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June 15, 2018
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Despite the rapid growth of the cryptocurrency space, fiat money is still king in the real world. Even the most enthusiastic crypto-’hodler’ will, when they emerge from their dark caves to get some daylight, eventually have to use government-issued fiat money to pay for everyday goods and services. But much has changed in the world of fiat money. Although they are issued by central banks and declared legal tender by the government, they are not what they used to be. No longer backed by gold, they have little intrinsic value. And with contactless credit and debit cards being the norm, we are increasingly moving towards a cashless society. The next logical step would be to transform the economy from one of fiat currency to one of cryptocurrency. But what would that look like?
More people start using it
Without the people interested in using cryptocurrency, the project will never become a reality. Whilst the interest in cryptocurrency is big enough to hold a Bitcoin rally, it is nowhere near popular enough to be considered a household name. In order for cryptocurrency to become the standard, pretty much everyone would have to know about it and have some experience using it.
Businesses adapt to it
In order for people to use cryptocurrency, more shops and other businesses would need to start accepting it. Although a few businesses and charities have begun accepting cryptocurrency, there is a long way to go before we can use them to buy groceries at the local corner shop. Online stores will probably be the first businesses where it will be a mainstream to pay with Bitcoin. Physical stores will have to catch up so they do not lose out on business.
Governments will (begrudgingly) adapt
The governments will be one of the last local institutions to accept the transformation from fiat to crypto. The main reason for this is that it is in the government’s’ interest to maintain the status quo. Fiat money gives them a lot of control over a country’s economy, and they will be unlikely to relinquish that control easily. China is a great example of how governments are fighting off the crypto-revolution.
National and international spread
Once consumers are using it, businesses are accepting it, and governments are taking steps to implement it, cryptocurrency will be a nationwide legal tender. Once enough countries have reached this stage, an international economy based on cryptocurrency can begin to develop. This is probably not going to happen in the near future, due to the large inequality between the countries around the world.
What can be done to speed up the process?
It will take a lot of patience on the part of crypto-fans, as these things move a lot slower than one could want. The only way to speed up the process of transforming the economy from being based on fiat money to one based on cryptocurrency is (you guessed it) to use cryptocurrency. As much as possible, in as many places as possible. The more people use it, the more businesses will accept it, and the faster governments will have to act on it.
