According to the Swiss Bank for International Settlements, December 2, bitcoin became the sixth largest exchange in the world by circulation after the Japanese yen, the Chinese yuan, the Euro, the dollar and the Indian rupee. Live bitcoin cache also made the list, taking 17th and 20th places respectively. According to analysts of the Bank to overtake the rupee and to take fifth place, bitcoin should reach $15,000. With such rapid growth in the popularity of cryptocurrencies experts believe that in the next few years they will completely replace cash.
In the next five years cryptocurrencies will replace Fiat
Venture capitalist Tim Draper in November predicted that over the next five years Fiat currency will lose its relevance. In 2014, Draper invested $20 million in the purchase of 30,000 bitcoins, which at current rate of $11,370 for bitcoin it investment equates to $341 million In a recent interview with the American Forbes Draper said:
"Five years from now, if you try to pay in cash, will laugh at you. Bitcoin and other cryptocurrencies are so popular that the reasons to use Fiat currencies simply won't".
Similar opinion and Evan Sleep, co-founder at Sohn Conference Foundation, who in a recent interview with CNBC said:
"How far in the future where restaurants will begin to only take online payments? Just imagine: in the restaurant you are told that in order to pay it off, you will need to download their app and pay through it, because make will only be clearing. I think it will happen very soon."
This trend is noted in the report, the World Payments Report 2017, according to which the global volume of noncash payments grew by 11.2% between 2014 and 2015, to reach $433.1 billion of This increase is associated with emergence of new payment systems, the introduction of blockchain technology, and development of the Internet of things. The report also projected an increase in the number of digital payments at 10.9% by 2020.
The reasons for the fall of the value of Fiat money
More the reason why cryptocurrencies will replace Fiat currency, described senior Deutsche Bank strategist Jim Reid. According to experts, the current financial system is extremely unstable because it is based on the American dollar, which is not secured after the decision of President Nixon in 1971 to abolish the "gold standard".
Moreover, as noted by the Russian edition of the News.The economy, the final failure in the 70's from the gold exchange standard at a global level has contributed to budget deficits, huge credit, global growth and imbalances and destabilize markets. However, the effects of inflation have largely been masked on the major economic markets rapid growth of China's economy in the 70s and the explosive increase in the population of working age.
According to Reid, a surplus of labor resources has enabled to keep wages at a desirable level for them, and subsequently provided to the external Central banks control inflation. Such a method outside control meant that politicians and Central banks had in their Arsenal of tools like leverage and free use of the printing press to stimulate the economy, which they use to this day.
As Reid notes, in the case of uncontrollable high inflation, continuous printing of money will lead to a complete devaluation of the Fiat currency and its Hibari as a result. But, according to experts, in the case of the global financial crisis cryptocurrency will be able to mitigate the impact and be the only alternative to Fiat currency. Reid is confident that this will happen because cryptocurrencies are decentralized, are not under the control of States and are regulated by a natural balance of supply and demand:
"Although the current speculative interest in cryptocurrency and more due to the interest in blockchain technology than the loss of faith in cash, in the near future will have found a stable formula for the exchange, and then cryptocurrencies will become a real competitor of paper money that will be the end of Fiat money" — summed up the RAID.
The fact that the cash unsecured, said the founder and CEO of Overstock Patrick Byrne, who is a longtime supporter of the cryptocurrency. Discussing the future of cryptocurrency with Fox Business, he said:
"Do you think it is a bubble? What about the Fiat currency that now is in your wallet? This currency is called the dollar provided only excess power of the tax authorities of the United States. I think it's time to move on to real money — gold or bitcoin".
According to Byrne, the real question is not how fast bitcoin is growing, and how much the falling value of Fiat money, which ultimately will be zero due to the irresponsible operation of printing machines.
Even skeptics recognize the potential of the cryptocurrency market and its impact on the global economy. So, in November, the head of Goldman Sachs, Lloyd Blankfein said that do not feel full confidence in bitcoin, but can't deny that he will be the next step in the evolution of money.
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