The inception of the cryptocurrency almost pondered, while bitcoin seemed to be uncontested. Until this year, bitcoin reckoned for the massive majority of the industry’s market capitalization, while within weeks, the ethereum, pimple, and other cryptocurrencies hastened to catch up. Bitcoin being the lead, there has been some exchange of words among the industry analyst, if cryptocurrencies are actual currency? In inclusion, other questions are also rising that, even bigger transformations will occur or not? Though the venture is that cryptocurrencies could supersede fiat currency wholly.
The findings and the survey available on the web have mentioned that bitcoin will probably replace fiat currency by 2050. A staggering panel of experts thinks about hyper bitcoinisation at the rate of 54 % when bitcoin will take over global finance by the year 2050.
Although cryptocurrencies still need to take control worldwide, fanatics have assumed that there are probably any signs of making it in the traditional business space, even to a limited extent.
A small gist fiat currency
It is a currency owned nationally or centrally by the government, which is not possessed by any commodity such as gold or silver. The worth of fiat money depends largely on public faith in the countries central bank.
Widely known examples of fiat currencies are the pound sterling, the euro and the US dollar.
In contrast to fiat, commodity money relies on its intuitive value. This is defined from which material it is made of, that is gold, silver coins, etc. while the fiat has no intrinsic value, it is derived as an assurance by the government or central bank that the currency is accomplished to be exchanged for its worth in goods.
Value points to a Crypto Future
A report by Futurism emphasizes some of the possible consequences which can make cryptocurrencies surpass fiat currencies at some point in the future. The main concern is that cryptocurrencies cannot be altered quite as easily as fiat currency, as the reason for their decentralized and unconfined status.
Besides that, cryptocurrencies could better endorse the theory of a universal basic income than fiat currencies would. Cryptocurrencies have already experimented with some programs to distribute a universal basic income.
Viable situation if Cryptocurrencies Replace Cash
This scenario has some huge challenges and concerns; as cryptocurrencies would swap cash in terms of usage, the traditional money won’t have any worth despite the means of recourse. The new models are made to better understand the substitution of cryptocurrencies by cash. Of course, the adaptability would be complicated with the transition, as the cash would leave people in huge debt of assets. The financial institution would likely be in a huge dilemma for changing their ways.
The initial bitcoin insanity saw the offers coming from vast businesses to accept the cryptocurrency, which has steadily reduced wreaking back the infidel about the usage in medium exchange.
Governments themselves would suffer beyond the repercussions of having a cryptocurrency future on individuals and financial institutions. Governmental control over major currencies is vital to regulation in many ways, and cryptocurrencies would operate with far less government interference. For example, examine how much of a currency to print in response to external and internal pressures. Rather, the generation of new coins or tokens would rely on independent mining operations.
If you say there is money in something, you will say that activity will produce a profit. Money is accepted as a general medium of trade for economic exchange.
Cryptocurrency is decentralized digital money that’s based on blockchain technology. Bitcoin and Ethereum are famous editions of cryptocurrencies but there is more than 5,000 various cryptocurrencies inflow. The international cryptocurrency market is expected to grow from $910.3 million in 2021 to $1,902.5 million in 2028 at a CAGR of 11% in the prediction period.
Bitcoin is the next big thing in making while the cryptocurrencies have already started to capture the market. So if you think you can buy a new phone using it, it’s not possible. New clothes? not possible. For this fiat currency is still used. Now the question arises- Will that ever be possible? Can Bitcoin and other cryptos replace traditional money? Well, all that is explained below –
Practically telling, as long as the sender and receiver agree anything can be considered money. That is what we call a barter system. People would get tomatoes in exchange for lemons. Or, flour in exchange for rice. But this system was not working as quantity measurement was not correct. This happened because every item had its own importance. For example, 1kg of gold is so many times more valuable than 1kg of cotton.
Then came the paper money which provided an exact amount of value to each commodity. A particular group of people believes that paper currency will lose its value or vanish like other currencies over a period of time. One point was also about the centralization of fiat currency. It gives authority to banks and governments over the hard-won money of people.
People can benefit from fluctuating digital currency and enhance their assests :
Factors urging the use of digital currency –
- Focus on mitigating Financial crisis, and regional instability drives the virtual currency’s demand :
Economic disaster is a important problem happening in traditional money sector. Economic instability disrupts the finance by dropping the value of money. For example : India’s economy was affected when India’s ICICI bank had prominently faced the Lehman brother crisis in 2008. There is no main effect of the money crisis on it as its price is balanced internationally. Cryptocurrencies are higher alternatives in financial instability for regions with unsteady financial structures, which is probably a main driving factor for the market.
- Increasing Adoption of Bitcoin to Witness Exponential Demand for Cryptocurrency Market
Bitcoin is one of the most famous and vastly accepted digital currency around the world. The increasing popularity, rising interest of investors, and supporting regulations are moreover expanding the market’s growth. Increasing bitcoin money value and the facility to offer awards for transactions are also going up.
Factors stopping the use of digital currency –
- Misuse of Virtual Currency and Security Attacks Confines the Adoption of Cryptocurrencies
Because cryptocurrencies are an unauthorized, decentralized and uncontrollable exchange platform, many regulators are concerned about the increased misuse of these currencies by criminals. Many illegal acts such as tax evasion, money laundering, and terrorist financing have been shown to have been committed by criminals using digital money. In July 2019, Treasury Secretary Steven Mnuchin was on Facebook, Inc. by terrorist financiers and money launderers. Expressed concern about the misuse of its patented Libra digital currency.