Will cyrptocurrencies become the general form of payment in the future?

Oct 11, 2018
I think no.
Presented in 2009 by some (or some) developer Satoshi Nakamoto, bitcoin is often perceived as a decentralized virtual alternative to Fiat currencies. Indeed, its emission is not controlled by any government — everyone can mine bitcoins through a series of complex computer calculations, and the maximum possible number of coins of 21 million is fixed by the developer initially.

However, bitcoin does not actually perform any of the three traditional functions of money: the medium of exchange, the preservation of value, and the unit of account.

1. Almost zero acceptance as a payment solution

The first of the three functions of money is to accept it as a medium of exchange — that is, the ability to use the money to pay for goods and services. According to a study by investment banker Morgan Stanley for December 2017, of the TOP 500 e-commerce companies, less than 1% accept bitcoin. Moreover, the year before the figure was 5%, which means that the adoption of bitcoin by merchants is very much reduced. At the same time, for physical stores, this figure is close to zero both before and now.

Thus, at the moment bitcoin cannot be considered as a means of payment.

2. Cannot be used as savings

The second function of money is to be a means of saving. Of course, Fiat currencies are not ideal in this respect. For example, the dollar has lost about 2.8% of its purchasing power per year over the past century. Nevertheless, this rate of decline is relatively slow and stable, so the dollar can be considered an adequate means of saving, which can not be said about bitcoin.

The price of the cryptocurrency is very volatile. This is a little embarrassing, while it goes up, but since the beginning of 2018 bitcoin has fallen by almost half. This happens with shares, the prices of which are also volatile, but shares, unlike bitcoin, have intrinsic value. Bitcoin is completely unsuitable for use as a means of saving.

3. It is environmentally inefficient

Bitcoin mining is the process by which bitcoin transactions are added to the public Ledger and new bitcoins are created. Using mining software miners are competing in the development of computing-time-consuming "proof of work" to verify pending transactions. The miner who succeeds receives a transaction fee and new bitcoins.

According to the digi economist research platform, bitcoin mining currently requires over 60 terawatt hours of electricity annually. Switzerland, whose economy is estimated at $700 billion (with companies such as Nestle SA, Roche Holdings AG, Novartis AG, and Glencore PLC) and where 8.5 million people live, spends about the same amount for the year. Against this background, bitcoin in its current incarnation is perceived as a complete waste. In addition, it is mainly used for speculative purposes.

It is worth noting that, according to a study by the University of Cambridge, among the miners themselves, only 9% believe that mining does not harm the environment.

By the way, China is the largest consumer of electricity for bitcoin mining, despite the fact that in 2016 62% of electricity in China was obtained by burning coal.

Therefore, bitcoin is very expensive if you evaluate its impact on the environment.

4. Break-ins and thefts

In December last year, it was reported that a total of more than 980 thousand bitcoins (worth about $8 billion) were stolen from crypto-currency exchanges. This is almost 6% of all bitcoins in circulation, and almost 5% of the total possible number of bitcoins (21 million). This is an astounding frequency of theft, given that the asset appeared less than a decade ago. Not surprisingly, many users prefer to store their bitcoins in a" cold wallet " (a data carrier that is not connected to the Internet), and crypto-exchanges are not considered a reliable place to store funds.

I believe that the development of electronic payments is inevitable, and if you look at the payment trends that exist now - more and more people prefer to pay with electronic money. On the other hand, humanity will not soon be ready to completely abandon cash.

Tell me your opinions, please.


New Member
Nov 7, 2018
I do not think that in the future cryptocurrency can replace fiat money, but one thing I can say for sure is that crypt will specifically settle among people and will be actively used.