Some inspiration in the future of Bitcoin from the history of paper money

[RainbowKun]

we have become accustomed to something around us and never question its rationality, demonstrating the power of cognitive inertia. For instance, currency released by the government for payment and wealth storage. Before Bitcoin appeared, we seldom doubt the reasonability of currency. Bitcoin offered us a brand new solution, which is way better than the current one. In this way, we are inspired to think about whether the current system is appropriate.

In fact, everything has a life cycle, containing birth, growth, maturity, decay, and death. If we can look at the development of things from their life cycle, more enlightenment is available. It's just been 12 years since Bitcoin emerged, the earliest stage in life cycle, facilitating the boom of encrypted digital currency. Correspondingly, paper money is gradually fading. I believe in the next two decades, cryptocurrency issued by private company and legal electronic currency launched by the central bank will replace paper money. Perhaps, in the few decades to come, paper money will indeed disappear.

Paper money, that is, cash, is the currency we use most frequently in daily lives. So how did it come into being? Can its history inspire the current Bitcoin? About the former, the bank note from the Bank of England is crucial, whose 300 years' history can basically represent that of paper money.

In the second half of the 16th century, the word "banker" showed up in Britain, referring to merchants who were specialized in currency exchange. Then, the main currency were gold coins or silver coins, rather inconvenient for carrying and storing, especially for businessmen. Therefore, people would find a safe place for those coins, and the most suitable place was the goldsmith’ shop.

Businessmen put coins in these shops of London. The goldsmiths took care of the wealth and charged some fee and issued a paper receipt by which the depositor could exchange for gold or silver. This kind of receipt is actually a private contract with no legal effect. If one goldsmith enjoys a good reputation, then the receipt issued by his shop is easier to be accepted for circulation. In this way, receipts began to move around in the market. That is the rudiment of the earliest banknote.

A hundred years of development saw the progress of London's goldsmiths' shops: they gradually developed into a full-time financial service institution that absorbed deposits, granted loans, issued deposit notes and opened checking accounts, evolving into the earliest bank. However, as more and more gold and silver coins were saved in those shops, deposited funds were formed. Since not all coins needed to be exchanged, goldsmiths would keep a small part of them for exchange and a large portion for loan of high interest rate, creating lending business.

Huge profits lured goldsmiths to arrest more depositors for expansion, they decided to pay a certain amount of interest to the depositors. When deposits came, the goldsmith would set up a recipient, the earliest bank note. Similar to receipt, deposit note was used to exchange for gold and silver coins, the difference is that the note had interest whereas recipient had not. Slowly, a complete financial services got shaped.

Together with metal coins, bank notes soon earned a place in the market by virtue of its convenience in circulation, storage and exchange, rising to be a kind of quasi-money, the earliest paper in the United Kingdom.

In July 1694, to help the royal government raise war funds, the Bank of England was established. It publicly subscribed for 1.2 million pounds with 8% of interest rate and obtained the right of releasing bank notes of the same amount. The 1.2 million pounds was the entire capital of the Bank of England and the creditor's rights of the capital shareholders to the royal governor. In essence, the original notes of Bank of England were national debt issued by the royal government.

Although the debtor behind the Bank of England notes was the royal government at the time, it was not legal tender and the Bank of England did not enjoy the monopoly on the issuance of them. Then whether a bank note was accepted depended on people's trust level, it's not a mandatory legal requirement. As a guarantee, the notes were redeemed with royal government taxes, their acceptability was significantly better than others. Meanwhile, the Bank of England was approved by the Parliament and had certain public attributes, making it more popular among businessmen. Gradually, its notes became mainstream.

After the outbreak of WWI, the British government ordered the Bank of England to suspend the free exchange of paper money and gold. In 1928, its Parliament passed the Currency and Banknotes Act, legally confirming the Bank of England as the only currency issuing agency in the country. In more than 200 years, the Bank of England notes completed finished the unification of paper money. In 1931, Britain totally get rid of the gold standard and the notes of Bank of England became the successor---the legal credit paper money. Later are the Bretton Woods system since 1944 and the Jamaican currency system since 1973.

