Bitcoin Forum

Technology is rendering the fiat money system of the 20th Century obsolete, says Theis Simonsen, CEO of Tagion.

In an 8 October Ask Me Anything event on Telegram, Theis pointed out that while it will take time to show integrity and traction to onboard a critical number of users, change is inevitable.

Theis drove the foundation of Tagion because he sees that the FinTech revolutions of the early 21st Century, from electronic trading platforms to mobile banking to breaking down back-office silos, are now bringing about a qualitative leap. Moreover, open finance systems are now on the verge of being mature enough to replace the fiat system as solidified under the Bretton Woods agreement. For example, there is an increasing emphasis on cryptocurrency as a means of transaction and a continued build-out of financial products, which come as a result of the Bitcoin bull run of 2017–8, when the stability of crypto platforms and exchange rates were not in focus. However, proponents still need to take the long view.

There are practical implications to the shift in focus from ‘digital gold’, as Bitcoin is now called, to the use of other cryptocurrencies for payments. Theis maintained that two-thirds of banking is lending, but, “this requires a mature market infrastructure and an intrinsically stable, free-floating currency that is not bound to the “old” market structure.”

Theis says that bringing about a full-fledged open finance world requires us to patiently work toward this goal. Trust has to be established as well as the technical apparatus, and that simply takes time. Eventually, though he sees a world in which fiat is not completely replaced with open banking, but existing side-by-side with a multitude of digital means of exchange. Including the digital means of saving and investment that already exist, such as Bitcoin. And those who take the time to establish trust will be the ones to operate in the new environment.

Theis is the co-founder and CEO of Tagion. The company was founded in 2004 to provide an open finance platform for users world-wide to control, operate, and utilize as a substitute for the current fiat system.

SOURCE: https://forum.tagion.org/t/technology-is-rendering-the-fiat-money-system-of-the-20th-century-obsolete/236

Cryptocurrency isnot here to replace fiat or make it obsolete.  This is an exaggeration, a very unlikely future.
It is much more likely to be an alternative,  and a safe haven , a hedge against inflation and irresponsible governments.

Much more like a gold (safe haven ) or a payment method.


Other than that, there is a big bubble in the altcoi world, which will cause a lot of people to lose money

One of the principles of economic management regarding finance is saving and investment capabilities of currencies which you pointed out.

But, here is what we have to know about crypto; what happen to crypto when saved or invested?

1. To crypto: volatality will either erode the value or will increase it , bu the risk is very high.
2. To fiat: Inflation, which is relative, will make saving a poor option, it will make investment's real value to decrease except inflation rate is low.

I see that crypto will not replace fiat in the short run, unless it is stable than fiat for investment and savings.

We totally agree. We have no ambition of becoming one ring to rule them all ;)
However, it is our ambition to create an alternative that brings with it so many benefits, that it will make reaæ sense to use it. If we fail to do so, the project has no merit.

/tobias

No no no, crypto purpose isn't to make fiat an obsolete, majority of crypto coins aren't build to be digital payment solutions like XRP, they are build to become valuable assets like gold, diamonds and silvers and thanks to the volatility idea surrounding crypto it becomes very much possible, Fiat won't be obsolete because of crypto

I don’t think so. I wouldn’t say that technology is rendering fiat money useless, rather I would say that I easing the way we transact money. You can’t take away fiat, there are still people who needs to make use of paper money and the best you can do for them is to let them make use of it, and as for those who understands what the technology is all about, they should also be free to make use of other means that technology has created for us.

First it was just paper money, and from we had PayPal and other similar platforms that made things easy, next we had bank apps, and after that we have cryptocurrency, all these are here to create a better way of making transactions

Fiat will co exist with digital currency for a very very long time, it will be a matter of choice for those who wants to use any, there won't be any type of forcing to use digital currency or Fiat, it's going to be a free world, one won't stop the other from existing, obsolete ? I don't think so

I don't think so. Making the traditional monetary system looks obsolete maybe yes but to make it obsolete. Some people are hard to move on you know and some always have that perception of considering that the traditional monetary system which we already have for centuries is the most reliable thing ever.

I agree that crypto won't really replace fiat system, this is a wrong mindset in the beginning. And why would crypto do that though, there are still a lot of banks around that it simply hard to transact without them as much as we love crypto though. So it's better to change this kind of notion, crypto and fiat system can co exists without harming one another. And who will benefit from it? of course us which is a win win situation.

It's right time people start understanding that crypto will not make fiat money obsolete rather both will work together and compliment each other, however in my own opinion, crypto will be majorly used for most online transactions since it comes with low transaction fee and fast while that of fiat will be majorly used in most offline businesses, since most people will find it hard to adopt and deal with the volatile nature of crypto. Also, crypto being out of the reach of the government will likely make the government have reserved thoughts on adopting it, but however will most likely support it in such a way it won't affect their control authority on fiat.
Furthermore, it is important to know that, crypto has come to stay and will keep growing, but let's not have the thoughts of thinking fiat will be replaced or made obsolete by crypto.

Some people will still prefers Fiat over digital currency because they are used to Fiat, this isn't something we can decide for ourselves, it depends on the public, remember if  the public turn their back on bitcoin it will eventually kill bitcoin, crypto isn't powerful enough to erase centralized entity off crypto space, decentralized and centralized projects and organizations still exists till date but the purpose of crypto is decentralization so why centralized involvement?

Technology is a tool and Fiat system also can adopt it. People need to know that Fiat also has been digitalised and most of the advantage that people feel Crypto has can be eroded over night. Just look at the success of stablecoins in the space, people use Stable coins more than 90% of the crypto tokens in the space and I think this is why Bitcoin narrative changed to Store of Value because it can't beat Fiat as a medium of exchange.

It will be long time before we see huge percentage in crypto adoption. Fiat money will still dominate for many years and maybe even in our lifetime. Though the adoption of digital payments is increasing, yet, most of us are still dependent with fiat money.  I don't think fiat money system is going to obsolete very soon. We have a long journey to tackle before we see it as obsolete.

Despite the fact that Cryptocurrency is gaining dominance, fiat is still very important and useful as such it'll stay for sometime before becoming obsolete.