IMAGINE THERE’S NO CURRENCY

By Alessandro Raffelini, August 2018

Twitter: @raffelini

The Model of Coexistence of Fiat and Cryptocurrency in an Economic Area

“national currencies and cryptocurrencies with real functionalities can coexist.”

Bitcoin is certainly the most famous cryptocurrency in the world but what is a cryptocurrency? Simply, it is a fully decentralized, secure, digital currency whose creation is controlled by cryptography. At the writing time there are several alternative cryptocurrencies to Bitcoin, called Altcoins, such as Ether, Ripple, Dash, Litecoin, EOS, Stellar, Cardano, Monero, Bitcoin cash, IOTA and many others. In 2018 cryptocurrency market capitalization decreased dramatically compared to 2017 Over this period (Dec. 2017 — August 2018), market capitalization dropped from $572.5 billion to about $200 billion. Currently Bitcoin dominance exceeded 50% of the entire crypto market and most of the Altcoins are today 80%-90% down from their highest prices.

Although now altcoins continue to exist, I believe that in the future only a few cryptocurrencies will survive besides Bitcoin. My intuition is that only those cryptocurrencies with ‘real functionalities’ behind their solutions or projects have the chance not to desapear. From this simple observation, I made a first attempt to elaborate a theory based on the coexistence between fiat money and virtual currencies since I consider the future of money fully digital and decentrilized.