Will Crypto Replace Fiat?
By: Ivy Riane
Tags: Finance, Cryptocurrency, Bitcoin, Investing, Sentiment

Image Retrieved from Bitcoin News

Cryptocurrency is a relatively new concept that supporters are convinced will replace government-backed fiat currencies in the near future.

Is this possible?

What would this transition look like?

It may be hard to imagine now, since crypto seems to bounce and then keep slipping further and further this year, but there is a lot going on in the technology of cryptocurrency behind the scenes.

And adoption seems to be happening at a rapid pace, with many companies finally making the jump into the crypto space.

Fiat is government-backed currency

There are many strong governments in the world but no government is truly untouchable and without its flaws. Currency becomes worthless if the government falls and the economy becomes unstable.

Crypto isn’t backed by any government and is decentralized. And even if every government in the world tried to ban crypto, it would just increase the demand to make it more valuable.

Mass adoption

Adoption has been a problem up to this point in the crypto space.

Bitcoin is much like the Internet in the 1990s when it was brand new. Only people that knew how to use it were active users and no one else believed that it would survive long-term. But, look at how that’s grown!

Who isn’t online now?

Square just started accepting crypto in New York State, which is a huge win for adoption. Read about it here.

Big money has started to move into the space in the past couple of months. Read about that here.

Technology is starting to become user-friendly and solar farms are being set up across the world to combat the growing energy needs of crypto mines.

Mass adoption will come when the technology becomes user-friendly and anyone can utilize resources to purchase and move around.

“Crypto will replace fiat in the next 5 years”

This bold statement was made by Tim Draper, well known venture capitalist and crypto advocate when in conversation with Forbes.

Tim Draper, Photo Retrieved from CNBC.com

Draper believes that fiat will eventually disappear as cryptocurrency becomes more mainstream because crypto is a more reliable store of value.

Fiat is bound by country borders with some currencies losing value the second you step across the border into another country.

There are many altcoins in the marketplace that are competing for investor capital at the moment.

How are we supposed to choose where to put our money?

Draper believes:

“They’re all going to interrelate … and there will be exchange rates for all of them. My guess is that it will centralize around a wallet that you have, and when you pay for that Starbucks, your wallet will optimize to whichever currency has most value.”

Futurist, Thomas Frey, has stated that crypto will replace 25% of fiat currencies by 2030 due to its efficiency.

Sweden is mostly cashless

Only 1% of Sweden’s transactions were completed with cash last year and many citizens are in favor of moving to a cashless society because they feel it reduces the risk of criminal activity due to high regulation and government scrutiny on cashless transactions.

What are your thoughts?

Do you think that crypto can replace fiat or will replace fiat in the near future?

If so, how long will it take to make the changeover?

I want to hear from you!

Thanks for reading,

Ivy