Bitcoin Replaces the Dollar: Could it Happen?
Bitcoin’s value is continuing to grow as governments show less ability to guarantee the safety of citizens’ money. BTC is the U.S. dollar’s growing rival accordingly.
A Growing Need for Bitcoin
As we’re all aware, bitcoin bears no physical presence the way fiat currency does, and banks aren’t necessary for its trading and storing.
This helps in lowering institutional costs and preventing the public from overpaying to keep their money safe and sound. Pakistan has learned this lesson, and some feel bitcoin could eventually take the reins as the country’s national currency.
Additionally, the military takeover in Zimbabwe has ultimately increased the desire and need for bitcoin in the country, causing it to reach prices exceeding $10,000 USD there.
In a country that lacks a steady government and prominent leadership, a non-government issued currency is becoming the go-to solution that citizens are salivating over. The Zimbabwean economy is continuing to lose its footing, and now several nationally-accredited businesses, including car dealerships, are accepting bitcoin as a primary form of payment in the sub-Saharan nation.
How Big Could Bitcoin Become?
All this leads to another question: here in America, could bitcoin ever overtake the dollar as the official currency of the U.S.?
While the U.S. has always remained financially stable by comparison, the question certainly poses some interesting prospects, and in looking at the evidence, one realizes that the dollar isn’t necessarily invulnerable. According to an article in Edelman Financial, bitcoin, unlike the dollar, earns its value through the voice of the people. Whatever people decide bitcoin is worth, that’s where it will be.
If they decide $8,000 is the right spot for bitcoin, they’ll save a seat for it in the high-risers.
The main difference between bitcoin and USD is that the values are set not by a government, but by its users. Governments decide that a $1 printed bill is simply worth $1. They cannot determine the value of an unregulated currency like bitcoin.
Thus, the voice of the public serves a grander purpose.
Interestingly, this aforementioned article (printed some time ago) labels bitcoin as “unstable,” and while it leaves many questions open to individual interpretation, there appears to be doubt that bitcoin could ever replace something as official as USD, but with bitcoin’s recent price rise, there’s reason to finally begin dismissing this doubt once and for all.
An opposing attitude is argued in a more recent article, published just last month by the Institute for New Economic Thinking.
The author talks about the overall scarcity of bitcoins, and that this scarcity is likely to remain in place for some time, thus causing the value of bitcoin to grow in immeasurable ways.
“No such confidence can be attached to state-issued money,” the piece states. “Quite the contrary; states are seen as reliable abusers of money issued for their own purposes. Cryptocurrency is digital gold, while fiat currency is just paper, subject to over-issue and hence, depreciation.”
In other words, bitcoin has the potential to expand and reach epic proportions, while fiat currency has seemingly hit a plateau, and doesn’t hold as much promise.
The thoughts expressed here suggest that eventually, all people will realize the strength and power bitcoin and digital currency truly hold, and they’ll all want to switch over. Once that happens, fiat will collapse heavily (maybe even permanently), and cryptocurrency, either bitcoin or one of its many cousins, will take fiat’s place.
How and When?
It’s hard to determine exactly when something like this will or could occur, but the signs are all moving in this direction.
As political strife continues to batter the globe in all directions, people are exhibiting less trust for those put in charge, and looking for ways to rule over their own lives and financial well-being.
Bitcoin presents some valid options; the desire for crypto-holdings has grown exponentially, and the price continues to travel north.
Eventually, the power of bitcoin may reach a point even the most believing of believers never fathomed, and a national currency existing in the form of 0s and 1s instead of paper will reach full fruition.
Do you believe bitcoin could overtake the dollar as the top-ranking currency? Post your comments below!
Images via Bitsonline, Brookings.edu