A World without CA$H...is it possible?

May 31, 2020

⌛ Reading time: 8 minutes

Our world is growing increasingly digital, that´s a fact none can deny. Since the invention of Bitcoin as digital asset the world has seen a rapid increase, in numbers, in what we know as cryptocurrencies and its increasingly widespread use in everyday tasks.

The invention of the smartphones linked to the development of applications connecting those smartphones to digital wallets allowing us to turn our device into a full banking system as well as a remittance and payments tool, has allowed millions of unbanked people to have access to descentralized financial systems granting, somehow, financial inclusion in a society where traditional financial systems lack true inclusivity.

Slow but steady, worldwide adoption of cryptocurrencies like Bitcoin, Ethereum, XRP and others has open the possibility to explore and create new fields inside traditional financial systems and outside those systems too. The concept and design of some blockchains oriented to fast transactions with low fees, as an example, has allowed the implementation of novel systems like Micropayments applied to a wide range of possibilities ranging from Web Monetization techniques to real time streamed payments in the industrial sector.

The spread and usage of cryptocurrencies applied to real world use cases(and it has many use cases actually) has found opposition from traditional and powerful sectors linked mainly to finance and wealth industries and worldwide governments, who see in the existence and application of those cryptocurrencies a latent danger for our oldest acquaintance and king of all that exists: the money.

While paper money has helped the world exchange value for goods and services since its inception, it’s time the money system updated itself to satisfy today’s needs: the needs of a rapidly changing technological world.

Could cash money be replaced by cryptocurrencies?

According to some financial experts and specialized publications could be possible for cryptocurrencies to unbank traditional fiat money, replacing cash in every area where paper money was traditionally involved.

Deutsche Bank, one of the world’s leading financial services companies has predicted that cryptocurrency could replace cash entirely by 2030 due to the fragility of the current system.

“Until now, cryptocurrencies have been additions, rather than substitutes, to the global inventory of money. Over the next decade, this may change. Overcoming regulatory hurdles will broaden their appeal and raise the potential to eventually replace cash.”

(Imagine 2030: The decade ahead, Report by Deutsche Bank experts).

Cryptocurrency enthusiasts and blockchain experts believe that cryptocurrencies will replace paper money in a very short period of time given the widespread adoption and the growing interest shown by the Internet population regarding the usage of cryptocurrencies to pay for goods and services instead of using money.

”... when curiosity itches and you try it for the first time, you can´t stop doing it: it is so easy, fast and accessible that you repeat it over and over again until you finally convince yourself” – says an user participating in an anonymous survey conducted by a company linked to the world of cryptocurrencies and blockchains, referring to the process of top up his mobile phone using some “cryptos”.

Traditional money takes its value from being backed up by precious metals like Gold or Silver, but there is another different and not so tangible active which is backing up paper money: TRUST.

Fig 1. Paper money takes its value from several sources but most important is TRUST! (Photo by Alexander Mils on *Unsplash*)

What gives old money its REAL value is the possibility of being able to exchange it for goods and services, and that possibility comes with the trust deposited in its forwarding value where people are confident that exchanging some goods they own for paper money will reconvert at some point in the future, in another goods or services they want to get exchanging what they need by the money they have previously received...so as we can see, deep down it is a matter of trust.

If i we extrapolate the matter of “trust” from paper money to cryptocurrencies, we found that some cryptocurrencies like Bitcoin or Ethereum have the trust(a real trust) of many people and even companies. As more people, stores and companies make use of cryptocurrencies to exchange goods or services the more trust will be deposited by community in the real value of those assets. After all the trust deposited in money was not built from one day to another: it took ages for people start accepting money as a real valued exchange asset. **:)**

Author Marion Laboure believes that cryptocurrencies can become widespread if they over come three main hurdles:

❶ Become legitimate in the eyes of governments and regulators

❷Bring stability to the price and bringing advantages to both merchants and consumers.

❸Allow for global reach in the payment market.

If those can be overcome, “As we look to the decade ahead, it may not be surprising if a new and mainstream cryptocurrency were to unexpectedly emerge.” - she said.

