Some of my friends chuckle when I suggest the idea that cryptocurrencies will replace fiat currency in the near future. They find it unbelievable that this magical Internet money could ever replace the fiat currency system we were born into.
It never occurred to me to question the system either, until the financial crash of 2008, which prompted documentaries like Zeitgeist and Inside Job to reveal the mechanics behind the monetary system. It came to my attention that the debt-based fiat system we live in is both exponential and unsustainable.
The question then became, what could possibly replace a system that's so deeply rooted into our daily lives? There were the gold and silver advocates, who would suggest returning to a gold standard, as precious metals have been considered real money for millennia.
However, just because gold has been accepted as money for thousands of years, doesn't mean it always will be. Consider that horses were the main form of ground transportation for thousands of years before the invention of the automobile. At the time, many people scoffed at the idea that the automobile could replace horse-drawn carriages, but now we consider freeways packed with cars to be completely normal.
Looking back, if we were to ask our great grandparents' generation what they thought money would look like in the future, I wonder what they would have said? Would they have imagined people tapping plastic cards or smartphone devices to make purchases? Stepping out of the present and envisioning the future world is no easy task, and requires keeping an open mind.
The invention of the mainframe computer was completely novel, and so was the use of cryptography and distributed systems to create a trustless form of money. People had no idea that their money would transition from paper bills and coins to electronic records in mainframe databases. Similar to how people today cannot fathom money transitioning from their bank accounts into secure blockchain databases.
I think the transition of money into a new form is particularly difficult for people to accept because they tend to have an emotional attachment to it. Even within the crypto market itself, we can see the intense tribalism between different blockchain projects. It seems that money holds a special place within the human heart and forms part of our identity, and therefore many are willing to fight for a failing system that doesn't even serve their best interests.
It takes time for people to adapt to new technology. But in the end, technology always wins. The Internet was developed in the 60s and 70s, and many people laughed at it until it really took off in the 90s. I believe cryptocurrencies will follow a similar path in the coming years and decades.