Will Cryptos Replace Fiat Currency in the Future?
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No one knows exactly what the legendary character, Satochi had in mind when he conceived the idea of Bitcoin. However, one fact is now evident before us, that is, the emergence of cryptos as a store of value and a medium of exchange for goods and services.
*In short, cryptos took the world by storm in 2017, delivering profits in geometric folds. Afterwards, several individuals and a couple of businesses around the world have continued to adopt cryptos as a means of payment. Now, therefore, the big question arises, will cryptos replace fiat currency soon?
Before I make efforts at answering this question, it is pertinent that we look at the definition of fiat currency.
Fool.com defines fiat currency as,
a legal tender whose value is backed by the government that issued it.
From the definition above, cryptos cannot replace fiat currency because they are not backed by law. And from the look of things, no government is ready to back cryptos, at least for now. And as long as cryptos are not backed by law, no matter how generally accepted cryptos become, they cannot replace fiat currency. At best, cryptos will continue to exist as complementary money as we presently have it.
........What If Countries Begin to Develop and Endorse Their Own Cryptos?
Yes. You read that correctly. What if countries begin to develop their own cryptos, cryptos that are backed by the laws of the issuing countries? Will such cryptos, galloping on the wings of the law, replace fiat money? The answer, for me, is still NO. Here is why:
Volatility
Cryptos, as we presently know it, is generally volatile with the possibility of prices to surge or decline by up to 30% or more within 24 hours. I consider this as the greatest threat militating against the emergence of cryptos as a replacement for fiat, even if such cryptos have government endorsement.
Or, how will you possibly explain the fortune of an employee who gets a $1,000 salary in the morning and then discovers that the money had declined, without any spending, to $700 by evening? If you were the employee, would you want to be paid with cryptos? Obviously, no.
The Possibility of a Hack
As you probably know, the most "secured" crypto wallet may be found wanting when the evil days come, when the hackers unleash their terror. I assume that you've not forgotten the DAO hack, of 2016, the great hack which witnessed the flight of $70m into the thin air. It would have been almost impossible, I believe, for fiat currency to have vanished that way without any trace. Can you now see why the triumph of cryptos over fiat is a near impossibility?
Will You Employ the Bankers When They Become Jobless?
Hey. The replacement of fiat with cryptos, if this ever happens, means that all the bankers of the world will become jobless, as there will be no need to save cryptos in the bank. I know you don't like the present exploitative banking system and you love the freedom which cryptos offer. But, buddy, will you employ the bankers if cryptos ever replace fiat? I doubt if you, or anybody else, would. So, the aristocratic bankers of this world will do everything to ensure that cryotos don't replace fiat.
Conclusion
Cryptos, no doubt, have indeed revolutionized the conceptualization of money. Nevertheless, the configuration of cryptos, at the moment, have several drawbacks that cannot make it replace fiat currency. I know you love cryptos, as I do myself, but we have to face the facts, which is, that cryptos can only perform as a complementary money not a fiat currency. I trust this meets you well.
References
https://news.bitcoin.com/big-difference-electronic-fiat-cryptocurrency/
https://www.google.com.ng/amp/amp.coincodex.com/article/51/5-biggest-crypto-hacks-of-all-time/
https://www.google.com.ng/url?sa=t&source=web&rct=j&url=https://www.fool.com/investing/general/2015/12/06/fiat-currency-what-it-is-and-why-its-better-than-a.aspx&ved=2ahUKEwjvoojxibjbAhVCUlAKHS2hCgAQFjANegQIAxAB&usg=AOvVaw1FvCUbYCjfsgRxpNuXJecF
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