Crypto Is To Fiat As The Car Is To Horse-and-Buggy

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    brennanhm

    Published on Jun 04, 2022
    About :

    Hey guys,

    Today I wanted to talk about the idea that, in the future, we will be paying for goods and services with decentralized cryptocurrency, rather than a national fiat currency.

    A lot of people believe that cryptocurrency only has value because it is measured in US dollars, as that is what you need to actually buy anything. The thought of everything being priced in cryptocurrency is a little too far-fetched for them to handle.

    But the truth is, the prices of goods and services have been measured by other commodities in the past, so what's to say that they can't be measured by a digital commodity in the future.

    Recency Bias

    Most people tend to think that tomorrow will be very similar to today, oftentimes oblivious to small changes and trends that are occurring on a daily basis.

    Consider how thousands of years ago goods and services used to be priced in gold, not fiat. If you were to tell a person back then, that in the future, they would be paying for goods and services with a plastic card, they would have looked at you like you're crazy.

    This is similar to how, if you went back to the 90s, and told people that in a few decades they would be making payments with some "magical internet money" via a smart phone, and they would have thought you're a insane. However, throughout history new technology has always come around to disrupt old norms.

    Think about how, back in the early 1900s, the majority of the population got around via horse and buggy. When Ford came along and invented the automobile, a lot of people thought it was a pointless invention, as they could still get from point A to point B via their horse carriage. They failed to see the benefits of a car, such as its speed and comfort.

    These days, cryptocurrency is being casually dismissed in a similar way. A lot of people cannot see the benefits of using a cryptocurrency over fiat, such as its censorship-resistance, limited supply, global scale, and the transparency of an open blockchain.

    Sometimes it takes a major event, such as the suspension of a person's bank account, or hyperinflation of a national currency, for people to recognize the benefits of a new technology.

    The Future of Money

    The best way to predict the future, is to look at the trend.

    Back in the 1910s and 1920s, despite the fact that the majority of people were still getting around via horse and buggy, it was clear that the adoption of the automobile was increasing.

    Throughout the 2000s and 2010s, even though most people were still being entertained by cable television, the adoption of streaming services like YouTube and Netflix was growing rapidly.

    For those who are paying attention, the adoption of cryptocurrency is also on the rise, regardless of the fact that most people are still using fiat.

    We can see the number of global businesses accepting it, and the number of nation states who are adopting, is on the upswing.

    First it was El Salvador, and now more recently Central Africa Republic that adopted Bitcoin as legal tender. Just a few weeks ago several heads of state from Africa, Latin America, and the Middle East joined a conference in El Salvador to talk about Bitcoin and the possibility of making it legal in their countries as well.

    People will often argue that they still need dollars to pay for their food, gas, rent, etc. But the truth is, if they moved to one of these countries that has adopted Bitcoin, they could very well survive without cash or a bank account. It may be a little bit inconvenient for the time being, similar to how dial-up Internet was a pain back in the 90s, but the trend towards greater adoption and usability is on the rise.

    Out With The Old, In With The New

    Finally, we need to keep in mind the wreckage happening in the traditional financial system. As central bankers around the world increase their country's money supply at an exponential rate many currencies are facing the real possibility of hyperinflation.

    As the value of fiat currencies get decimated, individuals and businesses will be seeking alternative forms of payment which retain value. And as we can see in places like Venezuela and Argentina, cryptocurrencies are proving themselves to be the most viable alternative.

    Of course, fiat currency won't go down without a fight as traditional power structures attempt to transition digital dollars into CBDCs, but don't be surprised if in a decade of two fiat money is a thing of the past and we are all using our smart phones to make our purchases with a variety of cryptocurrencies.

    Do you think that crypto will eventually replace fiat currencies, or that crypto will always remain a niche form of money?

    Be sure to follow me here on HIVE so that you don't miss out on my other articles.

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    On Twitter @brennanhm

    Sources

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    El Salvador finance conference

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    crypto adoption trends elsalvador caf bitcoin

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