not with the banks like the fiat type currencies.

• When there is an inflation, the Bitcoin is not affected. But the Fiat type currency will be easier to lose and get affected by it.

• The Bitcoin currency is easy easier to exchange and transfer as compared to the fiat or government currencies.

• The transaction fees involved with the Bitcoin are way cheaper and easily affordable.

Crypto currencies seem to be a favorable option among the people

The fiat type currencies are the centralized and legal way of exchanging money. But, the crypto currencies have acquired immense popularity in the past few years. There will never be anyone who would act as a middle man, like the case with the banks. Moreover, the cryptos are way cheaper and less expensive that the conventional fiat currencies.

Send money anywhere directly without waiting for the bank’s approval

You can send money to anyone in the world directly, and it is super fast. The money gets cleared within a few minutes time. You don’t have to wait for the traditional clearing and verification processes of the banking systems, which might take up to several days to get a clearance. Since it is decentralized and doesn’t come under the law and regulations of the government, nobody has any power to do anything with your account.

The blockchain technology has a very big role to play

Thanks to the crypto currencies, that gives us the power and the authority to become our very own bank, and take control over our finances. It is because of the blockchain technology that offers a higher level of sophistication while dealing with the finances. In fact, there are some mainstream financial industries that have started incorporating the idea of the technology.