Cryptocurrencies will Replace Conventional Money?
- Thread starter Alchemist
- Start date
I was just wondering how many users here know about cryptocurrencies like bitcoin and what is your opinion about them?
1) CryptoCurr. takes away the power of Govt. Control over money matters and it's the single biggest roadblock for anything meaningful to happen with this. Govt. with its current form all around the world will never allow this to become the main mode of currency.
My guess is, we are still away at least 10-15 years from seeing this as main mode of currency. The change which is coming, will not only disrupt the financial systems but it will change the governance and society at large too.
It will be like an alternate parallel economy ( just like today's black money) used by people who know how to use it/ exploit it to avoid government interference. Even today very few people are comfortable to use online banking/credit/debit cards and other alternate modes for money transactions. So I doubt bitcoins will replace conventional money.
My guess is, we are still away at least 10-15 years from seeing this as main mode of currency. The change which is coming, will not only disrupt the financial systems but it will change the governance and society at large too.
As Victor Hugo said...
We resist the invasion of the armies; We cannot resist the invasion of ideas.
Even today very few people are comfortable to use online banking/credit/debit cards and other alternate modes for money transactions. So I doubt bitcoins will replace conventional money.
I feel currently the problem with cryptocurrencies is that these are neither easy to understand nor easy to use.
If someone can come out with a cryptocurrency that is easy to use, it will become popular in no time.
A cryptocurrency backed by a national government is a possibility too and could be a huge success worldwide.
It's the case in India. Otherwise in the west and many places in Asia, cards are preferred over cash.
There are lots of incentives to use cards - Sign up promotion gifts and various types of rewards to choose from such as cashback, miles or Reward points.
A disciplined person (who doesn't roll-over credit) can use credit cards to his/her advantage and derive benefits out of it actually.
I wonder for how long the government can stop virtual currencies!
As Victor Hugo said...
Bitcoin may or may not survive in the long term, but blockchain technology has arrived in a big way. Cryptocurrencies will piggyback on the increasing use of blockchain technology.
As Victor Hugo said...
Bitcoin may or may not survive in the long term, but blockchain technology has arrived in a big way. Cryptocurrencies will piggyback on the increasing use of blockchain technology.
Current form of government => Not profit making institution, survives on inflation and tax.
Future form of government => Profit making institution, with a monopoly by force. (My wild guess)
A cryptocurrency backed by a national government is a possibility too and could be a huge success worldwide.
A single government backing cryptocurrency will create a huge disadvantage for the others, and other countries will be forced to do so but why on the first place any government will back it?
We have seen that small countries have benefited a lot by lowering their tax rates.
On face having near-zero tax rates makes little sense for a government, but tax havens are done themself a lot of good by lowering taxes.
In the same manner, small countries can benefit a lot by backing or launching their own crypto currencies. They may lose some control over their monetary policy by backing a crypto currency, but they will get back a lot more from increase in value of that currency.
The country can either corner a big chunk of the currency before making the announcement or pre-mine a new currency and then launch it.
For example, GDP of Cyprus is around $19 billion. The market capitalization of bitcoin is around $17 billion. Both are of comparable scale.
A government that decides to back a crypto currency can create enormous wealth for itself.
We have seen that small countries have benefited a lot by lowering their tax rates.
On face having near-zero tax rates makes little sense for a government, but tax havens are done themself a lot of good by lowering taxes.
In the same manner, small countries can benefit a lot by backing or launching their own crypto currencies. They may lose some control over their monetary policy by backing a crypto currency, but they will get back a lot more from increase in value of that currency.
The country can either corner a big chunk of the currency before making the announcement or pre-mine a new currency and then launch it.
For example, GDP of Cyprus is around $19 billion. The market capitalization of bitcoin is around $17 billion. Both are of comparable scale.
We have seen that small countries have benefited a lot by lowering their tax rates.
On face having near-zero tax rates makes little sense for a government, but tax havens are done themself a lot of good by lowering taxes.
In the same manner, small countries can benefit a lot by backing or launching their own crypto currencies. They may lose some control over their monetary policy by backing a crypto currency, but they will get back a lot more from increase in value of that currency.
The country can either corner a big chunk of the currency before making the announcement or pre-mine a new currency and then launch it.
For example, GDP of Cyprus is around $19 billion. The market capitalization of bitcoin is around $17 billion. Both are of comparable scale.
Our government earns the money majorly through Taxes and currencies issued (inflation since RBI doesn't pay any interest over any cash we hold in paper). Let us assume that government ask the industries to pay taxes on their transaction, the auditing of accounts will be impossible since there won't be any trackable bank account. How do you see the government will run?
Incase, government runs its own crypto and then makes it illegal to use any other but their, in that case, there is no meaning of creating their crypto which is not anonymous. Already the currency are in electronic forms. What benefit Crypto will bring in this case?
The moment crypto currencies look even remotely like becoming mainstream, almost every government in the world will start making it illegal to posses or buy or sell cryptocurrencies. One of the biggest power the government has over it's citizen's is the power to mint fiat currency. Anything that weakens that power is a no-no.
The technology behind cryptocurrency namely Blockchain could possibly be adopted by mainstream finance world.
It's the case in India. Otherwise in the west and many places in Asia, cards are preferred over cash.
A cryptocurrency backed by a national government is a possibility too and could be a huge success worldwide.
Why will a cryptocurrency become a success worldwide just because it's backed by some govt?
The world has excess liquidity but the liquidity has nowhere to go. If the currencies are legally recognized, a lot of money will flow into them.
Starting April 1st 2017, Japan has recognized digital currencies.
New legislation authorizing digital currency as a legal payment method has come into force in Japan.
Big investors/traders/speculators in countries where crypto-currencies are banned, now have an option to put their money in these currencies via Japanese firms.