How Fiat Currencies and Cryptocurrencies are Related
Can we talk about cryptocurrencies without fiat currencies?
Fiat currencies were invented long ago, and people utilized fiat currencies for years.
Fiat currencies are still the main currencies that rule human lives.
There is a strong connection between fiat currencies and cryptocurrencies.
The relationship between fiat currencies and cryptocurrencies becomes evident when people discuss wealth, earnings, investments, and spending.
Look at a cryptocurrency performance graph(s) as exemplified below.
Graphics: A bordered screenshot from CoinGecko.
Wealth is objectified in the real world.
Real-world objects, such as minerals and metals, land, trees, crops, houses, buildings, etc., manifest the meaning of wealth.
After modern inventions like electricity, machines, communication devices, computers, the Internet, etc., objective wealth in the real world has also been represented in electronic and digital manifestations.
People can now store, spend, and transfer electronically, although national mints still print paper money notes.
Global citizens continue to withdraw paper money notes from bank branches and ATMs, because a significant fraction of global citizens use paper money notes, and small/big shopkeepers and vendors, accept paper money notes.
We still have to say that Bitcoin will hit the USD 100k or other mark!
Do we say that the rate/value of a national fiat currency in terms of any cryptocurrency?
For example, do you ask, "What is the value of USD in BTC?"
Why don't we say that USD is BTC/60k or some appropriate rate value of BTC?
Fiat currencies drive most investments in cryptocurrencies.
Indeed, fiat currencies feed cryptocurrencies, not vice versa.
People buy cryptocurrencies using fiat currencies and wait for their price to rise!
Cryptocurrencies have been used similarly to purchase/sell stocks.
Conclusion
I know that a day may come when the situation will be changed.
Will the usage of fiat currencies reduce?
Will the market accept cryptocurrency payments?
I used BitcoinCash, aka BCH, to buy hosting and domain names.
It took at least twenty minutes to settle the transactions and complete my online purchase by peer-to-peer BCH payments.
The other day, I watched a video on X about somebody's experience using cryptocurrency to buy things in countries that officially accepted BCH as their tendering cryptocurrency.
They could not succeed in completing payments using BCH in those countries, i.e., it showed pending transactions, and the shopkeeper couldn't deliver the items they wanted to buy using cryptocurrencies. Finally, they used fiat currency notes and credit card payments.
Still, the speed of settling cryptocurrency transactions is not enough to make it a tendering currency for day-to-day market sales/purchases.
<> Originally published in my Publish0x blog.
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About me
I am a researcher and contribute to the overlapping areas of STEAM (Science, Technology, Engineering, Arts, and Mathematics). I am an active user and promoter of GNU/Linux, free and open-source software. I develop cybersecurity and information security solutions, specifically graphical authentication security.
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Text Copyright © 2024 Debesh Choudhury — All Rights Reserved
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Cover Image: A screenshot from CoinGecko.
All other images are either drawn/created/screenshots by myself or credited to the respective artists/sources.
Disclaimer: All texts are mine and original. Any similarity and resemblance to any other content are purely accidental. The article is not advice for life, career, business, or investment. Please do your research before you adopt any options.
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#cryptocurrency #bitcoin #bitcoincash #fintech #payments
May 19, 2024