Okay, so this article is based on my reply and what I think about if cryptocurrency replaces USD Dollars in the future. Someone on my previous article post commented and asked cryptocurrency can replace US dollars!? So let’s find out and discuss it.
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It will become the world’s reserve currency.
A disclaimer: I am neither a financial consultant nor an investment counsellor. I’m just a regular person with an opinion. So, incorporate whatever I say with a grain of salt into what you already know or have researched. Nothing I express here should be construed as financial or investment advice.
So allow me to clarify. To begin, a definition of money:
Money serves as a medium of exchange. Each unit must be: • portable – (usually) easy to transport or access
• Longevity – it preserves its original form, feels, and function throughout time.
• Divisible – It can be divided into many smaller pieces, each of which has a fraction of the value of the original piece; and Fungible – It may be freely traded, and each division (smaller piece) of the original has the same value to everyone.
This is not the same as money. Consider this concept in terms of MONEY, such as gold, silver, and platinum… Most people believe things have inherent worth throughout time, regardless of the value of any paper money (currency) that may be equated to it.
Bitcoin (BTC) falls under the Money category rather than the Currency category. It is the first money that fits all of the conditions I outlined above. In the Portability section, even “valuable metals” are absent. That is why the United States established Fort Knox to house vast amounts of gold. That’s another tale, but the short version is that prominent countries were allotted rooms. Gold was moved from room to room as we exchanged to track who held what percentage of the gold in each room.
BTC will become a store of value since it fully fulfils the concept of money (as long as you have a smartphone or computer). Therefore, you should keep it in this account when you are afraid that your currency may lose value.
Here’s a quick example:
Assume that I am a college student in the early 1970s. A gallon of petrol would cost me 12.9 cents (US). Now I’m lucky to be able to find it for $2.90 per gallon. It’s the same $1, but its purchasing power has decreased over the previous 50 years. In the other direction, gas is now 2248.06 percent more costly.
This is a standard definition of inflation. TODAY is always the most valuable day for your cash. The exact denomination of money will purchase less next week, next year, and 50 years from now – that is a guarantee.
So we may now discuss a “Value Store.” Gold prices ranged from $35 to $65 per ounce in the early 1970s.
If you repurchased gold then, that same ounce is now worth roughly $1400. That’s a 2800% gain (at $50/oz). As a result, when the same dollar was converted into gold, it maintained pace with inflation. Consider this: if you filled your automobile in 1972, then bought the same amount in gold and held it till today, you could turn that gold in, fill your car now, and have a little leftover.
That is what a Store of Value accomplishes for you.
What does this mean for BTC? First, anyone under the age of 40 is unlikely to “believe” in gold or other “physical” goods as a store of value. Instead, they are rapidly transitioning to a digital economy. For them, BTC is becoming a store of value.
Nations are considering issuing BTC-based bonds, and major exchanges such as CBT and NYSE and crypto-friendly exchanges are becoming more popular. Individuals take their salaries and “save” them in BTC wallets, then use that wallet to pay bills, eat, and live. Some people have a “bank” account that allows them to move money from their source of income to their Bitcoin wallet.
So here’s what I think on Cryptocurrency Replaces USD:
- Bitcoin will become the world’s reserve currency during the next 5–10 years.
- Employers will “pay” their employees in BTC – This is already happening, but it will be the “preferred” option for new businesses and everyone under the age of 35.
- There will be severe financial upheavals as a result of this. Countries will not employ this approach if you are old enough to recall 2008 and “too big to fail.” “Too Big to Save” will now be the tagline.
- Currencies (fiat money such as the US Dollar) will suffer greatly. We owe more than $20 trillion in debt. As other countries begin to fall, they will look to us to bail them out or pay them back more fairly. Unfortunately, we don’t have that type of money. Therefore this won’t happen.
- One of the first signs that this is starting to happen is the 10-year bond yield falling below zero percent. They did this just a few weeks ago. So, if you invest $100 in a ten-year US Savings Bond and bring it in for payment, you will receive $90 back. That doesn’t seem promising.
- Those searching for a store of value will look to BTC.
Okay, I’ll stop ranting now.
The quick answer, in my opinion, is that Bitcoin will become the world’s reserve currency, and every national currency will be assessed against it.
As a result, a country’s currency will be valued in BTC based on how effectively it uses its limited resources and if it lives within its budget. (And deficit spending will be heavily punished since they cannot create the GDP needed to pay their obligations.) For more interesting facts and answers, don’t forget to leave your curious question in the comment section on cryptocurrencysimple.com. Till then, have a great day!