Will cryptocurrency replace physical cash?

Step Chain
4 min readNov 16, 2020

Now that the concept of cryptocurrency is becoming more and more known among people, many are starting to wonder about the future of money. Will cryptocurrency take over or will cash prove to be immortal? The Deutsche Bank has predicted that by 2030 cryptocurrency has the potential of replacing cash entirely. So will cryptocurrency really replace physical cash? Let’s find out in this article.

According to blockchain experts, the Deutsche Bank is right; soon cryptocurrency will be the only currency. They believe that the new type of money has the potential in replacing cash in the upcoming 10 years. In order to better understand this issue, let’s try to make a comparison between fiat currency and cryptocurrency based on different criteria:

  • Durability

Paper notes’ durability is quite limited. They are prone to be torn and worn out over time, and even with the efforts of replacing them with polymer banknotes, no many improvements have been made. On the other hand, cryptocurrencies are digital, which makes them not prone to being torn. However, the data of crypto is stored on a decentralized network meaning that it can be lost. Even with this downside, crypto money is considered more durable than cash.

  • Fungible (the ability to substitute it for something else of similar value)

Being fungible means replaceable by a value of the same kind. The currency should be interchangeable and the same. US dollars are all the same and of identical value, the same goes for cryptocurrencies as they hold all the same value.

  • Trade

The purpose of currencies is to allow trade and exchange of goods and services. This is done easily using cash, however, it is slowed down when it comes to cryptocurrencies. This is due to the long process of verifying transactions.

  • Divisibility

Divisibility, like its name implies, is the ability to divide the currency into smaller units. One US dollar is made of cents, the same goes for cryptocurrencies. Bitcoin for example is made of satoshis.

The advantage of Crypto: inability to manipulate it

Unlike fiat currency, crypto cannot be manipulated because the decentralized world in which it operates is not regulated. Paper money on the other hand is regulated by central banks. On the other hand, the concept of universal basic income is better supported by cryptocurrencies, as fiat currencies aren’t able to support it successfully.

Disadvantages of crypto replacing cash

When talking about crypto overtaking traditional money, we mean that traditional currencies will lose their value shortly after. In fact. Crypto operates differently than cash, and this means a world of the only crypto requires new infrastructure to adapt to the new way of operating. It is predicted that if the transition was to happen, it will happen very quickly, and cash will become useless faster than people would think, which will lead to many losses.

Having a financial world led by cryptocurrencies means more stability, as their value will not be affected by political and governmental reasons in the country. What is your opinion about the future of money?

Sources:

https://www.fxstreet.com/cryptocurrencies/news/the-future-is-cashless-could-cryptocurrencies-replace-cash-as-we-know-it-202004161242

--

--

Step Chain

StepChain is a responsible Fitness App for fitness and blockchain adoption by rewarding its users with STEP Tokens they generate while exercising.