Invented in 2008 by Satoshi Nakamoto, whose origins are still shrouded in mystery, Bitcoin was first released as open-source software. As a decentralized digital currency, it does not come under the regulatory control of any Central Bank, Government, or fiscal agency. Traditionally, even though crypto has been highly volatile in its price range, it has been trading in a very tight band of late. According to the experts, this is a sign of Bitcoin attaining a certain degree of maturity.
For the past decade and more, Bitcoin has been the undisputed leader in the crypto world and, till early 2019, accounted for the major share of market capitalization. But slowly and surely, other cryptocurrencies are shortening the gap. Bitcoin price reaches an all-time high, and the future of Bitcoin seems bright as the value of Bitcoin is growing day by day. Now, Buying Bitcoin has also become easy; it is not that complicated. Several investors are now planning to trade in Bitcoin as the value is still growing. If you are also planning to trade in Bitcoin, the Bitcoin Code platform is an automated trading platform in the crypto market & uses AI and smart trading robots. To know more about it, you can check Bitcoin Code Review.
Ethereum, Ripple, and a few more are catching up fast and becoming a popular mode of transactions that affect daily lives. Bitcoin, though, is still in the lead, but pundits are beginning to ask the question of whether Bitcoin could ever become real money and whether, in the not-too-distant future, cryptocurrencies will entirely replace fiat currency.
Will Bitcoin become real money?
Even though the answer might be in the speculation domain, there is a certain amount of truth in it. Yes, Bitcoin is on its way to being used as real money. The focus here is on the word “real.” If it works, it is real and will be used.
A few examples will clear the air about this controversy better. Think of the value generated by often-used items that are not money but does all their functions. You give your creditor an IOU against a business deal, and that is a promise of payment. Similarly, a gift card is not money, but you can deposit it in your bank account and watch the balance grow. In this case, there is no money. Gold is not a legal tender for transactions but has a lot of intrinsic value, not less than standard currency.
The point then is what is it that puts the word real before money. It is something that is accepted widely by the community as a mode of quick and easy transactions. When a government tells its citizens that this is money, everybody uses it. The print and the denominations are all pre-decided. As long as you need a medium in your wallet to buy groceries, pay taxes, and go on a vacation, that is real money for you.
Given these parameters of usage that define real money, it can be said with certainty that Bitcoin is already in the sphere. It can be used for a range of necessities now, not far behind the conventional perspective of “real money.”
Could Bitcoin replace cash?
Whether Bitcoin or, for that matter, any crypto would replace cash depends on the possible outcomes of such a scenario. Here are two sides of the picture.
An advantage of a crypto-based economy is that it cannot be manipulated like fiat currency. This is because crypto is decentralized and unregulated and exists as a node on the Blockchain. It would also support government funding for various schemes better, such as poverty alleviation programs, because of crypto’s widespread nature. Distributing universal basic income through cryptos has already been adopted in many countries. Further, cryptos do not need intermediaries in transactions. Funds transfer across the world is fast and free, as banks and other financial institutions are bypassed.
On the other hand, there are certain concerns too if Bitcoin were to replace cash. The huge infrastructure that props up economies would have to be replaced with a new one that accepts and easily adopts cryptocurrencies. The costs to do so would be massive, and there would be many difficulties to surmount. If cash ever became incompatible with a setup that has been around for centuries, the loss too on people holding conventional assets in fiat currency would be enormous. Regular financial institutions would have to change their basic working systems.
Most critically, governments would lose their control over the economies they govern as cryptos’ decentralized nature would make their fiscal role redundant. But central control is necessary for passing and controlling legislation without which there would be financial chaos all around.
Hence, regardless of what the benefits of switching completely to crypto from cash might be for investors, it is unlikely to happen in the future.
Things we can buy with Bitcoin
Think of Bitcoin as a regular currency, and you will have an idea of what you can buy with the crypto. From paying your taxes to vacation bookings, from Netflix subscription to ordering pizzas, there is very little outside the purview of a Bitcoin purchase. With crypto, the sky’s the limit for you.
Will Bitcoin ever become real money? While the crypto usage is pulling up beside fiat currency, replacing it as a sole medium of transactions is unlikely given the huge upheaval in infrastructure required for such a transition.