Hopefully, those words above will give you some inspiration. Here's my notion:

1. No monetary system is fixed. Human beings always tend to refine their system;
2. The evolution of any currency system can not accomplished overnight;
3. The issuance of banknotes needs value support. At the beginning, they are merely exchange certificates for gold and silver coins, and gradually they get circulated in the form of currency;
4. Our current pure credit currency system is unreasonable. Accumulating contradictions will surely renew it;
5. Bitcoin is the best value storage carrier. Bitcoin itself is valuable. Future currency will also be anchored by Bitcoin;
6. With the continuous strengthening of Bitcoin's global consensus, Bitcoin will surely become the super-sovereign currency and world currency that anchors the human currency and financial system.

They are my ideas got from the history of paper money. Search more about it if you're interested. I believe you will surely get more inspiration. To learn Bitcoin, the most basic history of currency is required. What do you think?

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[DapanasFruit]

The evolution of money and the establishment of central banking became the founding pillar of our modern monetary and financial system as we are seeing it being utilized on the global scale. As what we witnessed in 2008, there were and still are many huge problems with the system and coupled with the unchanging human nature of corruption and indignity, collapse of the system was then imminent if not for the rescue engineered by the government itself using the money of the people (presently living and those who are still to be born).

Then we have the entrance of Satoshi Nakamoto who brought to the world a new and game-changing innovation called Bitcoin using the blockchain technology as its foundation. At its core, this is going to be a disruptive model. Of course, those in the government assumed that this will never grow and flourish but alas what they feared is now coming true so that they are now noticing and issuing alarms. In the next few years, we are to witness a big battle between the people who are now trusting Bitcoin and those who are representing the old economic model. Which side will win is something exciting to watch.

[RainbowKun]

The evolution of money and the establishment of central banking became the founding pillar of our modern monetary and financial system as we are seeing it being utilized on the global scale. As what we witnessed in 2008, there were and still are many huge problems with the system and coupled with the unchanging human nature of corruption and indignity, collapse of the system was then imminent if not for the rescue engineered by the government itself using the money of the people (presently living and those who are still to be born).

Then we have the entrance of Satoshi Nakamoto who brought to the world a new and game-changing innovation called Bitcoin using the blockchain technology as its foundation. At its core, this is going to be a disruptive model. Of course, those in the government assumed that this will never grow and flourish but alas what they feared is now coming true so that they are now noticing and issuing alarms. In the next few years, we are to witness a big battle between the people who are now trusting Bitcoin and those who are representing the old economic model. Which side will win is something exciting to watch.

Yes, I firmly believe that this is a war between the new economic order and the old economic order, and these articles I wrote recently are all around this point. Bitcoin will surely evolve into the super-sovereign currency of human civilization in the future. It will anchor the economic order of human society.For example, the themes of my series of articles these days are all about the core point that Bitcoin will become a super-sovereign currency in the future. I explained my understanding of Bitcoin from six different aspects: the history of the gold standard, the history of the Bretton Woods system, the Keynes Plan, the Triffin dilemma, the history of paper money, and Hayek's book: Denationalization of Money. Some of this knowledge is related to economics, and some are historical allusions, but they all show that our current world currency system is unreasonable. Therefore, a worldwide economic crisis will definitely occur in the future, and the existing world monetary system will definitely collapse. When the existing world currency system collapses, the people will actively choose to establish a brand new world currency system. This new world order is built around Bitcoin. These are my predictions for the future based on past history and basic economics knowledge. This is the basic law and inevitable choice for the evolution of human society. I firmly believe that the future will become a reality, and maybe it will take 10, 20, or even 50 years.

[KevinRosa]

I think there is a missing link in the middle of this question, paper currency-accounting currency-Bitcoin (digital currency).

The emergence of bookkeeping currency in history is the re-establishment of the trust system. No matter what means the world economic entities use, they are actively acting as the voice of bookkeeping currency, especially the right to bookkeeping of world currencies, the Bretton Woods system, SWIFT settlement system and so on.

Although Bitcoin does not have legal and political attributes, it has completed the establishment of a trust system through code and smart contracts, and achieved the balance of economic interests through non-human factors.

Under the criticism that banknotes can be issued indefinitely, it is impossible for the economic crisis not to occur. The root of everything is that the dollar-centric world currency uses unequal means to plunder the resources of other countries.

The history of paper money actually gives us that the essence of currency is the carrier of value exchange, and unreasonable monetary rules will always be eliminated by history. Although Bitcoin now appears to be a utopian currency, in the future, international currency is not centralized, let alone a sovereign country. Bitcoin will become a good medicine for countries around the world to get rid of economic crises.

