Topic: Cryptocurrency can not replace fiat currency. (Read 2221 times)

Agree. Crypto's biggest issue is volatility. Unstable prices on the market makes it more suitable as a store of value than digital cash. It's no wonder why serious merchants and businesses alike have accepted Fiat on top of crypto. Losses or gains can be reflected in a blink of an eye due to the uncertain nature of crypto. I believe that stablecoins are a more suitable replacement of Fiat, although some of them are linked to real USD reserves. Depending on the blockchain network they're based on, their fees could be extremely high or dirt cheap. Speed is also an important factor to consider here. Since Fiat is instant, stable, and reliable, it'll be actively used in the mainstream world for a very long time.

Nonetheless, no one knows what will happen in the future. With a friendly regulatory environment for the crypto/Blockchain industry, we could see the "impossible" someday. I'd expect Bitcoin and other major cryptocurrencies to have a stable price relative to Fiat to serve as a viable alternative to the world's monetary system. Only then, people will be able to use crypto more thoroughly as they would with Fiat. Considering that both ends are distinct from one another (either centralized or decentralized), it looks likely that they'll survive for a very long time. People will have a choice between crypto or Fiat for mainstream payments. The diversity of assets is what makes our world a better place. There's really isn't a dominant form of money, since each asset has its respective value/use cases in the mainstream world. Hence, neither crypto will replace Fiat or vice-versa. Just my opinion

That is the same in our country.

Since there are a lot of news surrounding around cryptocurrencies especially Bitcoin being used to scam people, they tend to think that it is only used that way. And since that is the inly news we hear from it, they will obviosuly think that it is a scam. That is the reason why I am not opening that I am a user of crypto, I just answer questions when they ask me.

If the demand for fiat currency is much lower than that of crypto then fiat will lose its existence and its use will be greatly reduced But the demand for crypto will increase as it is not owned by any government here and its use is widespread. The front will improve further However, cryptocurrency cannot replace fiat Fiat is the stable currency it is managed by the government.

I agree with you, sir. But in our country, I really think that cryptocurrency can't replace fiat. The mere fact that somebody is explaining something about crypto world they can not accept it. Usually they will ignore the good sides on go on with "it's a scam". Having a fellow countrymen who can't accept and doesn't have the means, this will not be implemented.

When talking about cryptocurrency you always think about bitcoin. Do not forget that stablecoins are crypto currencies as well and we are talking about them here as well. So if you want stability and not get dangerous but still want to be in the crypto world, you could perfectly accept something like USDT and people will pay that.

All we need is a payment method, a system where it is easy and quick for the buyer and seller to exchange USDT very easily, plus we also need that payment method company to increase adoption of USDT spending by going around marketing it like crazy, at first it would cost them a ton of money but if they can spend tens of millions of dollars for a long time while racking up debt like crazy, in the end they will have tens of thousands of places using their payment method to exchange money which would make them cash forever.

That is because fiat is fiat.

It is the currency used in a country, I don't think they will be letting a decentralized cryptocurrency take over the currency they can control, right? Fiat is the norm of payment in countries, the second ones are mobile wallets, mobile payments using applications, and other platforms. And I agree that we should just focus on increasing the adoption of it.

Exactly the point! Fiat has the full support of the government hence thinking or waiting for crypto to entirely displace fiat is like a chase of the wind. It is best to focus on how to increase cryptocurrency adoption by first integrating it into the payment systems in our various businesses and companies. This will raise the status of the market.

And that would be the primary reason why crypto is not yet used widely in business—the volatility.

From what I've read, for the vast majority of merchants,  crypto is something that they didn't learn to trust, plus according to Kris Marszalek, CEO, Crypto.com, "Crypro's price swings is not really conducive to merchant adoption."

However, nothing is impossible right? Who knows that in the future, merchants around the world would learn to take risks and adapt crypto payments. Or maybe crypto may even have stable price. We don't really know. It's just that, for now, crypto cannot replace fiat.

Nothing is impossible. At the first stage of crypto invention, very few people were familiar with this currency but now millions of people of the world are now investing and making trade in this field. At a time, countries of the world directly rejected the use cryptocurrency but now many countries have already permitted it and some other countries are thinking to permit it. You should know that the bitcoin is gradually occupying the world's market and I think it will be used by most of the countries in near future. So if the countries allow to use crypto as a digital currency for all types of transactions, it will take the place of fiat money within a moment. Maximum countries of the world are now technologically developed and already they are using digital currency for transaction. As a digital currency, using crypto like fiat money is just a matter of permission of the govt. I think it will be possible soon.

The question is, is it even really necessary? It could be an alternative, a second option. Unfortunately that´s absolutely against what a FED or other fiduciary institutions are representing. A CBDC could be a third option as a compromise of states fiat money and digital currency. That would be a technologization of the already existing money, so from one angle it would eb cryptocurrency but not what Satoshi had in mind when creating Bitcoin.

Business owners will not be able to maintain their accounting records if the balance changes due to cryptocurrency volatility. In this case, it will be difficult to calculate the necessary amount for paying taxes. And if the price of cryptocurrency decreases, this can lead to a loss for the business

I don't think the idea behind Satoshi's creation of Bitcoin was to displace fiat totally from the system. His aim was to create a payment system which offers better and revolutionary solutions to the old ones we had. Fiat already has support of the government and used as a significant metric for measuring the economic status of a country.

