Can Cryptocurrencies Truly Replace FIAT Currencies?

Can Cryptocurrencies Truly Replace FIAT Currencies?

In the last couple of years, the world has witnessed the emergence and popularization of cryptocurrency. Even though the likes of Bitcoin went from a relatively unknown concept to worldwide phenomenon, most of the planet’s population is still relatively oblivious to the technology of blockchain. Majority of the world still prefers FIAT currencies and many believe that cryptocurrencies might never be able to completely replace real money, although, there might be a way to turn people towards crypto.  

Pros and Cons of Crypto

There are several reasons behind both hope and skepticism towards cryptocurrencies. If we dissect Bitcoin, several major advantages catch the attention instantly. Crypto is much faster than the traditional banking solutions, enabling blistering speeds of transactions. What most banks achieve in days, BTC can compute in a matter of minutes. The fees of those transactions are little to none, compared to significantly higher rates of international money transfers. In its essence, since the Blockchain system is decentralized, it’s almost impossible to breach or hack, which provides improved security and privacy compared to the competition. 

Having some significant pros, almost never excludes disadvantages. The main problem the general population has with Bitcoin and other cryptos is the constant volatility and unfamiliarity. If we observe the price of BTC since 2017, it has drastically changed and often in extremely short periods of time. Since BTC is not regulated by any currency and entity in the world, nobody knows what the future might bring. Other than that, people simply don’t know what blockchain and cryptocurrencies truly are.

So, what might be the solution to this problem?  

Maybe Libra can turn things around? 

There is a new cryptocurrency on the horizon, the almighty “Libra”. Although Facebook has already released a detailed Whitepaper document explaining all the available information about an upcoming release of their very own cryptocurrency, all those details may be subject to a change. This should be the cryptocurrency with almost all the advantages of Bitcoin and virtually none of its flaws. 

In June of 2019, Company announced that Facebook will be Launching Libra in the first half of the next year. Libra will be primarily available for transaction between the Facebook, Messenger and Whatsapp users. There is yet no information about what the value of Libra will be, but considering how many big companies have already announced their participation and investment into the “Libra Association”, it is simple to foresee that its price should be much less volatile. As for the companies that have allied with Facebook, the list goes: Spotify, Uber, iLiad SA, Union Square Ventures, etc. Interesting fact is that in order to become an associate, it’s mandatory to invest 10 Million US dollars into this project and considering there are already around 30 big companies in the list, Libra might be the “Next big thing”. 

Looking at the list of partners, a simple conclusion is that next year people will be able to pay for their taxi rides, network bills, online shopping and many more, using Libra. 

Difference Between Libra and Other Cryptos

At this point, most are interested in the differences between an upcoming Libra and current cryptocurrency king – Bitcoin. From the available information it seems that while Bitcoin is decentralized and no single entity in the world controls it, Libra will be controlled and governed by Facebook and associated companies. The price of BTC is not dependent on government currencies, while Libra is said to be tied to national currencies and stable financial assets. Libra will enable transactions between Facebook users, which will be just like transactions through the banks. Bitcoin is more of a tool of investment and usually not used as a transaction currency between relatives and friends. 

Facebook has also announced a new subsidiary called “Calibra”. This is where the Libra cryptocurrency wallet will be developed. Within a couple of months of Libra’s launch, Calibra could become the most popular cryptocurrency wallet service in the world. 

Libra Can be a bridge and garner trust

Aside from the fact that Libra could potentially and technically be a better solution than any other cryptocurrency, it has one more extremely important and significant advantage behind its back – The Trust. Majority of people around the world are accustomed to Facebook and use it on a daily basis. The company boasts mostly positive reputation and extreme customer loyalty. Bitcoin on the other hand is an alien concept, that came from an anonymous person. The biggest asset of FB is the familiarity and it could be a key in this whole game. People can trust Facebook to be the bridge into the world of blockchain and we might truly see the revolution that cryptocurrencies have the potential to produce within our everyday life.  

Libra just might be able to do a small task of changing the world… 

George Khmelevski

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