[Husires]

Unless a major event occurs such as a world war or others, it is difficult to get rid of paper currencies and therefore betting that it will end soon is not a good belief, as it is difficult to accept all bitcoins and all forms of decentralized cryptocurrencies.

Cryptocurrency prices are very volatile and still in their initial stages, but let's not think that either there will be fiat currencies or there will be no Bitcoin. The middle option is always good.

[NeuroticFish]

Before Bitcoin appeared, we seldom doubt the reasonability of currency.

As a matter of fact, wealthy entities did that, hence they kept their funds "locked" in gold, art, properties, ... name it.

Correspondingly, paper money is gradually fading. I believe in the next two decades, cryptocurrency issued by private company and legal electronic currency launched by the central bank will replace paper money. Perhaps, in the few decades to come, paper money will indeed disappear.

A way of "currency" that doesn't need electricity, internet and such may have to keep remaining in use in certain regions of the world for quite more years. I think that while the "few decades to come" can cover over 90% of the population, the remaining will need (exponential?) more time.

5. Bitcoin is the best value storage carrier. Bitcoin itself is valuable. Future currency will also be anchored by Bitcoin;

While this has indeed pretty good odds to happen, it may make it even more a "digital gold" than a "currency". I have mixed feelings whether this would be good or not.


And as a side note: while the post is informative for those who don't read much, it's also (too) long, hence those who don't read much may not read it all (and the informative part remains just wasted time for those who - more or less - know the history). An idea you should think on is to reduce your posts' length where possible.

[RainbowKun]

Before Bitcoin appeared, we seldom doubt the reasonability of currency.

As a matter of fact, wealthy entities did that, hence they kept their funds "locked" in gold, art, properties, ... name it.

Correspondingly, paper money is gradually fading. I believe in the next two decades, cryptocurrency issued by private company and legal electronic currency launched by the central bank will replace paper money. Perhaps, in the few decades to come, paper money will indeed disappear.

A way of "currency" that doesn't need electricity, internet and such may have to keep remaining in use in certain regions of the world for quite more years. I think that while the "few decades to come" can cover over 90% of the population, the remaining will need (exponential?) more time.

5. Bitcoin is the best value storage carrier. Bitcoin itself is valuable. Future currency will also be anchored by Bitcoin;

While this has indeed pretty good odds to happen, it may make it even more a "digital gold" than a "currency". I have mixed feelings whether this would be good or not.


And as a side note: while the post is informative for those who don't read much, it's also (too) long, hence those who don't read much may not read it all (and the informative part remains just wasted time for those who - more or less - know the history). An idea you should think on is to reduce your posts' length where possible.

Hi, NeuroticFish, thank you for your advice. These articles of mine are indeed very long, and it will be tiring to read them. Many friends also gave similar suggestions. I now try to shorten the content as much as possible in the writing process. But in many cases, it is really difficult to reduce. Many of these articles of mine belong to philosophical thinking. Not only do I have to give a conclusion, but I also have to write the process of reaching this conclusion. This causes a lot of text to appear verbose. They will certainly not be liked by most people. However, I think it is still necessary. They may be suitable for some friends who like to think deeply. With my writing level, I can easily write many short works that are popular with most people in the forum, and cater to most people's preferences. However, this is not what I want. I hope to organize my fragmented thinking into systematic knowledge. There is an opportunity to publish these articles into books in the future. As part of the evangelism for Bitcoin. I believe that in the next five to ten years, as the global consensus on Bitcoin continues to strengthen, more and more people will realize the value of my articles.

[leea-1334]

Before Bitcoin appeared, we seldom doubt the reasonability of currency.

As a matter of fact, wealthy entities did that, hence they kept their funds "locked" in gold, art, properties, ... name it.

Wealthy entities and even banks do that,,, exactly. Fiat, although a creation of banking states, was very weak in the structural foundation and although always known, it was publicly exposed globally in the last big bank crisis. Fiat cannot be sustainable and last two years, if you pay attention, banks are buying back all customers gold and even forcing them to give them up,,, at best returning "certs" which is like fiat backed with a promise of gold.

When they realize Bitcoin is a better way to lock up money, they will start buying big!

[leea-1334]

Yes, more and more groups are choosing to embrace Bitcoin and abandon fiat currency. This is determined by everyone's basic interests.

