A frequently discussed question is whether a cryptocurrency will eventually usurp all of the major fiat currencies, such as the US Dollar or the Euro. This is a complex question. To provide a coherent answer we need first to describe and then move beyond the experience so far with cryptocurrencies.
Ever since Bitcoin was a boy, most cryptocurrencies have experienced volatile price movements. Such volatility makes it impossible for these currencies to provide a reliable metric of value. Currently, only a few cryptocurrencies are supported by a business model that is mature and has seen significant adoption. So at the time of writing few cryptocurrencies achieve their value from the strength of the underlying business model. As more of these cryptocurrencies mature there will be more cryptocurrencies with less volatile prices.
These cryptocurrencies may be better thought of as securities, like stocks or bonds. They are investment vehicles, designed for appreciation. As such, they can never be true currencies. They can be a store of value, but like stocks and bonds, they will not become be a metric of value.
All the main cryptocurrencies that are intended to be currencies: Bitcoin, Bitcoin Cash, Litecoin, Monero, Dash and Zcash, have been far too volatile to replace any fiat currency. We can blame immaturity (you just wait they’ll be great currencies one day) or poor design (don’t hold your breath they were doomed from the get-go). In truth, it is possible to design a stable-coin, simply by linking it to a fiat currency.
Stable cryptocurrencies are a far superior currency of account for reasons of:
– much lower cost
– much lower possibility of fraud
– far better divisibility
– almost bullet-proof governance.
Because of that, at some point in time, when cryptocurrencies become much easier to use, they are very likely to replace fiat currencies as the currency of account—possibly just a single cryptocurrency will do this globally, but maybe it will come down to different cryptocurrencies in different geographical areas. Much depends on how governments respond to cryptocurrencies and how they try to regulate them or compete with them.
In case you have any doubt. That’s what we’re about with Turtle Island Land Coin.