Bitcoin or Traditional Money? Pros, Cons & What to Know

Money Maker

“Cash Is King? Not So Fast, Mate”

Ah, cash. Good old paper money.

It’s been stuffed in shoeboxes, lost under couch cushions, and, let’s face it, probably helped buy a dodgy kebab after a late night out.

But here’s the thing mate: cash is starting to look a little outdated.

Enter Bitcoin the new kid on the financial block, promising a faster, borderless, and more digital future.

So, what’s better: the paper you can hold or the digital gold you can’t?

Whether you’re a tech nerd or someone who still uses cash for the Sunday Bunnings sausage sizzle, you’re about to find out what’s right for you.

This guide lays it all out. The pros, the cons, and what you need to know to make sense of it all.

Let’s be honest: traditional money is the reliable old Toyota Hilux of finance.

It’s been around forever, gets the job done, and still buys you a cold one at the servo.

But along comes Bitcoin — flashy, disruptive, and sounding like something straight out of a sci-fi flick. Suddenly, your wallet feels a bit outdated.

So, what’s better?

The cold, hard cash we’ve used for centuries or Bitcoin, the digital gold of the modern age?

I’ll break it all down — the pros, cons, and real-life value of both.

Whether you’re a crypto newbie or someone who thinks “blockchain” is a new CrossFit move, I’ve got you covered.

Let’s get stuck in.

What is Traditional Money? A Quick Recap

Traditional money, or fiat currency, is the cash you know and love — Aussie dollars, U.S. dollars, euros.

It’s issued and controlled by governments and central banks. President Richard Nixon’s decision to suspend US dollar convertibility to gold in 1971. The US dollar become the reserve currency of the world (all curriences trade with the USD) this system of national fiat currencies has been used globally.

You can hold it in your wallet, spend it at Bunnings, or shove it under the mattress for a rainy day.

Pros of Traditional Money:

• Tangible — You can hold it, stash it, or lose it down the couch.
• Stable (relatively) — Governments keep inflation and interest rates in check.
• Universally accepted — You can spend it anywhere, from your local café to the corner shop.

Cons of Traditional Money:

• Inflation eats its value over time — your $5 Maccas meal now costs $12.
• Transaction fees — Banks love to clip the ticket.
• Government control — More printing equals less buying power.

What is Bitcoin? (And Why It’s Different)

Bitcoin is a digital currency powered by blockchain technology.

Unlike traditional money, it’s decentralised — no bank, government, or suit-wearing overlord controls it. Transactions happen peer-to-peer and are secured through a network of computers.

Think of Bitcoin as digital gold: there’s a limited supply (21 million Bitcoins — forever), and it can’t be printed willy-nilly.

You don’t carry it in your pocket; instead, you store it in a crypto wallet.

Pros of Bitcoin:

• Decentralised — No government interference.
• Inflation-proof — Fixed supply keeps its value scarce.
• Low transaction fees — Especially for sending money overseas.
• Digital and global — Send Bitcoin anywhere, anytime.

Cons of Bitcoin:

• Volatile — The price jumps like a kangaroo on a trampoline.
• Learning curve — Wallets, exchanges, blockchain… it’s a lot at first.
• Not universally accepted — Can’t exactly buy a sausage roll at the bakery with Bitcoin yet.

Real-Life Comparisons: Bitcoin vs Traditional Money

To really see the value, let’s put Bitcoin and traditional money head-to-head with some real-world examples.

1. Sending Money Overseas

Traditional Money: You send $1,000 to your cousin in the UK. Your bank hits you with an international transfer fee (around $30), gives you a rubbish exchange rate, and takes 3–5 days to process it. Cheers, bank.

Bitcoin: You send the same amount in Bitcoin. It arrives in minutes, the transaction fee is a couple of bucks at most, and there are no middlemen to rip you off.

Value to You: Bitcoin saves you time and money when transferring funds internationally. Perfect for expats, travellers, or anyone who’s sick of banks milking their wallet.

2. Storing Value Over Time

Traditional Money: You leave $10,000 in your savings account. Over 10 years, inflation chews away its value. What could buy you a used car now might barely get you a second-hand bicycle later.

Bitcoin: You store $10,000 worth of Bitcoin. Yes, it’s volatile, but its scarcity often makes it a hedge against inflation. Over the same 10 years, Bitcoin’s value could increase dramatically (if history is any guide — however not a guarantee of future returns).

Value to You: Bitcoin acts as a long-term store of value for people who are worried about inflation or central banks printing money like Monopoly notes.

3. Spending and Payments

Traditional Money: You buy a coffee with your card. The café owner pays a 1–3% transaction fee to the bank. Small change, sure, but over time it adds up.

Bitcoin: Some businesses accept Bitcoin directly, cutting out the middleman and transaction fees. Plus, Bitcoin works globally — try paying with Aussie dollars in Thailand and see how far you get.

Value to You: Bitcoin reduces payment fees for merchants and allows for seamless global transactions. Great for online businesses, travellers, or digital nomads.

Bitcoin for Beginners: How to Get Started Safely

Alright, so Bitcoin sounds pretty good, right? If you’re new to crypto, here’s how to start without stuffing it up:

1. Start Small: You don’t need to drop $10,000. Start with $50 or $100 to get comfortable.
2. Choose a Reputable Exchange: Platforms like CoinSpot (the one i use since 2017), Binance, or Coinbase make buying Bitcoin easy.
3. Store It Safely: Move your Bitcoin to a wallet — either a hot wallet (app-based) or a cold wallet (hardware like a Tangem — I found this one the easiest to setup and use, took me 5-minutes).
4. Ignore the Hype: Bitcoin’s price will go up and down. Think long-term.
5. Learn More: Understanding how Bitcoin works helps you avoid scams and rookie mistakes.