I do not know about abandoning fiat though,,, but them moving on to different fiat for sure. The thing about national currency is the whole idea of country/state and identity and all of those things that make 200+ countries feel like they are unique in this world.

That basic interest is stronger than just pure monetary power, collectively,,, this is why Zimbabwe and Venezuela have not abandoned their currencies despite it practically being useless:)

[NotFuzzyWarm]

The OP mentions the use of Bank notes in England during the 16th century. Um, the Chinese introduced the concept much much earlier during the 7th century. Ref the Wikipedia article on Fiat Money.

Time and time again in that article it mentions things such as

One justification for fiat money comes from a micro-founded model. In most economic models, agents are intrinsically happier when they have more money. In a model by Lagos and Wright, fiat money doesn't have an intrinsic worth but agents get more of the goods they want when they trade assuming fiat money is valuable. Fiat money's value is created internally by the community and, at equilibrium, makes otherwise infeasible trades possible.

Note that last sentence, "Fiat money's value is created internally by the community and, at equilibrium, makes otherwise infeasible trades possible". To me that sure sounds exactly the same as what gives crypto value.

So, that gives us:
"Original or real money" - a physical thing be it precious metals, beaver pelts, silk, a barrel of oil, etc. that can be traded for goods and services.
"Historical Fiat" - a physical thing such a paper script/receipt produced by a trustworthy source that can later be converted into real money.
"Modern Fiat" - a physical thing (paper money) that has assigned value but the value is not tied to or convertible to a physical thing but is instead assigned value based on world-wide consensus.
Lastly, what I would call Crypto Fiat - crypto currency that has value but said value is again not tied to a physical thing.

In other words, Bitcoin and all the other crypto coins technically ARE Fiat!

[palle11]

That basic interest is stronger than just pure monetary power, collectively,,, this is why Zimbabwe and Venezuela have not abandoned their currencies despite it practically being useless:)

These countries or other countries that have had their Fiat devalued to the extent it is looked as worthless would not abandon their currency because of the role that money plays in the system. If you Google that information about the role of money, you are likely to get these:
Unit of account, medium of exchange and store of value

That means the Zimbabwe currency or that of Venezuela has those functions still. Most importantly, they are used for exchange and whichever that will replace it has to play that role effectively and I don't think bitcoin or cryptocurrency has taken that spot yet in such less developed countries that are still considered high in the level of illiteracy.

I have to also add from my view that Fiat is a unifying model for the econony and identity , where government runs on digital currency at most, it still will not take the place of Fiat/paper money.

[Hydrogen]

Before bitcoin, there was Ron Paul proposing to audit the federal reserve. Fringe minorities proposing to re-implement a gold standard. Glass steagall versus the Volcker rule. Keynes vs Hayek. In my state there was actually a guy who owned reserves of gold and silver who tried to mint his own coins. There were malcontents of fiat currency before bitcoin. I wonder what happened to all of those people, it has been a long time since I've seen or heard any mention of them.

1. No monetary system is fixed. Human beings always tend to refine their system;

The system can be improved. Or it can regress and devolve over time as people forget past history. Knowledge and learning can be forgotten and lost. Technology and standards can fall. As was occurring in space and aerospace industries before space x came along.

Modern monetary systems are definitely regressing in ways. From a loss of a gold standard. To work increasingly being taxed to subsidize nonwork in an unsustainable loop.

[Tim-BTC]

After reading the article (very long), I have the following views:
1. The evolution of currency forms follows the steps of the highly complex operation of the human economy, especially the industrial economy and commodity trade. Specifically, from physical currency, to precious metals, to credit currency, every upgrade is the continuous advancement of human cognition result.

2. Electronic currency is actually a revolutionary change in currency clearing transactions and convenience. For example, if online transactions are developed and run well, they can completely get rid of the problem of slow development of the banking industry due to the lack of overseas clearing banks.

This is the weakness of the banking industry. It is still in the development stage of personal checks and credit accounts. Using online clearing and trading systems, cloud computing and big data analysis and processing can better grasp the economic trend, better control practical assets, and bring The cost of currency transactions has dropped significantly.

