Bitcoin, the world's first successful cryptocurrency powered by blockchain technology, has the potential to replace fiat money.
Elon Musk, CEO of
In comments posted on Platform X, Musk called fiat money, which has five decades of history since the so-called Nixon Shock of 1971, “a scam.”
Musk made these statements while responding to a question from the @WallStreetSilv account, which asked, “What is the scam that is so normalized that we no longer even realize it is a scam?” (What'sa scam that's so normalized that we don't even realize it'sa scam anymore?). With a short and concise response, Elon Musk pointed to fiat money.
Although the CEO of X did not mention Bitcoin, the crypto community has taken his blunt comment as a sign of support for crypto assets.
Musk is known as the DogeFather, for his public and reliable support for Dogecoin and in his company Tesla still holds more than 10.700 BTC, whose value amounts to about $295 million dollars, at the time of writing this article.
On the other hand, Sergey Nazarov, creator of the blockchain oracle protocol Chainlink, indicated that the possible collapse of the current banking system could bring cryptocurrencies to the masses. Nazarov spoke in an interview with Bankless about how the demise of the banking system would prompt people to quickly adopt cryptocurrencies globally.
So, considering the recent statements made separately by Musk and Nazarov, it seems that the disappearance of fiat money is already agreed for the future.
Bitcoin, a better alternative to fiat money
The narrative that Bitcoin is a better option than fiat currency, as a form of money, has gained great traction in recent years.
Money, since the first organizations established by man, has been established as a means of exchanging wealth, whether you look at it from the bartering of products and objects, to the adoption of gold and the creation of fiat money. In billions of years of history, man has always established and used a form of payment. However, the latest expression of these forms of payment, fiat money, appears to be the most controversial to date.
One of the main criticisms made of fiat money is the lack of physical backup. Since the so-called Nixon Shock, which led to the breakup of the gold standard, the money issued by central banks is not backed by anything, but is based on the trust of the government that issues it. This has been the cause of one of the largest inflationary cycles in history, which has generated a series of inconveniences and great discontent, such as what was experienced in the 2008 financial crisis, and which has driven the search for a new alternative that solve all the problems of the system that fiat money represents. This is how Bitcoin and cryptocurrencies came to be.
The birth of Bitcoin and cryptocurrencies, as an independent, decentralized, transparent and global form of money, has given rise to an ongoing debate about the role of fiat money and cryptoassets in the economic system.
Currently, Bitcoin and cryptocurrencies are perceived as a better alternative to fiat money, especially because they are outside the control of governments and central banks and therefore resistant to censorship. Likewise, thanks to decentralization, Bitcoin and cryptocurrencies also provide greater accessibility for people to the global financial system and offer a high level of security.
Therefore, although Bitcoin's history is still very short, the market-leading cryptocurrency has caused quite a stir over its role as a value exchange, establishing a new form of payment processing and as a global store of value.
Even in 2019, Deutsche Bank talked about the role that Bitcoin, cryptocurrencies and fiat money could play in the global economy of the future in a report titled “Imagine 2030”, where the possibility of a social shift towards crypto assets stands out.
“The forces holding the fiat money system together appear fragile, especially after decades of low labor costs. “In the next decade, some of these forces could begin to unravel and demand for other alternative currencies, such as cryptocurrencies, could take off,” the bank said in the report.
Continue reading: The principles that underpin Bitcoin as the future of global money
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