Undoubtedly cryptocurrency adoption must necessarily pass through the macabre terrain of regulation before we can see it replacing somehow paper money. But if it does there is no doubt that the king would have his days numbered.

Can we rely on living with cryptocurrencies today?

Many people say YES to the question posted above. My personal take is that it is too early to rely only in cryptocurrencies for a living. Many stores accept cryptocurrencies as a payment method(Bitcoin mostly) and many people have expressed their wish to be paid in cryptocurrency in exchange for their work, but the strong opposition offered by governments and traditional financial institutions has caused the level of trust needed to fully accept the exchange value of those assets to be lower than expected.

In real life we have some examples of people who have tried to rely only in cryptos like Bitcoin to make a way of life. Olaf Carlson-Wee, Founder & CEO of Polychain Capital who previously worked for Coinbase told once to Forbes magazine how he was making a living without paper money. By the time he was interviewed, to find a place or a merchant acepting Bitcoin was really tough, so he used some hacks to rely in Bitcoin when paying like using Coinbase Shift debit card and pay a third party in BTC in exchange for that third party pay his fees in USD.

Most people trust and uses regularly cryptocurrency debit cards to pay expenses in restaurants, stores and to pay for all sort of goods and services on the Internet. People find it easy to use(you can use those cards as a regular debit card wherever Mastercard and VISA cards are accepted). The problem is that using those cards you are not truly exchanging Bitcoin for a service or good: you are exchanging your crypto into fiat just by that fiat being deposited to the merchant account, so, basically the merchant is not accepting your cryptocurrecies, just your money. **:)**

Fig 2. *Cryptocurrency debit cards are the preferred way for people to spend their coins on regular bussines.(https://cryptoiscomming.com)*

That not means there is no merchant or store that does not accept cyrpto coind as payment method. In fact, if we take a look at https://cryptwerk.com/ (online directory with hand-picked companies, websites, shops, services where you can pay with Bitcoin and other popular cryptocurrencies.) we will be surprised on how many stores and merchants actually accept Bitcoin and other cryptocurrencies as payment.

As part of a social movement, trying to show the people the power of cryptocurrencies and how widely accepted they have been till today, some people has been promoting a challenge on the Internet using all the power of social media channels: #FiatFreeChallenge summons all people to pay their expenses using only cryptocurrency, searching for places, stores and merchants who accept “crypto”s as a payment method and then explaining to community their experiences giving some kind of feedback on how was the experience trying to relying only in cryptocurrency instead of fiat money to pay expenses. The movement is strengthened in social media sites like Twitter, Hive and Flote.

In my own experience i can tell you, dear reader, i use services like Alfatop, Bitrefill and Hablax to top up my cellphone and buy some gift cards for my family and friends so, somehow i am relying on cryptocurrencies to do some tasks i was doing with paper money months ago: i am not making my own particular way of life but somehow living(at least a tiny part) of Bitcoin and other cryptos.**:)**

Final thougths...by now

As i said i think it is still a bit early to completely trust on crypto and quit paper money once and for all. There´s still some non-acceptance degree which makes the use of cryptocurrecies a bit harder. The truth is we cannot escape using fiat money in today world, because let´s be fair: cash is still the king.

Maybe in next years we could see some kind of change, mostly in people´s minds, regarding using cryptocurrencies as a widely accepted payment method, hence replacing old money- The King is dead: long live the King!

Until that moment we can just enjoy the fact to find ourselves among the first ones(millions btw :) ) on using some kind of cryptocurrency to access some services or pay for some goods...in the real world: we are pioneers!

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*✰* Blockchain powered cellphones...the FUTURE?

*✰* Lightning Network: achievements and challenges for 2020

*✰* Weird use cases for blockchain technology!

*✰* Micropayments: beyond content creators.

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There are many things you can do with paper money you cannot do with cryptocurrencies and there are certainly some things you can do with crypto you cannot do with money; but do you know about one cool thing you can ONLY do with cryptocurrencies today? **:o**

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