[leea-1334]

That basic interest is stronger than just pure monetary power, collectively,,, this is why Zimbabwe and Venezuela have not abandoned their currencies despite it practically being useless:)

These countries or other countries that have had their Fiat devalued to the extent it is looked as worthless would not abandon their currency because of the role that money plays in the system. If you Google that information about the role of money, you are likely to get these:
Unit of account, medium of exchange and store of value

That means the Zimbabwe currency or that of Venezuela has those functions still. Most importantly, they are used for exchange and whichever that will replace it has to play that role effectively and I don't think bitcoin or cryptocurrency has taken that spot yet in such less developed countries that are still considered high in the level of illiteracy.

I have to also add from my view that Fiat is a unifying model for the econony and identity , where government runs on digital currency at most, it still will not take the place of Fiat/paper money.

I did say it was about identity, which is to me the most important, you can Google all the information you want, but I met many zimbabweans students from our local universities who only bring out their currency to give as souvenirs to people (because it is printed in millions and billions) and laugh about it. They tell us that Zimbabweans only use US dollars. If they accept local currency they will ask for 10x 20x what the actual price is and nobody wants to carry a backpack of dollar bills to pay for coffee. They have those functions but only because the government says it does but on the streets everybody pays with US dollar.

I was not talking about them using Bitcoin to replace it, I was talking about most fiat currencies being held on to by states because of national identity not so much monetary power.

[RainbowKun]

Yes, more and more groups are choosing to embrace Bitcoin and abandon fiat currency. This is determined by everyone's basic interests.

I do not know about abandoning fiat though,,, but them moving on to different fiat for sure. The thing about national currency is the whole idea of country/state and identity and all of those things that make 200+ countries feel like they are unique in this world.

That basic interest is stronger than just pure monetary power, collectively,,, this is why Zimbabwe and Venezuela have not abandoned their currencies despite it practically being useless:)

The OP mentions the use of Bank notes in England during the 16th century. Um, the Chinese introduced the concept much much earlier during the 7th century. Ref the Wikipedia article on Fiat Money.

Time and time again in that article it mentions things such as

One justification for fiat money comes from a micro-founded model. In most economic models, agents are intrinsically happier when they have more money. In a model by Lagos and Wright, fiat money doesn't have an intrinsic worth but agents get more of the goods they want when they trade assuming fiat money is valuable. Fiat money's value is created internally by the community and, at equilibrium, makes otherwise infeasible trades possible.

Note that last sentence, "Fiat money's value is created internally by the community and, at equilibrium, makes otherwise infeasible trades possible". To me that sure sounds exactly the same as what gives crypto value.

So, that gives us:
"Original or real money" - a physical thing be it precious metals, beaver pelts, silk, a barrel of oil, etc. that can be traded for goods and services.
"Historical Fiat" - a physical thing such a paper script/receipt produced by a trustworthy source that can later be converted into real money.
"Modern Fiat" - a physical thing (paper money) that has assigned value but the value is not tied to or convertible to a physical thing but is instead assigned value based on world-wide consensus.
Lastly, what I would call Crypto Fiat - crypto currency that has value but said value is again not tied to a physical thing.

In other words, Bitcoin and all the other crypto coins technically ARE Fiat!

That basic interest is stronger than just pure monetary power, collectively,,, this is why Zimbabwe and Venezuela have not abandoned their currencies despite it practically being useless:)

These countries or other countries that have had their Fiat devalued to the extent it is looked as worthless would not abandon their currency because of the role that money plays in the system. If you Google that information about the role of money, you are likely to get these:
Unit of account, medium of exchange and store of value

That means the Zimbabwe currency or that of Venezuela has those functions still. Most importantly, they are used for exchange and whichever that will replace it has to play that role effectively and I don't think bitcoin or cryptocurrency has taken that spot yet in such less developed countries that are still considered high in the level of illiteracy.

I have to also add from my view that Fiat is a unifying model for the econony and identity , where government runs on digital currency at most, it still will not take the place of Fiat/paper money.

Before bitcoin, there was Ron Paul proposing to audit the federal reserve. Fringe minorities proposing to re-implement a gold standard. Glass steagall versus the Volcker rule. Keynes vs Hayek. In my state there was actually a guy who owned reserves of gold and silver who tried to mint his own coins. There were malcontents of fiat currency before bitcoin. I wonder what happened to all of those people, it has been a long time since I've seen or heard any mention of them.

1. No monetary system is fixed. Human beings always tend to refine their system;

The system can be improved. Or it can regress and devolve over time as people forget past history. Knowledge and learning can be forgotten and lost. Technology and standards can fall. As was occurring in space and aerospace industries before space x came along.

