There are a lot of conversations going on at the moment with the buzz surrounding cryptocurrencies, the main one of which being Bitcoin. So, with all of this hype, the mad rush both in and out of the crypto marketplace, will Bitcoin replace FIAT currency?
The interesting thing is that we are so conditioned to measuring the value of things, including Bitcoin, in FIAT that the discussion surrounding the actual value is one that I believe is largely based on a combination of habit and confidence.
What basis do I have for this statement? Human beings are creatures of habit and we take the path of least resistance by nature. Change is not low resistance, it requires effort, and makes a lot of people uncomfortable. Think back to the days when your grandparents measured distances and lengths in feet, yards, and miles, and weights in ounces and pounds.
The transition from the Imperial System to the Metric System is something that is still happening today. I was born in Australia in 1975, almost a decade after decimalization was introduced in 1966, and I find myself still using the Imperial System more frequently than not. And I’m not alone in this matter. A creature of habit by osmosis it would seem; now that’s another discussion on values and belief systems altogether!
Until we are able to disconnect the FIAT value applied to cryptocurrencies and measure the value of items we are transacting to exchange in the new form, be it either whole Bitcoins, or fractions of them as Satoshis, we will still be bound to the FIAT system. We may be less exposed to transacting within it, but the implied value is what matters here.
So, what is a dollar worth anyway? Seeing the meteoric rise of Bitcoin value against the USD in late 2017 and the first week of January 2018, and then its correction back down over the following weeks to a low that was reflective of the early November 2017 value, are we ready for Bitcoin as a new economic platform?
When will Bitcoin replace FIAT currency?
I would argue that we are not ready just yet, people are more often than not seeking to gain value in their FIAT position through leveraging their Bitcoin (or other cryptocurrencies) position, treating the cryptocurrency as a commodity to store value, rather than use as a means of exchange to replace FIAT currency.
That’s not to say that we are not in the transition stages. As an adopter of cryptocurrency, I have found myself measuring other cryptocurrencies such as Dash, Z-Coin, NEM, and NEO in satoshis. However, there is still the underlying values system geared to FIAT that plays a part in my decision-making processes.
This is also evident in the language used by crypto-commentators across a number of platforms such as SoundCloud, YouTube, and other sites. I have yet to come across someone who talks about the value of a cryptocurrency in exclusively crypto-value based terms without a connection to FIAT.
The transition to exclusively using cryptocurrencies I believe is a roadmap of 30 years or more, unless there is an event that answers our question ‘Will Bitcoin replace FIAT Currency?’ in the near future.