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‘Why Cryptocurrency Will Never Attain the Status of Real Money’

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Huge Shout Out to Squarespace for Sponsoring This Video: Understanding Cryptocurrency and Its Potential Impact on Government-Backed Fiat Currency

Introduction

Cryptocurrency has been a hot topic in recent years, with many claiming that it will one day replace government-backed fiat currency. However, the core argument for why cryptocurrency matters has never made much sense to me. In this article, we will explore the concept of cryptocurrency, its relationship with fiat currency, and its potential impact on the financial world.

What is Cryptocurrency?

Cryptocurrency is a decentralized digital currency that is not regulated or validated through a governing body or bank. Unlike traditional fiat currency, which is backed by a government, cryptocurrency derives its value from the people themselves. It is created through complex computations and exists solely in the digital realm.

The Argument for Cryptocurrency

One of the main arguments for cryptocurrency is that it is not based on a fictitious number, like fiat currency. Supporters claim that fiat currency is backed by nothing and is only given value because the government says so. In contrast, cryptocurrency is seen as having more validity because its value is derived from the people and their trust in the system.

The Value of Fiat Currency

While it is true that fiat currency is not backed by gold or any tangible asset, it does have a correlation to real-world value. Take the US dollar, for example. Although it is no longer tied to a specific amount of gold, it still represents a fractional representation of the total US GDP. The value of fiat currency is derived from the goods and services provided within a country, giving it inherent value within the context of the economy.

The Value of Cryptocurrency

On the other hand, cryptocurrency’s value is derived from nothing more than the computations used to create it. It lacks a tangible basis and is not tied to any real-world work or assets. While some argue that cryptocurrency derives its value from the people who use it, the reality is that its value is highly speculative and subject to market manipulation.

The Stability Issue

One of the main challenges facing cryptocurrency is its lack of stability. For it to be widely accepted as a means of transaction, it would need to stabilize in value. However, this is unlikely to happen unless it is already stable. Businesses are unlikely to accept a speculative coin that can fluctuate in value dramatically. This creates a catch-22 situation where stability is needed for widespread adoption, but widespread adoption is needed for stability.

Market Manipulation

Another issue with cryptocurrency is its susceptibility to market manipulation. While some argue that its decentralized nature makes it less susceptible to manipulation than government-backed fiat currency, the reality is that it can be even more easily manipulated. Without regulations in place, entities can exert significant control over the market, leading to price manipulation and volatility.

The Elon Musk Example

The recent actions of Elon Musk, the CEO of Tesla, provide a prime example of market manipulation in the cryptocurrency world. Musk’s tweets about accepting bitcoin for Tesla and his endorsement of dogecoin caused significant price fluctuations in these cryptocurrencies. Musk’s ability to influence the market highlights the lack of regulation and the potential for abuse in the cryptocurrency space.

The Role of Government Collapse

Some proponents of cryptocurrency argue that it would be ideal in the event of a government collapse or apocalyptic scenario. However, in such situations, it is unlikely that the internet and electricity services would still be running reliably. Additionally, a fully digital currency with no real-world backing could pose significant challenges in a society facing hyperinflation or other economic crises.

Conclusion

While cryptocurrency has made many people wealthy and has its place in certain contexts, the idea that it will replace government-backed fiat currency seems far-fetched. The speculative nature of cryptocurrency, its lack of stability, and the potential for market manipulation make it an unreliable and risky alternative to traditional currency.

Frequently Asked Questions (FAQs)

1. Is cryptocurrency a real form of currency?

Cryptocurrency is a digital form of currency that exists solely in the digital realm. While it can be used for certain transactions, its value is highly speculative and subject to market volatility.

2. Can cryptocurrency replace government-backed fiat currency?

The idea that cryptocurrency will replace government-backed fiat currency is unlikely. The stability, widespread adoption, and regulatory framework required for such a transition are currently lacking in the cryptocurrency space.

3. Is cryptocurrency more secure than traditional currency?

Cryptocurrency transactions are often touted as being more secure due to the use of blockchain technology. However, the lack of regulation and the potential for market manipulation make cryptocurrency transactions inherently risky.

4. Can cryptocurrency be used for everyday transactions?

While some businesses accept cryptocurrency as a form of payment, its lack of stability and widespread adoption make it impractical for everyday transactions. Most businesses prefer to accept government-backed fiat currency due to its stability and wide acceptance.

5. What is the future of cryptocurrency?

The future of cryptocurrency remains uncertain. While it has gained popularity and made significant strides in recent years, its long-term viability as a replacement for traditional currency is still questionable. Only time will tell how the cryptocurrency landscape will evolve.

