Although the Bitcoin was invented in 2008, it experienced a terrific boom by the end of 2013 only. At the beginning of 2014 and further, Bitcoin became a popular cryptocurrency throughout several regions. Soon followed some other cryptocurrencies like Ethereum, Litecoin, Tether, Ripple, etc. These cryptos too started trending in the digital space. With this as the background, several crypto enthusiasts keep predicting that the cryptocurrencies might beat FIAT someday.
However, economists hold a completely different opinion on this matter. The idea of crypto taking over the FIAT seems farfetched for mainstream economists.
So what could be the possibilities? What will be the impact of crypto beats FIAT? Let’s know more about it below!
Positive Impacts of the Crypto Domination
Usually, the FIAT currencies are issued by the government of particular countries and remain legal only in specific areas. However, cryptocurrencies are not limited by a single authority like Government. Any crypto can be used by anybody across the globe thus rendering no restrictions.
Since the cryptos are decentralized and remain unregulated largely, they cannot be manipulated easily like the FIAT currencies.
Cryptocurrency transactions can occur without the need for intermediaries. This will help reduce the transaction costs and help save your money. However, there is always some transaction fee associated with the FIAT currency.
There are several outlets that are accepting crypto from their users. One such example is online casinos. Some online casinos accepting crypto usually do not charge any extra fees to process your transactions.
Moreover, blockchain transactions are much safer compared to the FIAT ones due to the Push-Pull mechanism.
What Is Stopping the Crypto From Beating the FIAT?
While there are several positive sides of the cryptocurrencies, there are also issues that are stopping the crypto to take over the FIAT. Some of the issues include:
Lack of technical knowledge and working process of the cryptocurrencies among the individuals is making it less effective for usage. Moreover, Governments of several nations either refuse to acknowledge the crypto or ban them completely which makes it difficult for individuals with the knowledge to use it.
While the FIAT currencies can be volatile, cryptos carry far more uncertainty than FIAT. Also, with no authority to actually back the exact value of the crypto (like FIAT), the uncertainty lingers indefinitely.
Another concern which users fear is that the crypto transactions once made cannot be undone. Moreover, the anonymity of the parties involved also ensures that the transaction remains untraced. So, there are chances of fraud and theft occurring while using the crypto. However, with FIAT currencies, you can still trace the journey of the money to much extent.
As much as positivity looms around crypto, there is also an equal share of negativity around it. All in all, it is too early to predict if the cryptocurrencies will ever beat the FIAT. But there is sure certainty that both are to co-exist for some more time!
Featured image: Bitcoinist