How Cryptos Could Replace Fiat

By silvergoldcrypto | silvergoldcrypto | 15 Apr 2019

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Traditionally, monetary systems or banking systems collapse when there is inability to redeem what was promised. For example, if dollar notes were issued for gold stored at the banks, and the banks fail to supply the gold related to the dollar note when presented by bearers of the notes.

However, the current monetary system has eliminated that problem by not issuing dollar notes upon gold stored, but upon a promise (to pay nothing really). You cannot redeem gold or anything from the bank, when presenting the dollar note.

Instead, dollar notes (cash) now act like gold did back when it was part of the monetary and banking system. So, while cash is still used, individual banks can still fail if they are unable to honour cash withdrawals by there customers. But, the banking system as a whole will not fail, since technically, there is an unlimited amount of cash available, and they can even outlaw cash (which they are busy doing).

Does this mean that the international monetary system will not and cannot collapse? No, it will collapse. People can refuse to use fiat by incrementally holding value in real goods instead (such as land, gold, commodities, etc.), and then mainly trading from one good to another (barter).

However, this is where cryptos will be instrumental, since it will perfectly facilitate this type of trading.

A major shift in this direction will come when big organizations like your local bus company starts monetizing their rides by issuing a crypto token, or your local municipality starts tokenizing its services, for example. I believe this will be a big part of the crypto space in the years to come.

Things will hasten towards this when, individually, banks start collapsing (which is probably not far off).

So, instead we can then look at our cryptos presenting goods and services, instead of a certain amount of fiat.


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