Cryptocurrency has become extremely popular in the past decade, to the point where some transactions are made exclusively with virtual coins. But you have to wonder, will cryptocurrency replace fiat money in the future? This is very hard to say, and there are multiple factors to take into consideration, as you can imagine.
What are the advantages of cryptocurrencies?
One of the reasons why people will be open about using cryptocurreny is because they are not as easily manipulated when compared to fiat money. Cryptocurrency might also bring the notion of universal basic income, which comes hand in hand with virtual currency. There are some programs that already experimenting with the universal basic income and they only rely on crypto.
Another major advantage related to cryptocurrency is the fact that it can eliminate intermediaries in daily transactions. That can be a major issue, and it really needs to set the tone in a clever and professional manner. It might end up helping consumers while also cutting some operational costs for businesses.
Pros and cons of fiat money
Fiat money still remain the legal tender in many countries all over the world. And it’s easy to see why. First, you have a high amount of stability, which is not something that you will encounter often in the cryptocurrency world. On top of that, you have regulators that will keep the economy afloat and push inflation or recession away. Investors are more likely to go with something stable like fiat money and abolish or just ignore the existence of cryptocurrency in the first place.
But there are downsides too. Fiat money can bring in recession at times too. And since banks have control over fiat money, that means you barely have any anonymity and you always have to rely on them for financial transactions.
Is it a good idea for cryptocurrency to replace cash?
As you can imagine there are some concerns related to cryptocurrency replacing fiat money. The main issue here is that virtual currencies are mostly unstable. Their value is always changing, with rare moments of stability at times. And that’s a problem when you try to base an economy on something inherently unstable.
Then there’s also the fact that governments find it hard to regulate crypto and they are extremely focused on not using it due to the overall limitations and lack of control.
Is cryptocurrency a good solution for investors?
That depends on a variety of factors. One of the main issues that investors are dealing with in regards to virtual coins is the fact that they fluctuate. Sometimes they appreciate, but other times you can end up losing money as a crypto investor. That’s obviously going to be quite the challenge, and you need to do everything in your power in order to eliminate such issues naturally and with great success.
While some people used cryptocurrency to buy real estate or invest in stocks, they are few and far between. Most investors still rely on the ease of use provided by fiat money, so it will be very hard to transfer them to a paper-less society where they only have to rely on virtual money and token. It will most likely happen only if there will be more stability. But at this time that doesn’t seem to be the case.
However, we can expect the number of cryptocurrency users to double until 2030. Combined with more technological improvements, we can expect people to be more and more focused on crypto within the next 2 decades. Of course, challenges can arise in the long run, and it also comes down to how fiat money will be used in our society.
ICOs and cryptocurrency startups change the way we think about crypto
One of the top advantages of cryptocurrency is the fact that numerous startups rely on it and the decentralized aspect to offer solutions to our daily problems. And that’s great, because there’s a lot of focus on value and growth. Startups understand and harness the true power of cryptocurrencies, while also making it easy for potential customers to become investors on their own.
Will cryptocurrency replace fiat money?
It’s safe to say that fiat money will still exist for a very long time. Unless the entire society transfers itself to virtual coins, it will be very hard to diminish the importance and value of fiat money. It will take a lot of time, maybe even a century until cryptocurrency will fully replace fiat money. Or, depending on how our world evolves, it might bring in those changes a lot sooner.
It’s very hard to tell, but cryptocurrency is already replacing fiat money in many places and we can already buy many things, including houses, cars or items online with crypto. It might take a while until it will fully replace fiat money, but the potential is certainly there
