Paying with cash has had its day. Coins and notes are dying out, bitcoins and co. are emerging as successors. Will cryptocurrencies become the new standard?
The good old days: This is what trade looked like in the 18th century. Source: qiio.de
Fiat money - let there be cryptos
Bitcoins versus cash - who's David and who's Goliath? Source: huffpost.com
I believe, so I pay in cash
More appearance than reality? The European Central Bank in Frankfurt. Source: zdf.de
Viva la revolución!
Is becoming more and more likely: Paying with cryptos will replace cash. Source: Bitcoin PR Buzz
The end is near
If one system is better than another, it will inevitably die out. And that's a good thing. It has never happened that an underperforming system has lasted long - unless it is the least of all evils. It's no coincidence that DVDs won out over VHS, Google over Yahoo or Facebook over MySpace. Bitcoins and Ethereum will replace cash as a means of payment for the same reasons.
When you pick up your TV at the digitec shop and are asked whether you want to pay with Bitcoins, Ethereum or Tether, you'll think of me.
Header image: Why paying with Bitcoins and Co. will soon become the standard is obvious. Source: busy.org
When I'm not stuffing my face with sweets, you'll catch me running around in the gym hall. I’m a passionate floorball player and coach. On rainy days, I tinker with my homebuilt PCs, robots or other gadgets. Music is always my trusted companion. I also enjoy tackling hilly terrain on my road bike and criss-crossing the country on my cross-country skis.
The development of society towards a completely cashless system is almost complete. Whether in a restaurant, at the Migros checkout or in a shopping centre: Hardly anyone pays in cash these days. Twint, Apple Pay or contactless payment with a debit or credit card is easier. Many people no longer have a wallet, just a smartphone and a small Card Wallet.
Cryptocurrencies, on the other hand, are on the rise and are experiencing a second spring. Because money - in whatever form - is not interested in what you think. It is a primitive means of receiving something in return. Nobody cares whether you pay with paper notes or digital coins. Coins and notes only exist because some frightened purists are desperately trying to hold on to them. What they know but don't want to admit: Cash will soon be extinct.
Cash did not yet exist when human trade emerged as one of the first economic activities. Back then, traders paid with commodity money, i.e. goods such as food or precious metals. Strictly speaking, they did not pay, but bartered. There were no coins or notes, yet everything worked smoothly. The economy flourished. By the way: even today, the payment process is still a simple exchange - whether with cash or electronically.
So what is the difference between cash and cryptos? What makes cash - wrongly - so much better in the eyes of many? Ignorant financial experts label Bitcoins and co. as a doomed speculative bubble because the crypto market has all the usual characteristics, such as overvalued assets. However, the problem with the previous crashes was not the cryptocurrencies per se, but the overvalued ICOs (Initial Coin Offerings) and the associated (overly) high hopes of the initiators. Cryptos were new, on everyone's lips and ready for big things - yet they were overestimated at the beginning. But: Bitcoins and co. survived the crashes, investors learnt their lessons and developed the system further.
Because cash is also just a simple means of exchange, it will die out as soon as a more efficient option is found and established. The time is now ripe for something new, more efficient and more modern. For this reason, hardly anyone pays in cash anymore, but by card. The value of money is not tied to a commodity - its price is independent and its value depends on how much we value it or how much it is dictated to us. So who is to say that fiat money is not also a bubble?
If we no longer believed in the value of cash today, what would it be worth tomorrow? Without its long history, its inherent traditions and the reassuring words of central banks, what is there left to say in favour of the existence of cash? If cryptocurrencies are a bubble because of their fast-moving nature or volatility, then so are shares, bonds and every other kind of money - they are artificially created means of exchange whose value we believe in, which is determined by the state and which we hope will remain as stable as possible for as long as possible.
Why do we trust governments when it comes to the value and type of money, but less and less when it comes to political decisions concerning laws and taxes? How can we distrust their promises and work towards a better future, but not question the monetary value they place on it? For all these reasons, cryptocurrencies are the future. Not because a few millennials got rich with it and are holding on to it. But because cryptos are the new operating system for a decentralised democratic world due to their indisputable advantages.
Would you like an example? Thanks to bitcoins and the like, many Venezuelans are circumventing the inflation that prevails in their own country. Cryptocurrencies: An alternative with huge future potential. There is no longer any need to trust a government to determine how much money is worth. In the event of an intervention in the event of a financial crisis, the population no longer has to accept austerity measures, while the actual culprits get off lightly. After all, the (financial) future of a state no longer depends on the whims of the government, but on the lenders themselves.
Yes, it may be that cryptos are overvalued. Yes, they can also be manipulated. Yes, crypto mining also consumes a lot of energy. And no, they are not always the easiest solution, especially when it comes to high-frequency trading. And yet: what remains is the all-important question of price. What is it worth to you to have the certainty that anyone and everyone who has their money in one of the immutable crypto accounts has a say in how the whole thing develops? The unilateral decision-making on pricing by the government is replaced by shared consensus in the cryptocurrency model.
If you don't understand the principle of fiat money, don't judge whether cryptos will eventually replace cash. The same applies to how crypto mining works - if you don't understand it, it's not your place to label it a bubble. Because: complete transparency, seamless records and crowd-funding make cryptocurrencies a more than serious threat to the raison d'être of cash. This is not a prediction, but a fact.
