Dec 20, 2018 15:30 UTC
Dec 20, 2018 at 15:30 UTC
Will Cryptocurrencies Replace Fiat Money?
Cryptocurrencies are the currency of future.
It is what the generations ahead of us will grow up on, even if not explicitly.
The rate at which the popularity of cryptocurencies is rising, it is quite evident that in a decade, it will be difficult to spot someone who is not aware of their existence.
Although it would be presumptuous on our part to claim that cryptocurrency will completely overtake fiat currency in the future.
Nevertheless we can draw some inferences based on the trends that we can see in the world around us.
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Cryptocurrency vs Fiat Currency: Who Wins?
When comparing cryptocurrency against fiat currency, the former has an edge over the latter in various sectors.
- Let’s talk about costs incurred. Fiat currency drains a significant amount from the treasury in order to bear the printing charges and distribution costs. Whereas cryptocurrency eliminates the need for such miscellaneous costs, since it is completely virtual.
- Fiat currency is completely regulated by the government and they exercise control over the currency and its value. On the other hand, cryptocurrencies are decentralized and do not require to be regulated by a third party. It works on a peer to peer exchange basis.
- One crucial area in which Fiat has an edge over Crypto is in terms of being ease of use. We have to consider that a large portion of the world’s population is illiterate and do not have basic knowledge to operate a virtual form of payment.
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Will Cryptocurrency Overtake Fiat Currency?
Keeping in mind the benefits of cryptocurrencies that I have just underlined for you above, most people would say that it is definitely the better option amongst the two.
Despite that, it is evident that cryptocurrencies have a long way to go before they can even dream of becoming a widely accepted alternative to fiat currency.
Governments and traditional banking economies are the primary gatekeepers of fiat currency and the traditional monetary economy. They will not be open to a swift change to virtual cash as of now.
Some governments, like that of Venezuela, have already shifted and accepted cryptocurrency as a national form of payment. Petro, the cryptocurrency of Venezuela has been in the news of late, especially in the context of pulling venezuela out of the economic crisis that it found itself in.
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