Can Bitcoin ever replace fiat currency?

A fair number of crypto enthusiasts believe that Bitcoin will wipe out the traditional currency as the most prominent way of money exchange. On the contrary, there still are people who believe that digital money does not satisfy the criteria for being a medium of exchange that it, therefore, lacks the capacity to replace fiat money.

Tim Draper, a renowned venture capitalist and Founder of Draper Associates, is one of those who believe that bitcoin is ready for a giant take-over. In fact, according to his prediction by the year 2022, Bitcoin will hit $250,000 and enjoy a significant market cap.

The normal, or as we can address it, fiat money has seen many changes in the past two decades. But no change has been as powerful as the idea of digital money wiping out the fiat type. Infact, the introduction of bitcoin was one powerful episode in 2009, that sprouted the idea of Bitcoin replacing fiat currency.

It is very hard to believe that fiat currency can be the next medium of payment exchange, but the day might be closer than we think.

As mentioned earlier, Tim Draper is one such person who supports the view of Bitcoin being the future of money. Infact recently, he doubled down on his bullish call of $250,000 per coin in the next four years and predicted that fiat currency will disappear much faster than expected.

The gene seems to run in the family as Adam Draper, son of Tim also believes that Bitcoin has a very bright chance of a great future.

Most investors agree that as time goes on we will see that Bitcoin will hold an ever-increasing share from traditional fiat currency. Here is an interesting stat for you:

According to Frank Holmes of U.S. Global Investors, today, in the United States, fiat in circulation stands at $1.59 trillion and according to the Chicago Feds, that figure could sink to as low as $501 billion within 10 years as Bitcoin, and cryptocurrencies in general, become more widely used to make transactions.

Different results for different countries

This is obvious that different countries have different perspectives regarding the adoption of Bitcoin. The United States has shown interest in adopting Bitcoin while certain countries like China still think that Bitcoin is not a good idea. However, of course, there are strong chances of crypto replacing fiat.

There are crypto lovers who are eagerly waiting for the time when fiat currency is totally replaced by crypto. But certainly, there are governments involved who see many challenges in this scenario.

If we consider the scenario of traditional money being wiped out, currencies will lose value quickly without any means of recovery. There would inevitably be difficulties with this transition, as established governments would likely have to scramble to change their ways to keep up.

As cryptocurrencies would operate with much less government overview, governments would lose control over central currencies and could no longer, for example, determine how much of a currency to print in response to external and internal pressures. Die-hard Bitcoin enthusiasts see this as a positive, but the general public might suffer a certain level of anxiety over this scenario. After all, not everybody will be ready or willing, to be in full control of their own finances.

What are your views about Bitcoin being a global currency payment method? Let us know in the comments section.

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