Crypto is experiencing a renaissance right now, and no one-not even the harshest critics-can deny it. The global crypto market cap is already an insane $1.82 TRILLION according to CoinMarketCap, and it looks to be still growing despite prices crashing to almost half during the past few months.
But while these digital currencies might be worth a ton of money, they're being used in a massively different way compared to normal currencies. In layman's terms, people don't even use them to pay for things and mostly treat them like stocks-buying them up and selling them by using the Binance bot at a future profit when the time is right.
As such, this begs the question: will crypto replace cash or any other typical currency? The answer isn't as straightforward as you think.
Increasing Adoption Is No Indication Of A Takeover
An article by The Washington Post showed just how much the adoption rate of cryptocurrencies have grown in recent times. As of late, the United States has almost 30,000 Bitcoin ATMs in operation, which is an insane growth from just 1,800 machines four years ago.
Even the biggest names in business, pop culture, and everything else are buying into the hype as well. Remember the Los Angeles Lakers' famous home, the Staples Center? Well, it's no longer Staples Center anymore, but rather the Crypto.com Arena by virtue of a $700 million naming deal. This is just one of many other things that point to the growing mainstream acceptance of crypto as a whole.
But even if the ubiquity of these digital currencies have increased, people are still not using them to pay for things. As previously mentioned, they're getting bought and traded as speculative investments (again, much like stocks). Financial tech analyst Dan Dolev says that this is definitive proof of crypto not replacing cash ever.
According to him, cryptocurrencies are so insignificant mainly because of the reasons why people buy and trade them. Most folks only buy them thinking of how their values may potentially go up, how they consider it "the future of money," or how they might not even know why they're buying because they're just in it for the hype and clout.
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Even Crypto's Creators Don't Even Know Whether It Will Replace Real-World Money
Here's one thing to dampen the spirits of "crypto is the new dollar" proponents: even the creators of Bitcoin, the first cryptocurrency, don't even think it would replace the dollar-or any other traditional currency for that matter.
According to Forbes, it's all about the volatility of crypto values as a whole. One day they'll be worth $50,000, the next day they could drop to half the price. And this will go on and on and on, because these assets are still considered speculative. They only get their immense value because so many people agree that they have that kind of value.
This, as per Forbes contributor John Tamny, almost makes the dollar (a currency at the mercy of things like inflation), "appear rigid by comparison." He also argues that cryptocurrencies like Bitcoin "magnifies the dollar's worst qualities many times over." But this is just the opinion of one man, who goes against those of many. And it is impossible to predict the future at this stage.
A Global Crypto Takeover Will Require IMMENSE Effort For The World To Adapt
Perhaps in the future, cryptocurrencies will finally be used for their creators' original intent: to pay for things. But before that happens, the world will need to make extremely massive, sweeping adjustments that will not be easy to pull off.
Investopedia argues that for the world to fully accept crypto as legal tender, it will mean that all traditional currencies will just die off without any means of recovering. Furthermore, new global infrastructure will have to be built to accommodate digital currencies at a wider space, and billions of people will actually be losing money if they have most of it in cash.
It will not be an easy transition. But whether it is indeed the future of money, only time will tell.
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Written by RJ Pierce
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