Between 2020 and 2022, the usage of cryptocurrencies increased on a global scale. However, the rates of using crypto have significantly decreased since then, and the market seems to be experiencing a drastic downfall. Will crypto’s popularity burn out in the years to come or is there still a chance it could replace fiat currency, as speculated since the first time Bitcoin entered the scene? That’s what this article aims to explore.
Crypto’s Rise to Fame
Bitcoin—possibly the most famous cryptocurrency in the world—came out in 2009. From the very beginning, it was touted as the future of currency with its supporters acting like it was only a matter of time before it replaced regular money. Fast forward 15 years later, and we are all still using traditional money, with cryptocurrency being reserved for the most fervent futurists.
However, that doesn’t downplay the success crypto has had worldwide. It’s an accepted payment method in many parts of the world, so you can convert crypto holdings to fiat currency at checkout, get paid in crypto, or send it to another person.
The immense potential of Bitcoin and other cryptocurrencies is best seen in the gambling industry. The first Bitcoin casino was launched in 2012, and it didn’t take long before more of them joined the scene, creating a range of websites on which players could combine their two passions—gambling and mining. Today, playing in top Bitcoin casinos provides players with complete safety, an extensive number of games, and an unmatched experience.
The Benefits of Crypto vs Fiat Currency
Crypto still hasn’t overtaken fiat currency, but that doesn’t take away from the fact that digital currency has its advantages.
For starters, digital currency—Bitcoin, in particular—is immune to hyperinflation. Once there are 21 million Bitcoins in circulation, no more will ever be produced, so massive production won’t devalue it.
Secondly, cryptocurrency proponents claim that greater anonymity is the reason why digital currency should be the money of the future. People who put a high value on privacy should think about investing in crypto as these currencies are decentralized and exist outside of the control of governments or central authorities.
Ultimately, cryptocurrency is a credible and legitimate asset as it is taxed as a business income or capital gains. That lends it credibility and legitimacy, which puts it in the running for replacing traditional currency.
Some Drawbacks of Crypto
The main reason why crypto hasn’t substituted fiat currency is its penchant for volatility. A stable currency is a sign of a healthy economy, and Bitcoin changed its value by 2.22% in December 2020 alone. Likewise, cryptocurrency doesn’t contribute to the growth of a country’s economy, so it doesn’t count toward GDP.
Another barrier to making crypto a mainstream currency is the high price that comes with transactions. Between April 19 and 20, Bitcoin miners earned an astonishing $89.8 in transaction fees, with the amount for an average fee being $91.89.
To put it into perspective and help you understand why crypto isn’t likely to replace fiat currency anytime soon, let’s go back to the aforementioned gambling industry. If you were to play your favorite games in the best online casinos using Bitcoin, you’d be spending a lot more money on transaction fees than you would with PayPal or your credit card. Thus, instead of paying for more spins on a slot machine, you’d be left covering transaction fees. Anonymous transactions are a privilege, but they don’t come without a cost.
Finally, executing a cryptocurrency transfer into a fiat currency can be a logistical nightmare for most people who don’t have a degree in computer science. Even those who master the process aren’t out of the woods, as crypto exchanges are highly vulnerable to hacking. Until they are harder to steal, cryptocurrencies don’t have the potential to replace paper money.
Will Crypto’s Popularity Burn Out in The Future?
It’s not very likely that crypto’s popularity will completely fizzle out in the years to come. Digital currency might not have the potential to replace paper money in the foreseeable future, but it will remain a gladly used method of payment, and even a hobby, for some. Crypto can be a good investment, as long as you buy the right ones.
