Will Bitcoin Fast-Track the Expiration of Fiat Legal Tender?
National fiat legal tender has controlled the global fiscal structure for centuries. The initial fiat currency was used in China in the eleventh century especially during the Yuan and Ming dynasties. The fiat currency did not have dominion over the world until bills of credit were dominant during the eighteenth and nineteenth centuries.
By and large, fiat currency could be exchanged for silver or gold, but this was relegated in 1971 following the detaching of USD from gold after the Nixon Shock termination. It was after this that the printing of fiat currency could be done without depending on the USD, meaning that nations could now print their own fiat currencies at will. In essence, this marked the commencement of the expiration of fiat currency.
In 2009, advent of the cryptocurency Bitcoin introduced a practical substitute to fiat currency. The virtual asset is a decentralized computerized software package which cannot be controlled. It has a fixed maximum supply of twenty one virtual coinage whose limit cannot be exceeded. This is different from fiat currencies which countries can always print at will. As a result, while Bitcoin is a deflationary currency, the fiat currencies are fundamentally inflationary.
In most cases, Central Banks print fiat currencies to finance the budgets of their nations, with some nations issuing bonds. One of the countries that has been affected by issuing such bonds is the US, whose national debt is in trillions, which could lead to a fiscal collapse as a result of the dire situation.
Is worth noting that the reckless printing of money by some countries has resulted in hyperinflation. A country like Zimbabwe suffered extreme devaluation, a situation which led to the citizens to buy Bitcoin in order to safeguard their savings. This has inspired people to believe in the virtual coinage, which can be globally used as a true alternative to fiat currencies.