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.

[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.

[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.

[henmark]

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?

Unfortunately this is true, we are not careful about it, and we should be more careful about it as well. I know that this is not easy but we have to figure out a way to make sure we do not do this anymore. If we keep doing this then the results will not be easy and we are going to end up with bad results on the long term as well.

We should be looking at this like it is something that would benefit a lot, and for that reason if we only focus on making more profit, then we are not going to do fine. I get that it may not be easy to ignore the profit but, but even if we care about the profit we make, we should be also considering the fact that it is not just an asset but also a currency and we should invest accordingly and also use it if we can.

[Alpen]

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.

Spot on! Look no further than El Salvador. The country lacks its own national currency, so there was a plan to replace the US dollar with Bitcoin.

They distributed free BTC to citizens just to get them to open wallets, and legally mandated businesses and banks to accept crypto. And the result? No more than 8% of the population actually uses Bitcoin.

Interestingly, I see the exact same statistic with my own clients. I have been accepting various cryptocurrencies for my services through the Cryptomus gateway for a year now. I offer discounts, and the checkout process is streamlined to perfection. Yet, only about 8% choose to pay with crypto, while the rest stick to fiat.

[WatChe]

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.

This is also a reason why we need fiat in our daily living. We need a stable currency every month to pay utility bills, house rent, school fees etc. The volatility of Bitcoin and other cryptocurrencies is the reason why we have seen massive increase in price of these tokens in the past but this volatility can take price on downward direction also. For now, we can use fiat for day to day usage while some part of fiat can be invested in  crypto to get good return in the future.

[Iranus]

Spot on! Look no further than El Salvador. The country lacks its own national currency, so there was a plan to replace the US dollar with Bitcoin.

They distributed free BTC to citizens just to get them to open wallets, and legally mandated businesses and banks to accept crypto. And the result? No more than 8% of the population actually uses Bitcoin.

Interestingly, I see the exact same statistic with my own clients. I have been accepting various cryptocurrencies for my services through the Cryptomus gateway for a year now. I offer discounts, and the checkout process is streamlined to perfection. Yet, only about 8% choose to pay with crypto, while the rest stick to fiat.

In reality, we are the biggest obstacle preventing Bitcoin from becoming a widely used payment method. But many people refuse to acknowledge this and instead place all the blame on government.

El Salvador is the clearest example of this. Bitcoin has been recognized as legal tender since 2021, but as you mentioned, 92%-95% of the population does not use it. How can the government be blamed in this case?

For most people, bitcoin is simply an investment asset driven by the hope of getting rich.

[ultrloa]

Spot on! Look no further than El Salvador. The country lacks its own national currency, so there was a plan to replace the US dollar with Bitcoin.

They distributed free BTC to citizens just to get them to open wallets, and legally mandated businesses and banks to accept crypto. And the result? No more than 8% of the population actually uses Bitcoin.

Interestingly, I see the exact same statistic with my own clients. I have been accepting various cryptocurrencies for my services through the Cryptomus gateway for a year now. I offer discounts, and the checkout process is streamlined to perfection. Yet, only about 8% choose to pay with crypto, while the rest stick to fiat.

In reality, we are the biggest obstacle preventing Bitcoin from becoming a widely used payment method. But many people refuse to acknowledge this and instead place all the blame on government.

El Salvador is the clearest example of this. Bitcoin has been recognized as legal tender since 2021, but as you mentioned, 92%-95% of the population does not use it. How can the government be blamed in this case?

For most people, bitcoin is simply an investment asset driven by the hope of getting rich.

Maybe not us, but those still ignorant with new changes and still sticking on their comfort zones. If people are just open minded for growth and try to see the new technology maybe we won't see Bitcoin having slow adoption rate.

But somehow its normal and maybe people just need good proper knowledge also we can add up good education to know more about Bitcoin.

El Salvador is doing great, but we can't deny that their failure for implementing Bitcoin as a legal tender has been highlight on the news. That's why many governments still remain skeptical because they see those failure have more weights than other positive things happen on Bitcoin.

[Curious T]

Reading through the thread, I think a lot of people are missing something. When you say "economic system", you are talking about the system of the economy. You're talking capitalism, socialism, communism and other obsolete systems like feudalism and proprietism. I think a lot of people mistake it for the financial system. As of right now, I don't see how a cryptocurrency can change an economic system from capitalism to whatever the cryptocurrency introduces.

If you mean the financial system, then my answer is still no, it cannot replace the financial systems either. There are too many inconsistencies. There is a lot that is involved in the financial system as a whole, so cryptocurrency would only be a part of the system; it cannot replace it.

If you mean the fiat system. Then it's also no. Only a government with a failed economy and currency will allow a cryptocurrency like Bitcoin to become its major or only legal tender. Few countries may accept Bitcoin as legal tender, but it won't replace the traditional fiat currency of the country.

I've read a quarter of your whitepaper, and I'm not convinced it can replace anything. Nice concept, but that alone is not what is going to replace a financial, monetary or even fiat system.

[Abiky]

In reality, we are the biggest obstacle preventing Bitcoin from becoming a widely used payment method. But many people refuse to acknowledge this and instead place all the blame on government.

El Salvador is the clearest example of this. Bitcoin has been recognized as legal tender since 2021, but as you mentioned, 92%-95% of the population does not use it. How can the government be blamed in this case?

For most people, bitcoin is simply an investment asset driven by the hope of getting rich.

In El Salvador, the experiment failed because people weren't used to making digital payments in the region. The vast majority of the population is used to cash. But in the rest of the world, especially in developed regions, it's another story. Despite this, most people consider Bitcoin to be a store of value. NOT a digital currency for everyday payments. This way, Bitcoin will never replace the current economic system. Besides, governments won't allow this to happen. Because if BTC were to replace Fiat for good, governments will lose the ability to control the economy and our society as a whole.

The farthest Bitcoin can go is becoming an alternative financial system that would serve the unbanked and people living in authoritarian regimes. Just like it's the case right now. Anything more than that would be a pipe dream. Just my two sats.

[keseoma]

I don't think so.

In the crypto world, people are constantly preaching decentralization. Every time a traditional centralized company invests in crypto, it creates huge excitement across the market.

Yet when it comes to something like the SpaceX IPO, many of the same people who have spent years advocating decentralization—and hyping RWA (Real World Assets)—are suddenly looking for ways to get exposure to a highly centralized private company and its stock.

That's why I personally believe that decentralization is often the process, while centralization ends up being the outcome.

People talk about decentralization as an ideal, but capital tends to flow toward efficiency, influence, and concentration. In the end, money doesn't seem to care much about ideology.

[Baki202]

This is also a reason why we need fiat in our daily living. We need a stable currency every month to pay utility bills, house rent, school fees etc. The volatility of Bitcoin and other cryptocurrencies is the reason why we have seen massive increase in price of these tokens in the past but this volatility can take price on downward direction also. For now, we can use fiat for day to day usage while some part of fiat can be invested in  crypto to get good return in the future.

And because of the value that Bitcoin holds you won't wants to spend it also and spend a currency that is more stable is more reasonable and that is why we have to accept the fact that fait is only doing what they are known for which is for them to to be spent and that is why they are stable and crypto is mostly seen as an asset to me and instead of keeping my money in Banks I will rather invest them into Bitcoin that is how this things works and I would prefer to invest that to keep the money in the bank, all this is about understanding when you do then you will always know what to do.