Will cryptocurrency replace fiat money?

1 Answer(s)

The cryptocurrency will disappear? Will it continue? Someone made a bold prediction: the largest currency is the most valuable, and then it will eliminate other small cryptocurrencies.

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When we see that a form of money is used in a crowd, it is a system. The choice of certain actors may be more weighty. The choice of the US government, including the claim that the US dollar is the legal currency, the use of the US dollar for various financial revenues and expenditures, and the issuance of new US dollars at a certain rate, certainly has a significant influence on the perceived value of the bitcoin price.

The balance of the value of the dollar will affect everyone’s decisions, the government can really influence, but everyone else has influence. One option is to think of something as money. Another option is to determine the purchasing power of each unit. We can imagine that the evolutionary changes occur in two directions. For example, something is a currency one day, but not a currency every other day. At the end of the American Civil War, the South Army’s currency was changed from currency to pure paper. On the other hand, the purchasing power of money will gradually change slowly, just like the already known inflation. When everyone else raised the price by 3%, then I also increased the price by 3%, which is very reasonable.

When people expect changes in the value of money, the currency itself will change. In looking for signs of currency change, we should look at the early history and new signals that may change expectations of the meaning and use of money. We can imagine two possible scenarios: one is gradual and the other is sudden.

There are so many gradual changes, and sudden changes are possible. Our current wealth is based on two monetary systems, the virtual economy has an internal currency, and then one currency can trade in one direction with the dollar. This is a very troublesome thing, and it may not be sustainable, but as long as legal and policy issues, such as what the virtual economy is, and how the virtual economy should be treated, these problems still exist, and it may maintain the current state of affairs.

When the government is determined, virtual currency may change rapidly. When the legal and policy status of virtual currency is finally established, a sudden change may occur in many government non-government economies.

Answered on July 20, 2018.
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