It’s a fair statement to say that bitcoin launched over a decade ago has gained popularity and attracted masses. Although the offerings of bitcoin make it extremely desirable and much more suitable than the fiat currencies, at the moment, one can’t rely entirely on bitcoin and replace fiat entirely with it.
Bitcoin the world’s first decentralized cryptocurrency is not managed or controlled by any company, organization or person. In addition to that, the price of bitcoin is extremely volatile. On one occasion, the price of bitcoin is skyrocketing while on another occasion it is falling deep down to the ground.
The extreme volatile attribute of bitcoin doesn’t make it a good medium of exchange like fiat. As there’s a potential risk of substantial fluctuation in the price of bitcoin, either the buyer or seller could definitely be at a losing end. If the price of bitcoin falls, the buyer is at a disadvantage and if the price surges, the seller is left in an unfavorable position.
This explains why only relying on bitcoin for buying and selling isn’t a good option at the moment. Besides, this also explains why many of the world’s largest companies don’t accept bitcoin. The fear of being a victim to volatility is sufficient for them to not allow bitcoin payments, hence, only carrying bitcoin can become problematic.
Besides lack of acceptance, bitcoin’s utility as payment isn’t feasible as well. One of the biggest problems limiting bitcoin from progressing as a medium of exchange is that bitcoin isn’t scalable. If the majority of the world starts to carry bitcoin only for daily use, several problems will arise due to scalability limitations.
At the moment, bitcoin is only capable of handling at most 7 transactions per second. Compared to other cryptocurrencies such as ethereum and ripple which are able to process 15 and 1,500 transactions respectively, the number of transactions handled by bitcoin is extremely low. When compared with other payment services such as Visa that manages 24,000 transactions per second, the number of transactions bitcoin can handle becomes extremely insignificant.
Therefore, that adds to the list of reasons making bitcoin unfit as a complete substitute for fiat currencies. Due to the aforementioned features of bitcoin i.e volatility and scalability problem, one can’t depend entirely on bitcoin and would definitely need fiat in daily life chores.