Crypto vs. Fiat Currency — Will the World Ever Treat Them the Same?

We live in a world that never stops changing. Almost every day, there is something new in a certain field of life, trying to get our attention and gain our trust.

When the change is useful and easy to comprehend, we have no problem accepting and gladly rush into finding out more about it. However, when we need to make a change regarding something important like, for example, money, we will highly likely think twice.

A perfect example of this is the crypto vs fiat war, which is still going on across the world. While new generations think of cryptocurrencies as the future, those a bit older still can’t part ways with their beloved fiat currencies.

We have done some digging and found some predictions regarding both of these currency types. To find out what people think of them, stay on this page and keep reading.

Cryptocurrency — Money of the Future

When the first cryptocurrency appeared several years ago, people considered it the greatest invention in recent years. While the news about it spread fast, some had no idea it even existed.

Timothy Lane, the Bank of Canada’s Deputy Governor, thinks that cryptocurrencies should become the money of the future. However, since that hasn’t happened yet, it is highly unlikely it will happen in the future.

The reasons that made him think this way are multiple. Lane mentioned that although cryptocurrencies created a boom when they appeared, the ecstasy didn’t last long. As a governor of a bank, it was his job to closely monitor the development of cryptocurrencies and see whether or not they could be beneficial for Canadians.

After some time, Lane noticed that making transactions in cryptocurrencies like bitcoin or libra is very expensive. Also, by following the changes regarding cryptocurrencies, Lane noticed that their purchasing power is not so stable and cannot be easily predicted.

The governor concluded that fiat currencies are still the primary ones and that the world doesn’t intend to completely switch to cryptocurrencies any time soon.

Why Don’t People Give up on Fiat Currencies?

Canadian governor Lane gave us a professional opinion regarding the future of cryptocurrencies. But even without him, we can notice that cryptocurrencies are still not as present in our daily lives as we expected them to be. This is due to some quite logical reasons.

Old Habits Die Hard

As we’ve mentioned at the beginning of this text, people tend to reject new things if they are not sure how they can benefit them. In this case, we will take, for example, the older generation — our grandparents, maybe even parents.

They have built their lives (and our lives, too) using fiat currencies. This has been their truth for years, and they learned how to work with it. Imagine that after so much time, you need to grasp terms like blockchain and cryptocurrency. It would take a lot of time only to explain these terms to them, let alone give them valid proof that it’s something better than money.

Fiat Currencies Still Dominate the Market

Yes, there has been a lot of talk about cryptocurrencies and people who got rich by mining them. However, people tend to go for standard options rather than experimental ones. When you enter a supermarket, the price of all the goods is still written in fiat currencies. When you go for a haircut, they ask you for fiat money in exchange for their service.

Even if cryptocurrencies are a better choice for the future, we must admit that fiat currencies are still dominant on the market. This further prevents cryptocurrencies from becoming more used and accepted by the general public.

Limited Number of Coins

The first time someone explained the point of cryptocurrencies and blockchain, most people were thrilled to hear more about it. But when they found out that there is a limited number of coins, the excitement parished fast.

When common people hear the word limited, they mostly interpret it as not enough. Therefore, they decide to stick to fiat currencies they are familiar with since they know that these currencies are not limited in the same way as, for example, bitcoin.

Crypto vs. Fiat — Final Verdict

At the moment, fiat currencies are winning the war. The main reason might be that people are afraid to let go of what they are familiar with. Another one may be related to bankers’ opinion that cryptocurrencies did not live up to our expectations. Whatever the case, one thing is certain — until cryptos become a must, fiat currencies will remain the number one payment method.

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Torsten Hartmann
Torsten Hartmann

Torsten Hartmann has been an editor in the CaptainAltcoin team since August 2017. He holds a degree in politics and economics. He gained professional experience as a PR for a local political party before moving to journalism. Since 2017, he has pivoted his career towards blockchain technology, with principal interest in applications of blockchain technology in politics, business and society.

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