I’ve commented before that crypto money does not represent the end of the world for physical currency as we know it. Rather, cryptocurrency is yet the latest alternative to using coins and bank notes. It follows a long list of options necessitating the use of physical money, including checks, credit cards, debit cards, and various forms of automated electronic payments from one bank account to another.
To look into this even further, what about promissory notes and even bank notes? Aren’t bank notes a substitute for carrying around huge amounts of coins? Bank notes originated as a way a bank could hold your precious metal coins, supposedly representing that these coins were on hand to be redeemed for the bank’s note.
Despite all these “innovations,” physical coins, even in their present form as fiat money coinage, are still available and viable. Barstool Sports founder Dave Portnoy recently posted on X, “If the point of Bitcoin is to be independent of the U.S. dollar and non-regulated, why does it basically trade exactly like the U.S. stock market nowadays?” adding, “Market up, Bitcoin up. Market down, Bitcoin down.”
Gerber Kawasaki Chief Executive Officer Ross Gerber posted, “BTC price movements are related to sentiment. Risk on, up. Risk off, down.” Portnoy and Gerber’s comments suggest cryptocurrency is not the decentralized alternative to traditional money that proponents claim.
Coin collectors can collect the physical tokens that represent some of this cryptocurrency. Still, when you look at cryptocurrency from a macroscopic rather than microscopic economic viewpoint, it is simply the most recently invented substitute for physical currency, not the all-encompassing replacement for it promoted by the cashless society folks.