Which is better?

Here’s the truth: it’s not about choosing Bitcoin or traditional money. It’s about using both where they make sense.

• Traditional Money: Still king for everyday purchases, stability, and convenience.
• Bitcoin: A modern, decentralised option for sending money, storing value, and hedging against inflation.

If you want to dip your toes into Bitcoin, start small, stay safe, and keep learning. It’s not as scary as it sounds — and who knows? You might just end up being the smartest person at brunch when someone mentions crypto.

The Best of Both Worlds

Traditional money isn’t going anywhere anytime soon. You’ll still need cash for that Bunnings snag or a late-night servo run.

But Bitcoin offers something new: a way to save, send, and invest without banks or borders slowing you down.

So, whether you’re a crypto sceptic or just dipping your toes in, the future of money is here — and it’s worth understanding.

Ready to get started?

Grab a small amount of Bitcoin, store it safely, and join the financial revolution.

Worst case? You’ll have a great story to tell Dave at the pub.

Resource Recap — Bitcoin for Beginners

· Read blogs, watch YouTube videos, or even grab a book like The Bitcoin Standard. Educating yourself helps you make better decisions and not fall for scams.

· Cold Wallets: Offline wallets (like USB drives or cards) that keep your Bitcoin safe from hackers, such as the one I use — Tangem.

· In terms of exchanges, some good options for beginners include Binance, Coinbase, or CoinSpot (a local Aussie favourite — this is also the one I use and have been using since 2017).

· IBIT: Blackrock’s Bitcoin ETF — ishares Bitcoin Trust (Australia/US) this is listed on the NASDAQ (IBIT) and I’m invested in this ETF, along with holding a small amount of bitcoin via the exchange Coinspot (been on here since 2017) and majority of my bitcoin via cold storage wallet — Tangem wallet (use my link an get 10% OFF automatically).

Here are some straightforward metrics that beginners can use to assess Bitcoin (see below).

CoinMarketCap illustrates many of the below metrics on one page — https://coinmarketcap.com/currencies/bitcoin/

1. Price: The current market value of Bitcoin, indicating how much one Bitcoin is worth in fiat currency (e.g., USD).
2. Market Capitalisation: Calculated by multiplying the current price by the total number of Bitcoins in circulation, this metric reflects the total market value of Bitcoin.
3. Trading Volume: The total amount of Bitcoin traded within a specific period, showing the level of market activity and liquidity.
4. Hashrate: Measures the total computational power used to mine and process transactions on the Bitcoin network. A higher hashrate suggests a more secure and robust network.
5. Mining Difficulty: Indicates how challenging it is to mine a new block. The network adjusts this periodically to ensure blocks are added at a consistent rate.
6. Transaction Volume: The total number of transactions processed over a certain period, reflecting the network’s usage and adoption.
7. Number of Active Addresses: Represents the count of unique addresses participating in transactions, serving as a proxy for user activity.
8. Fees per Transaction: The average fee users pay to have their transactions processed, which can indicate network congestion and demand.
9. Mempool Size: The aggregate size of unconfirmed transactions waiting to be added to the blockchain. A larger mempool can signal higher network congestion.
10. Supply Metrics: Includes the total supply of Bitcoin, the number of Bitcoins mined, and the remaining supply to be mined, highlighting Bitcoin’s scarcity.

For beginners, focusing on these metrics can provide a foundational understanding of Bitcoin’s market dynamics and network health.

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Meta Description: Bitcoin vs traditional money — which is better? Learn the pros, cons, and key differences between Bitcoin and cash in this beginner-friendly guide.

This is Part VI of your Bitcoin for Beginners: The Quickest Way to Learn About Bitcoin series

Cheers,

Stevo — Armchair Banker MAppFin, AdvDipFP, ADA

‘Meet Stevo, the financial wizard behind Armchair Banker. With 15 years of experience in investment banking, corporate finance, and markets, Stevo’s résumé is so impressive it could intimidate a spreadsheet.’ For more ‘Ah-ha’ money and finance guides visit www.armchairbanker.com and www.armchairbanker.com Follow us on socials subscribe to our newsletter Medium — https://armchairbanker.medium.com/

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DISCLAIMER: The information in this article does not constitute personal financial advice. Consult your adviser or stockbroker prior to making any investment decision.

MORE DISCLAIMERS: Stevo is not a Financial Adviser, however, works as an Investment Banker assisting ASX listed companies with retail capital raises. All opinions expressed and written by Stevo, including all other ‘Armchair Banker’ contributors is for informational and entertainment purposes only and should not be treated as investment or financial advice of any kind. Any information provided from our articles, blogs and written opinions is general in nature and does not take into account your specific circumstances. Armchair Banker and its contributors are not liable to the reader or any other party, for the reader’s use of, or reliance on, any information received, directly or indirectly, from any content by Armchair Banker in any circumstances.

The reader should always (we’re serious about this):

1. Conduct their own research

2. Never invest more than they are willing to lose

3. Obtain independent legal, financial, taxation and/or other professional advice in respect of any decision made in connection with this video.

Full Disclosure: Stevo holds Bitcoin at the time of publishing. Using my provided links/affiliate links could result in a payment or fee discount for Stevo, helps keep the lights on mate.

Originally published at https://www.armchairbanker.com on December 21, 2024.