When Will Bitcoin Become a Threat to Fiat Currency?
Cryptocurrencies emerged after the financial crisis of 2008. Launched back in January 2009, Bitcoin was the first cryptocurrency the world had ever known, and in the subsequent years, many others emerged. Today, after more than a decade since the BTC was designed, there are over 2000 cryptocurrencies in existence.
But how did cryptocurrencies become so popular? Do they pose a threat to fiat currency? What benefits does cryptocurrency have over fiat currency? All of your questions will be addressed in what follows.
Cryptocurrency vs. Fiat Currency
In this section, we will talk about the benefits of cryptocurrencies over fiat currency.
Decentralization
One of the most significant benefits of cryptocurrency is that it is decentralized. Governments have direct control over fiat currencies, but cryptocurrencies are not administered by any government or foreign institution.
The developers of the network have control and so do the users. Users are free to buy, sell, or trade cryptocurrencies with anyone residing anywhere across the globe.
The government can track fiat currencies, collect taxes, and even trace criminal activities. This gives them control over the economy of the country. But with cryptocurrencies, they lack any form of authority.
Safe and Secure
Cryptocurrencies are built on a secure blockchain that cannot be manipulated or hacked. Every transaction is verified and stored on a public ledger, and this data cannot be forged or tampered with. On the contrary, there is no such guaranteed security with fiat currencies.
No Middleman
Cryptocurrencies support peer-to-peer transactions, meaning there are no financial middlemen, such as banks, involved. This eliminates high transaction fees, and payments are processed faster.
People can buy, sell, or trade online directly with other users or via exchanges. This eliminates the need for a financial institution such as banks in the crypto world.
Circulation
Fiat currencies have to be printed by the government and circulated via financial institutions such as banks. But, cryptocurrencies can be mined by anyone, free of cost.
Are Cryptocurrencies a Threat to Fiat Currency?
Yes, cryptocurrencies are a threat to fiat currency. Many people and organizations worldwide are accepting cryptocurrency. More people are investing and trading in cryptocurrencies as well.
In 2017, there was a massive increase in the demand for Bitcoin. More people wanted to buy, sell, and trade in the digital currency, which led to the surge in its prices and made it all the more treasurable.
As more consumers adopt cryptocurrencies, the market will stabilize. Seeing this, more companies will begin accepting cryptocurrencies as a mode of payment. The whole financial industry can revolve around cryptocurrencies.
As more citizens adopt cryptocurrencies, governments will give in and acknowledge the powers of cryptocurrencies. The government will lay down more policies and regulations for cryptocurrencies, and who knows, they may come up with a digital currency of their own.
When Will Cryptocurrencies be a Threat to Fiat Currency?
As cryptocurrencies will be accepted globally, they will pose a threat to fiat currency. This may take years or even decades, but it is very likely to happen. Cryptocurrencies come with unrefuted benefits over fiat currencies, a fact that is lesser known to many people and governments.
There may be several steps to accomplish this, but someday, cryptocurrencies might replace fiat currency.
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