Agree, it's hard to trust a currency that has no stable market, people will still choose fiat over crypto. It will be hard for them especially business owners to have a currency that can change their income due to changes in the crypto market. Obviously, those who have a simple business and normal people, they will stick to the traditional way since they don't have the ability to adapt that will not affect them when a drop or growth in the market happens.

Exactly. Crypto is only useful as a store of value than anything else. That's largely because of its wild fluctuations in price on the market. As long as it stays that way, Fiat will continue to dominate the world's economy. It's no wonder why many merchants and businesses accept Fiat instead of crypto. I believe that the only way to truly grasp the benefits of crypto, is by relying on it as a unit of account. Getting paid or spending in crypto directly instead of Fiat, will greatly contribute towards the crypto economy. Only then, crypto can be used the same way as Fiat currencies today.

Despite all the hype surrounding crypto, it may never turn out to replace Fiat in the long term. Aside from price volatility, crypto is decentralized whereas Fiat is not. The latter is largely patronized by central banks and governments, giving people a sense of "confidence" when using it. Since no one controls crypto, it's a completely different story. The average person will find crypto unattractive as it's not supported by a trusted entity (unlike Fiat). It's the reason why we see so many people believe crypto to be a "scam", when in fact, it is not. This, alongside other issues, will make both crypto and Fiat head their separate ways for the foreseeable future. Expect to see everything remain the same, after the introduction of CBDCs. People will either choose crypto or digital Fiat for mainstream transactions, the same way they're doing right now. Just my thoughts

The ideal which prompted the creation of bitcoin or better still cryptocurrency has long been deviated from. 80% if not 100% of crypto enthusiasts fo not see cryptocurrency as a medium of transaction or a digital payment gateway but rather as an investment where they buy more when the price are on the decline then sell when it increases.

As long as the cryptocurrency remains volatile, it will not have a chance to displace the national currency, including fiat, from circulation. But given that the cryptocurrency exchange rate cannot be stable, we can assume that such a replacement will never happen.

Now that governments have recognized crypto to be a "force to be reckoned with", they have decided to join the crypto/Blockchain revolution. They found that there's no other choice, as crypto takes the world of digital payments by storm. Governments consider crypto to be a threat to the world's monetary system, so they're trying to launch their own digital currency solutions to avoid getting left behind. It's becoming evident that Fiat won't be able to replace crypto because of how big it has become over the years. In the same way, crypto can't replace Fiat because it's backed by the government and people tend to trust it more than anything else. As CBDCs come into play, there will be a "clash" between the centralized and decentralized world.

Countries like China and France are getting ready to launch CBDCs of their own, so it should only be a matter of time before physical cash fades into oblivion. The average person won't notice the difference when using a CBDC since it'll behave the same way as traditional credit/debit cards. Those who want censorship-resistance and privacy over their money will choose crypto, while those in favor of stable prices and mainstream adoption will choose digital Fiat (CBDC). Both sides have their unique advantages/disadvantages from one another. Crypto enthusiasts should accept reality, as no decentralized system can ever replace traditionally centralized ones. There will always exist power/dominance over the world's economy by entities such as central banks and governments worldwide. It is this reason why both crypto and Fiat will head their separate ways serving unique use cases for people in the mainstream world. Just my opinion

well,  volatility can be avoided and one thing that can make it possible is every country should create their own crypto under the power of the government. Without its guidance I doubt fiat will be annihilated.

Cryptocurrency was not meant to displace Fiat because it cannot since fiat has the full backing of the governments. Cryptocurrency was created to make payment better by eliminating third parties involved in transactions like the Banks. It will be best to let both coexist and achieve their own goals.

I have read the thread and I see that people are mostly skeptical about the governments vs. crypto confrontation. I believe, however, that the problem should be approached from a different angle – we just need a proper cryptocurrency.

Indeed, if we take a spherical government in a vacuum, it seems beneficial to oppose crypto and defend fiat, since it’s directly controlled by the government itself. It turns out, however, that there are plenty of governments in the world, which don’t act as a unitary system (unless we believe in all that ZOG and illuminati stuff).

Now suppose in some country the government plays a little rough with monetary policy and provokes a severe hyperinflation (hello, trillionaires from Zimbabwe). At some point, national currency starts costing less that the paper from which it’s made. As we remember, the Zimbabwe case was resolved by adopting USD as a national currency.

But what if in the same situation, there rises a political power that intends to adopt crypto instead? From the point of national sovereignty, crypto is apparently a better option, since it’s completely independent, unlike any foreign fiat currency. Once certain countries adopt crypto, and if the citizens actually asses the benefits of that transition, political entities in other countries can start using the ideas of crypto as a part of their political agenda to gain the sympathy of voters, which will lead to a wider adoption of crypto. Finally, even developed countries will be forced to engage in crypto, otherwise risking to be left behind the technical progress.

Seems like a fantastic novel? Well, remember how just a couple decades ago everyone laughed on Helicopter Ben for his devotion to Friedman’s helicopter money concept? Now we see a strong lobby for the concept inside the ECB and the US government itself started drops during the Corona crisis. What happened? Not so funny now?

I see crypto as a next technological step in the money evolution after fiat. The problem is that we currently do not have a platform “evolved” sufficiently. Bitcoin is definitely not up to the task due to its severe inconvenience and an inappropriate economy (if someone is interested about that fact, I suggest you to read about it here starting from page 88, it’s quite a long story for this post).

For that reason, three years ago I started a project of creating the ultimate blockchain platform that can handle the task. (Here it is, if someone is interested).