Will crypto replace fiat currency? Elon Musk comments on Bitcoin

February 21, 2019, | AtoZ Markets – This week, Tesla and SpaceX project technologist and CEO Elon Musk during the ARK Invest’s broadcast, called the bitcoin structure (BTC) “pretty brilliant,” saying that digital currency is “a much better way to transfer value than paperwork.” Was the entrepreneur of South African origin right or wrong? AtoZ Markets decided to dig further in the story and gather all the possible opinions on this topic to have a clearer picture about the future of cryptocurrencies.

Elon Musk says it is important to create an “extra Bitcoin”

Recently, Elon Musk had an interview with ARK. Most of the conversation was dedicated to Tesla and the bullet points which made the company stand out. The host asked Musk’s opinion about cryptocurrencies. When asked whether bitcoin will become the only native cryptocurrency of the Internet, Musk said that “one of the drawbacks of cryptocurrency is that it is computationally quite energy intensive. So there must be some restrictions on the creation of crypto. But at the moment it’s very important to create an extra bitcoin.” Despite the positive comments regarding cryptos, SpaceX CEO emphasized that “it would be wrong to use Tesla resources to participate in cryptography. We are just really trying to accelerate the promotion of sustainable energy.”

On October 2018, Elon Musk stepped down temporarily as the chairman of Tesla, after SEC’s charges on Elon Musk for fraud and deceiving investors. After the announcement of his step down, the stock price of Tesla rose 18 percent.

Numbers give a hint about the future of cryptocurrency

AtoZ Markets took the initiative and asked the same question to our readers through various channels, in order to get their opinions about the cryptos perspective of replacing fiat currency. 57% of the respondents answered “No” on the question “Will cryptocurrency ever replace fiat money?” and 43% gave a positive response.

“Cryptocurrency is very much here to stay,” said senior futurist at the DaVinci Institute Thomas Frey, during one of his latest interviews, noting that he’s speaking to the Federal Reserve in September on the topic.

AtoZ Markets moved further and researched what crypto enthusiasts think about the future of digital assets and collected some comments from Quora users. Cryptocurrency exchange founders, blockchain and ICO writers and crypto projects CEOs are split in two opposite camps; one camp considered that cryptos will replace fiat currency sooner or later, whilst the other camp disagreed with this possibility. Most of those who believe that cryptos will replace fiat currency in the future, mentioned the following pros:

  • Cutting down the transmission and intermediary costs of transactions
  • Transparency and high speed and simplicity of transactions
  • Security as transactions of cryptos are verified for authenticity
  • Impossibility to manipulate transaction records or duplicate cryptos that might reduce corruption
  • Blockchain records can be viewed by the concerned authority, and they can even track how the funds issued by the government for economic welfare are utilized
  • Completely traceable and can easily use to identify fraudsters
  • Using cryptos makes it hard to be abused by third parties

Cryptos Are Still Considered as an Investment and not as Real Money

Quora user under the name Nele Maria Palipea, which is the founder of 8-bit.io believes that “the time when cryptocurrencies completely replace fiat money is most likely a lifetime away.” Matias Berra, a marketing strategist at KuCoin stated that cryptos are much better “than a piece of paper that we give value to because some powerful invisible entity says so anyway.”

Another user under name Vishnu Reddy who calls himself a crypto enthusiast noted, that “the technology is evolving and the cryptocurrency is gaining popularity every single day.”

However, many blockchain experts claim that cryptocurrency is still considered more as an investment rather than a payment utility, due to its highly volatile nature. Moreover, the cryptos fluctuation can be massive which makes it unreliable for daily transactions.

Thomas Frey in his turn stated during one of his speeches that “cryptocurrencies are going to displace roughly 25% of national currencies by 2030. They’re just much more efficient, the way they run.” Although certain blockchain experts and financial analysts would disagree with Google’s top-rated futurist speaker.

Mark Helfman author of “Consensusland: A Cryptocurrency Utopia”, believes that “governments will always need a way to raise taxes, manage the money supply, and buy things, and there’s no better way than fiat.” He continues:

”I expect some countries will try an asset-backed currency too – maybe using blockchain as its operational infrastructure (instead of printers and banks). It will never replace fiat.”

Digital Assets Will Stay along with Cash

Despite all of his scepticism, Helfman stated that cryptocurrency fits nicely into trading and with some reasonable changes to the US tax regulations, could very well flourish along with dollars and become another mode of payments, rather than entirely replacing fiat.

Those who said, that fiat currency will never be replaced by cryptos, among cryptocurrency disadvantages mentioned that:

  • People are buying into it because of speculation
  • Cryptocurrencies are, as of today, a speculative investment asset with no intrinsic value
  • Cryptocurrencies are way too unstable in price to be used by institutions for taxes paying
  • Cryptocurrencies have no guarantee by any government authority
  • When crypto is not accepted or not useful to make any transaction, then it is not worth of its existence

Elon Musk said during the ARK broadcast that cryptocurrency “bypasses control over the currency, and paper money goes away, and crypto is a much better way to transfer value than paperwork, that’s for sure.” Last February, Musk wrote in his twitter that he possessed only 0.25 BTC, noting that in addition to 0.25 BTC, which his friend gave him “many years ago,” he “literally owns zero cryptocurrency”.

The major financial industry representatives also claimed that bitcoin occupies a unique place as a repository of value or “digital gold”. Mike Novogratz, the former partner of Goldman Sachs and founder of the crypto-merchant bank Galaxy Digital, said that “bitcoin is going to become digital gold, the place where you have sovereign money is not US money, it is not Chinese money, but sovereign money.” Twitter co-founder and CEO Jack Dorsey, who believes that bitcoin will become the “native currency of the Internet,” said earlier this month that he believes that bitcoin is the crypto which most wants to be a currency, compared to others”

What do you think? Will cryptocurrencies eventually replace cash? Let us know in the comments section below.

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