There’s an interesting question that was brought to brought to my attention recently. Will Cryptocurrencies Such as Bitcoin Cause us to No Longer Use Cash?
Cryptocurrency supporters love to say that Crypto will cause us to no longer want to use cash, and that they could kill off cash. In their minds, cash is dirty and flimsy, it’s awkward and it doesn’t support reward programs and loyalty programs. While all that is true to an extent, cash has its benefits.
For starters, it’s completely anonymous and it is accepted everywhere. Bitcoin is anonymous to an extent but it is possible to see some evidence of wallet activity. In addition, bitcoin transactions require some form of device to use them. Cash is waterproof (especially in countries with plastic notes), far more portable, and it’s easier to divide up into small amounts.
Apple Pay and Android Pay, which link to standard bank accounts, have both struggled to gain traction. Yes, some people do link all of their cards to it, but a lot of people do not, and not all stores even accept those mobile pay apps. In many parts of the world there are still numerous stores that do not accept cards at all. Why, then, would we add yet another platform to potentially accept? Cryptocurrencies are volatile, which means that it is hard for stores to know how much the charge in whatever cryptocurrency being used for their goods and services. The level of liquidity is also fairly low if you get outside of some of the main coins. This makes it a risk for companies to accept payments using it. Why would anyone accept a payment in a currency that could lose half of its value before they have the opportunity to “cash it out”. Indeed, the phrase “cash it out” should indicate that we have a long way to go before cash is no longer king. Eventually cryptocurrencies may become the primary method of taking payments, but we are a long way from that.