Modern monetary systems are definitely regressing in ways. From a loss of a gold standard. To work increasingly being taxed to subsidize nonwork in an unsustainable loop.

After reading the article (very long), I have the following views:
1. The evolution of currency forms follows the steps of the highly complex operation of the human economy, especially the industrial economy and commodity trade. Specifically, from physical currency, to precious metals, to credit currency, every upgrade is the continuous advancement of human cognition result.

2. Electronic currency is actually a revolutionary change in currency clearing transactions and convenience. For example, if online transactions are developed and run well, they can completely get rid of the problem of slow development of the banking industry due to the lack of overseas clearing banks.

This is the weakness of the banking industry. It is still in the development stage of personal checks and credit accounts. Using online clearing and trading systems, cloud computing and big data analysis and processing can better grasp the economic trend, better control practical assets, and bring The cost of currency transactions has dropped significantly.

That basic interest is stronger than just pure monetary power, collectively,,, this is why Zimbabwe and Venezuela have not abandoned their currencies despite it practically being useless:)

These countries or other countries that have had their Fiat devalued to the extent it is looked as worthless would not abandon their currency because of the role that money plays in the system. If you Google that information about the role of money, you are likely to get these:
Unit of account, medium of exchange and store of value

That means the Zimbabwe currency or that of Venezuela has those functions still. Most importantly, they are used for exchange and whichever that will replace it has to play that role effectively and I don't think bitcoin or cryptocurrency has taken that spot yet in such less developed countries that are still considered high in the level of illiteracy.

I have to also add from my view that Fiat is a unifying model for the econony and identity , where government runs on digital currency at most, it still will not take the place of Fiat/paper money.

I did say it was about identity, which is to me the most important, you can Google all the information you want, but I met many zimbabweans students from our local universities who only bring out their currency to give as souvenirs to people (because it is printed in millions and billions) and laugh about it. They tell us that Zimbabweans only use US dollars. If they accept local currency they will ask for 10x 20x what the actual price is and nobody wants to carry a backpack of dollar bills to pay for coffee. They have those functions but only because the government says it does but on the streets everybody pays with US dollar.

I was not talking about them using Bitcoin to replace it, I was talking about most fiat currencies being held on to by states because of national identity not so much monetary power.

Thank you for your wonderful responses. Everyone has posted very high-quality opinions. I am very happy to see these opinions. Because more and more people have begun to doubt whether the existing legal tender system is reasonable. The birth of Bitcoin liberated our minds and gave ordinary people another choice in the currency system. I always believe that the current monetary system in human society is unreasonable because it has no real value support and is really a piece of paper to some extent. However, human civilization will automatically evolve, slowly weeding out this unreasonable currency system and returning to the balance of fairness. This is the law of the development of the times, and no one can stop it. Bitcoin is our future, reconstructing the monetary system and economic order of the future world. Maybe this time will be long, but it will definitely come.

[RainbowKun]

I think this can only end if there is a world war because we all know that paper currency is very difficult for us to get rid of from life, because something we can say is that only money is not only to be used as a transaction tool but can also be used as a tool to buy an asset. and for the record there will be fiat currency or no bitcoin

Yes, there may be many black swan incidents in the future, which may lead to the re-establishment of world order. World war is only one possibility. The current global pandemic of the new crown epidemic is also a possibility. There is also the global economic crisis and financial crisis that may occur in the future. All these may lead to the collapse of the existing monetary system and the establishment of a new world monetary system. This is the future of Bitcoin.

[Kiley33]

Bitcoin may replace some legal tenders, but not all legal tender. In the long run, digital currency may replace paper money.
In the future, banknotes may still have the function of stocking, but they will be less frequently used during consumption and are more likely to become collectibles.
For example, gold and silver coins also have currency properties, but they are no longer used as currency, and are more for collection.
In the long run, digital currency is a trend. If the paper money disappears, there will still be some problems for the elderly. Because they may not be able to pay with their mobile phones in the future, it is convenient for them to use banknotes.
Moreover, Bitcoin is decentralized and its price fluctuates greatly, and it is currently impossible to achieve 1:1 anchoring.
I don't know if Bitcoin will anchor all currencies in the future, but the usage rate of banknotes will definitely decline in the future.