In conclusion, while cryptocurrency has its merits and has made some individuals wealthy, the idea that it will replace government-backed fiat currency is unlikely. The speculative nature, lack of stability, and potential for market manipulation make cryptocurrency a risky and unreliable alternative to traditional currency.

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30 Comments

  5. Money has always been fake and backed by the government saying so. That's why it works, it's a debt tracking system that gives a solid consistent way to pay for things and track who owes what. The federal government pretty much just increases and decreases the amount of money in the system for the purposes of directing labor towards certain goals and controlling inflation. Such a thing does not exist with crypto it's a fatal flaw for an actually being used for currency reasons, No one's there to enforce value, taxes, or debts in crypto.

  6. Its fun watching younger people be so certain of the future while I wait to see what kind of horse upsets their apple cart. I uaed to wonder how cultures could keep making the same mistakes until I realized its a lack of grasping fundamental concepts. Once I got that, all the hyper around various trend became more transparent. Stick to principals. Its unlikely you're gonna be the .00001% of people who strike it rich on a trend line. Of course you could always ask SBF what he thinks.

  9. You work for 40yrs to have $1m in your retirement, meanwhile some people are putting just $10k in a crypto market for just few months and now they are millionaires , all thanks to Mrs Jane, God bless you madam 😇

  11. This is one of my favorite channel. It always makes my week complete! 😊 Despite the economic downturn, I still manage to earn $35,000 weekly from my investment of $3,500 God bless Expert Joyce Albert.

  12. Great video, trading come with a lot of benefits And I have just bought my first house through it. As a beginner I was scared of loosing my savings but I’m glad I took the bold step that is now favoring me.

  14. This is the thing, people that say that "Cash and goverment money is fake and unreliable" I have a question, you are telling me that, if I were to get $500 and move to the United State, I wouldn't be able to buy food? If you tell me "No" then pelase check again, if you say "Yes" then please, explain to me again, how is money/cash worthless and useless.

  15. We are less than 10 years away before quantum computers put an end to the crypto fiesta by decoding SHA256, and I cannot wait. Cryptocurrency has been promising to change the world for 15 years, but all it ever did was dump tons of CO₂ into the atmosphere and waste millions of years worth of computing power. 15 years and nowhere is crypto accepted as a payment method except maybe Lamborghini dealerships.

  17. They should get rid of Bitcoin. It is a pain and most people don't and will not understand it. It has ruined people's favorite sites which used to be paid for by using regular card method. This Bitcoin just causes problems. It needs to be banned and or allow people to use their debit or credit cards.

  18. While you are badmouthing crypto and saying no onem will ever use in the future. But people use it right now quite a lot actually

    For example:

    It is a Sunday at 3:40 AM and I just transferred R$ 9,585 from Brazil into $1940 in Europe. It took me few seconds and I paid .30 cents fee.

    I did it thyough Polygon matic. One of these cryptos. It’s undoubtedly the cheapest, fastest way to transfer money abroad these days. What other method is better? Please enlighten me

  22. The first second of this video explain that u have no plan what bitcoin is bitcoin is not a money transfer bitcoin is a energxy bitcoin is a werthholfing like a house only in better and Ure Fiat money will not have a werth in future look at the year 1971

  23. There is only one. All the rest are copies in the hope of being better. Only one base layer protocol will survive . This video will age just as rapidly

  25. You are exactly wrong, Bitcoin's value, just like fiat currency, is based on work. The only difference is that with bitcoin its computational work, where as with fiat it's all the work done by individuals in that country. For that reason Bitcoin is much more efficient way of creating value. Another way to verbalise it is that Bitcoin is value made by energy, or rather the energy that went into Bitcoin to make it has value, therefore Bitcoin has value. You made a video for people who know less than you to convince them your view is correct, but anyone who actually educates themselves knows you are a bullshit artist.

  29. Bitcoin will go down in history as the biggest by far far far far far Ponzi scheme of all time. I admit that people that buy now are going to make money if they sell at the right time at the first technical breakdown when this pops when the exchange traded funds start

  30. everyone in the comments are unintelligent and so is this "snarky" video with a questioning tone that purports wise cynicism, when its really just rooted in ignorance and arrogance. every point in this video is severely misinformed but more likely a deliberate choice to remain ignorant out of laziness. i mean people will consume this hot shit and actually praise you for it, so why even bother? people crave this idea that they know better, when you all really dont. im not even a bitcoin maximalist, however your glaring arrogance deserves to be taken down a notch. it will take a much longer time for it to become a stable store of value, but its highly likely due to its superiority as currency. you are cringe.

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