- February 9, 2023
- |Bitcoin, Cryptocurrency
A Bitcoin self-custody writer and mentor wrote on Twitter how he convinced ChatGPT that crypto was the future. He announced that the machine learning program was “now a Bitcoiner.”
The Bitcoin maximalist ‘Parman’ led the AI on a journey through a series of questions to show how humanity could end central banking. He explained how he guided the tool away from fiat and towards crypto adoption as a solution – with Bitcoin as the only choice.
Interestingly, a growing chorus of some of the globe’s most prominent thinkers continually sounds the alarm on traditional currencies. Hedge fund manager Ray Dalio argued in early February that fiat was in earnest “jeopardy” as a store of wealth due to many nations printing too much hard cash.
But what makes cryptocurrencies like Bitcoin more attractive than traditional banking for many people (and AI programs)?
It primarily comes down to the flexibility, utility, and robust nature digital assets embody in a very fast-moving and complicated world.
Bitcoin Vs. Fiat: Why Crypto Wins
Ease Of Transfer
One of the most notable issues for traditional finance is the cost and complexity of sending funds across banks and borders. Remittances, a vital source of income for billions across the globe, totaled about $626 billion in 2022 (5% growth from 2021), even amid the fallout from COVID-19.
Bitcoin’s borderless nature makes it ideal for remittances as users do not have to pay high transaction fees to a bank, spend money on an intermediary, or wait days for funds to settle. The World Bank reported the cost to send $200 across global borders to cost an average of 6% of the total transaction in Q2 2022. Fees for many Bitcoin transactions are cents or just a few dollars depending on size.
Every person who relies on fiat currencies has experienced inflation.
The inflation rate for the USD hit 9.1% in June 2022 and still sat at 6.5% in December 2022 based on the Consumer Price Index. Bitcoin’s limited supply (21 million coins are the maximum amount) means the digital asset is regarded as inflation-resistant by empowering holders with stable purchasing power. Overall, Bitcoin’s nature and lack of links to traditional economies or currencies make the asset much more beneficial than fiat for consumers looking for financial stability.
Bitcoin is known as an immutable digital asset as it’s backed by the blockchain, which means transactions are unable to reverse and are public to promote transparency. Bitcoin’s decentralized network also means it’s impossible to hack completely, and many nodes ensure the entire system keeps running even if a part goes down. Fiat currency is a different story.
Fraudsters can produce counterfeit cash, and there are plenty of stories about local businesses having to deal with fake bills. Unlike Bitcoin, fiat currencies can also wholly collapse under the wrong circumstances. At one point, Venezuela’s bolivar collapsed by 99.99%, sending millions into deep poverty.
Crypto Is The Better Choice
Even though billions worldwide rely on fiat currencies to buy, sell, and trade, cryptocurrencies like Bitcoin represent the future of finance due to the asset’s advantages over traditional cash.
Bitcoin’s seamless cross-border nature, inflation resistance (compared to fiat), and the security and stability of the blockchain make it a viable economic tool.
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