It is hard to decide the battle. One praises banknotes and fiat and the other one is praising cryptocurrencies and Bitcoin.
Let’s take a look at the comparison between them and what type of currency has advantages.
Properties of money
Money serves two main purposes. It is a store of value and means of exchnage. The money we normally pay with must therefore have some value. Both fiat and Bitcoin meet this. At the same time, the money must be transferable so that you can pay with it in different places. Bitcoin is leading in international trasfers here, because it is very easy to take it to the other end of the world or send it there. Fiat requires time for such a transmission and has to go through regulations, which can take several days.
However as for daily use, Bitcoin is still somewhat harder to use for most people than cash or payment card. Nevertheless this is changing fast, because there are companies working on bringing the digital currencies to the mases with as much ease as possible.
We will also look at interchangeability. Bitcoins and fiat are interchangeable. If you get a $ 5 bill and exchange it for another, you will still have $ 5. Bitcoin works just like that as well.
Bitcoin has a limited amount of only 21 million coins. Fiat money on the other hand is being printed almost at will. For example, during pandemic times, governments have shown us that massive amounts of money can be printed if needed. So the rarity of Bitcoin will increase, but what about fiat money?
Bitcoin has been with us for some time. During that time, it gained the trust of many people. In general, the older the payment method, the more people trust it. We have all grown in the times of fiat money and it makes perfect sense for us to use it. But why not try something different?
Bitcoin and cryptocurrencies in general have the potential to show us the future of money. We should not rely only on banknotes, printed money and minted coins indefinitely. We will need another system that is friendly, functional, fast and simple. That could be Bitcoin or maybe even better next generation digital currencies, that solve the problem of complicated use for the average person.