Can a Crpytocurrency replace current economic systems?

[justdimin]

At same time, I don't think people would like to adopt decentralized cryptocurrencies as replacement for fiat currencies, because nobody wants to rely on volatile currencies in daily routine. The risks are too high, and people would live in a constant atmosphere of tension and anxiety due to the possibility of having all their funds losing 50% of its price overnight. As we know, it's something possible to happen in this market.

When it comes to currency or payment methods used in everyday life, what people care about is stability, convenience, low fees, and fast transaction processing. They really do not need a decentralized and highly volatile currency.

Therefore, I even think that even if the government legalized bitcoin as an alternative. Not many people will use bitcoin to replace fiat in their daily lives.

That is the thing, bitcoin has always been harder to "use" than fiat, and that is why there is no way that it can get adopted for usage that quickly. Online world got it first because in online world we do credit card information anyways, so it is not as easy as paying on the spot with a "beep" sound, you type everything in, at that point bitcoin can be used too, but even there, the waiting times are different, cards are instant, bitcoin takes time.

So if bitcoin ever needs to be something we use for daily spending, it needs to get faster and I mean much faster and also very cheap. Cards do take commissions, you pay for it, but at the same time, it's very tiny, so if you want bitcoin to be the same thing, you need to spend very little, like 10-20 cents at most, and be instant.

[wmiran]

Interesting idea. Replacing parts of the economic system is a much bigger challenge than building a token or blockchain, so starting with a clear problem and a small testable model is probably the best approach. Before thinking about adoption, I'd focus on proving that the incentives and economics work in practice. That's where most ambitious projects succeed or fail.

[kawetsriyanto]

Replacing parts of the economic system is a much bigger challenge than building a token or blockchain, so starting with a clear problem and a small testable model is probably the best approach.

Of course, it is a complex challenge which means the challenge involves many aspects. It isn't only about financial aspect, it is including varied aspects.
What clear problem you mean? The problem seems quite clear, it is about the current economic system that still has some weaknesses. Meanwhile testable model you stated above, can you give an example? 

Before thinking about adoption, I'd focus on proving that the incentives and economics work in practice. That's where most ambitious projects succeed or fail.

Well, before we think about it, we must understand it first (whether it is possible to apply or not). If it seems impossible, the idea is only in the theory. So far, I still don't see a chance that most countries will consider that they will use crypto to solve economic problems.

[Abiky]

When it comes to currency or payment methods used in everyday life, what people care about is stability, convenience, low fees, and fast transaction processing. They really do not need a decentralized and highly volatile currency.

Therefore, I even think that even if the government legalized bitcoin as an alternative. Not many people will use bitcoin to replace fiat in their daily lives.

It's not that people don't need a decentralized currency, but rather, they don't care about decentralization. Why? Because they're comfortable living their old lives. I've heard many people saying they have nothing to hide. Others just want convenience. The only ones who truly believe of a decentralized and censorship-resistance world with Bitcoin at the helm, are none other than libertarians, cypherpunks, academics, and geeks. The majority is on Fiat's side. They're only buying and "hodling" Bitcoin because of the profits they can make with it. Not because they're true believers.

Because of such mindset, crypto will never replace Fiat. Besides, governments won't allow it. They're the main obstacles preventing crypto from reaching its true potential. As long as governments and banks are relevant, crypto will remain an alternative to the existing economic system. At least, it's better something than nothing.

[Iranus]

It's not that people don't need a decentralized currency, but rather, they don't care about decentralization. Why? Because they're comfortable living their old lives. I've heard many people saying they have nothing to hide. Others just want convenience. The only ones who truly believe of a decentralized and censorship-resistance world with Bitcoin at the helm, are none other than libertarians, cypherpunks, academics, and geeks. The majority is on Fiat's side. They're only buying and "hodling" Bitcoin because of the profits they can make with it. Not because they're true believers.

Because of such mindset, crypto will never replace Fiat. Besides, governments won't allow it. They're the main obstacles preventing crypto from reaching its true potential. As long as governments and banks are relevant, crypto will remain an alternative to the existing economic system. At least, it's better something than nothing.

You may be right. People do not really care about decentralization as much as they claim. Instead, profit is what most participants are truly care about from beginning to end.

I have said this before too: we ourselves are one of the barrier to crypto becoming a mainstream payment method or competitor to fiat, not just government.

Most people are only interested in speculation and profit. How can it become a means of payment when nobody wants to spend it?

[Silikiem]

It's not that people don't need a decentralized currency, but rather, they don't care about decentralization. Why? Because they're comfortable living their old lives. I've heard many people saying they have nothing to hide. Others just want convenience. The only ones who truly believe of a decentralized and censorship-resistance world with Bitcoin at the helm, are none other than libertarians, cypherpunks, academics, and geeks. The majority is on Fiat's side. They're only buying and "hodling" Bitcoin because of the profits they can make with it. Not because they're true believers.

Because of such mindset, crypto will never replace Fiat. Besides, governments won't allow it. They're the main obstacles preventing crypto from reaching its true potential. As long as governments and banks are relevant, crypto will remain an alternative to the existing economic system. At least, it's better something than nothing.

You may be right. People do not really care about decentralization as much as they claim. Instead, profit is what most participants are truly care about from beginning to end.

I have said this before too: we ourselves are one of the barrier to crypto becoming a mainstream payment method or competitor to fiat, not just government.

Most people are only interested in speculation and profit. How can it become a means of payment when nobody wants to spend it?

This competition is not healthy for the both as I think that bitcoin wasn’t really introduced to compete with local fiat in view of taking over its functions and eradicating it totally. Even though they both can serve one major function which is as a means of exchange and transactions considering the fact that most countries have adopted bitcoin as a legal tender still doesn’t mean they have made away with their local currency. Bitcoin still needs fiat to operate because the most common way to getting bitcoin is to buy with the local fiat.

[taddus33333]

While crypto has potential, replacing entire economic systems is extremely complex. Current systems have centuries of institutional knowledge, legal frameworks, and social contracts built in.

Crypto's strength lies in specific use cases: borderless transactions, censorship resistance, and programmable money. But replacing central banking, fiscal policy, and regulatory functions would require solutions we haven't fully envisioned yet.

The most promising path may be crypto gradually expanding into areas where traditional systems are weak or inefficient, rather than wholesale replacement. Interoperability between crypto and fiat will likely be more practical than replacement.

Interesting read: https://github.com/ConsenSys/cp-consulting

[WillyAp]

Just look at what happened in San Salvador.
Good intentions with little information for the public, the advisors thought the 30 bucks are enough to create a BTC savvy San Salvadorian.   
It would have been better to use litecoin as the most updated software.  I think @coblee was even present.

[kawetsriyanto]

While crypto has potential, replacing entire economic systems is extremely complex. Current systems have centuries of institutional knowledge, legal frameworks, and social contracts built in.

Exactly. It will be too difficult to replace the current economic system because it has very complex parts. Yep, it even has the legal frameworks that it won't be easy to change instantly. Moreover, the infrastructure must be adjusted as well. This is still very difficult to happen if we consider the current condition.

The most promising path may be crypto gradually expanding into areas where traditional systems are weak or inefficient, rather than wholesale replacement. Interoperability between crypto and fiat will likely be more practical than replacement.

Even if crypto is started to expand its role in the system, it is unlikely to replace the traditional system. The most possible thing is the crypto will be the complement of the traditional system. Crypto can be an alternative option that the traditional transaction has the weakness in that field. So, the idea to replace the current system with crypto seems quite difficult to happen.