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I’m pretty sure the caption already raised some arguments in your mind. For every cryptocurrency and blockchain enthusiast, this is expected. Despite cryptocurrencies and blockchain technology gaining a whole lot of other use cases recently, the goal to replace the fiat system with decentralized payment solutions running on a distributed LEDGER still lives in the mind of every cryptocurrency enthusiast.
You probably got some cryptocurrencies in your wallet and you wish someday they are going to be the ‘new cash’, or at least they will be accepted by major stores. A good number of cryptocurrency projects have succeeded in doing this. Travala provides cryptocurrency holders an avenue to book flights and travel to over three hundred locations and pay via cryptocurrencies. Popular adult video website – PornHub had also announced a ‘crypto-only’ subscription scheme after major e-payment firms withdrew their services from the platform.
The crypto space has endured a lifelong debate on the superiority of cryptographic tokens over the much older fiat system, an event likely to continue throughout its lifespan. But despite many blockchain projects making several breakthroughs in building portable spend systems on the blockchain, cryptocurrencies are still very far from being the new cash.
Cryptocurrencies are accepted by many stores and utility providers. Tesla recently announced it had started accepting bitcoin for the purchase of its products. Much progress has been made as regards the mass acceptance of cryptocurrencies. Only very few commodities or services are yet to create a direct exchange portal with cryptocurrencies, however, these cryptocurrencies are yet to be regarded as ‘money’.
Dreams are cute, especially when they are good ones! I got reserved respect for people who believe Cryptocurrencies will one day be a nationally accepted means of exchange. They are the reason we made it this far. I’m one of these people.
Well, from a basic viewpoint, if cryptocurrencies are used in exchange for goods and services, then they are money…at least in this particular instance. In the real sense, this is a bit different from the proper definition of money. Other items such as rare metals, shopping vouchers, and bank cheques (of course!) have been used in a similar instance, but these are not ‘cash’…in the real sense.
Bitcoin cash (SV and ABC) were forked from the original bitcoin core blockchain to create a portable means of everyday spending activities. Bitcoin was particularly created for a similar purpose. Contemporary crypto space makes it hard to see these tokens as cash, regardless of how much cryptocurrency enthusiasts dream of this. Cryptocurrencies as a medium of exchange are more like mere vouchers with an intrinsic value.
A major difference between cryptocurrencies and vouchers in this case is the pronounced fluctuation in the value of cryptocurrencies. A stable cryptocurrency used in exchange is more like vouchers, and cryptocurrencies prone to price fluctuations are more like company shares…but not close to cash in any case. This is unarguably if looked at closely.
The ‘gold’ reputation suits bitcoin more than ‘cash’. The value of Cash in essence is determined and backed by more generalized entities. The value of bitcoin and cryptocurrencies are determined mainly by market dynamics and the progress of blockchain technology, something very similar to company shares and rare metals.
‘Cash’ reputation is a far reach for a virtual commodity whose value is highly volatile. Legal recognition of existing cryptocurrencies as cash is an even much harder task. Cryptocurrencies will need to undergo extreme modification to be considered real cash. Universality, a very much preached feature of cryptocurrencies is a concept also seen in gold and other rare metals – the closest and real alternatives to ‘cash’ cryptocurrencies.
Cryptocurrencies serving as utility tokens of blockchain projects that solve some real-world problems or presents a new and more efficient way of handling real-world issue are closer to achieving their goals. It is the very best application of cryptocurrencies. Bitcoin and similar cryptocurrencies serving as a store of value are more realistic.
Bringing some aspects of blockchain technology into fintech and revolutionizing the financial system to incorporate some virtues of blockchain technology into the mainstream financial system will surely create a more efficient financial system. The fiat system may never die, but if blockchain technology and cryptocurrencies take a healthier route and fix some of its biggest issues, then they stand a chance of penetrating the mainstream financial system…but not totally replacing fiat. Cryptocurrencies are very much different from fiat in the mode of operation and replacing fiat with cryptocurrencies might just be a long-lasting illusion.
Most Cryptocurrencies are more utilities and securities than ‘cash’. Shifting the focus to building utilities on the blockchain and cryptocurrencies being the traditional tokens of these blockchains could benefit cryptocurrencies more than the ‘cash’ dreams. Several regulatory moves and technological modifications of current blockchain technologies are required to develop cryptocurrencies closer to being used as cash. This surely changes the concept.
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