Bitcoin will never be "real money"
For this article, I am specifically focusing on Bitcoin because it is the only currency I have actually purchased and used in the real world. I have read about others and they all seem to work the same way and have the exact same problems.
There is no way that Bitcoin or any other cryptocurrency will ever replace what most people think of as "real money" for a few very simple reasons...
First, Bitcoin is hardly accepted any place in the real world. You sure can't pay your bills with it. You can't buy a coffee except in very few places that I have heard of. I can't find a single physical business in my town of around 160,000 people.
Second, there are few places online to spend Bitcoins. Yes, more places are starting to accept them. I even accept them on one of my other web sites. But of all the places I normally shop online, none of them accept Bitcoin without going to a third party website and buying giftcards.
Third, it is crazy how hard it is to convert convencional currency into any cryptocurrency. You have to jump through hoops and in the end pay crazy prices. For example, today when I purchased just a small amount of Bitcoin, the price was $16,450 (US Dollars). Now I used a debit card to make the process go fast and I expected to pay a fee which really wasn't too bad. I only wanted to buy about $40 worth for testing of a program I was writing. I didn't want to endanger my normal wallet so I created a new one and went to add money. Well by the time the transaction was completed I could only get $36.59 worth of bitcoin. Still, I expected that. But that should have gotten me 0.0022243 Bitcoin. But I only received 0.0021069. So in the 30 seconds it took me to place my order, the price jumped up to $16,479 then dropped back down to $16,472. Basically, the cost is very crazy but hopefully it keeps climbing!
Fourth, the system is unrealistically slow. So slow that it can never be used in the real world by anyone that is not willing to keep a huge buffer. I sent a test transaction with a high priority from my new account to another test account that was empty. I did this manually through the website where I purchased the Bitcoins. The transaction took about 65 seconds to show up in the new account from the moment I hit SEND. Now you think that seems fast enough but imagine that delay in a busy store. My debit card takes less time than that including the swipe, pin, and done. But that is not the big problem. Before that money can really be spent, the transaction needs to be verified and added to the blockchain. Remember, I paid extra for a priority transaction. After 8 minutes, there was only 1 confirmation. After 43 minutes there were only 4 confirmations. Once there are 6 confirmations, the transaction is considered SAFE to spend. For small amounts, personally 4 confirmations is ok with me. But anything less is risky. Because if it gets reversed, you are out of luck. OH YES, they can be reversed (although rare). But have you ever had someone hand you cash and have it magically be yanked out of your wallet 20 minutes or more later? NO!
Fifth, sending money is either extremely slow or extremely expensive. Receiving money is FREE and that is wonderful and that seems great for businesses because they don't have to pay the credit/debit card fees which really add up. Instead, the fee is paid by the person sending the money. Ok, that sucks but if it were similar in price to credit/debit card fees, it would only mean that each transaction goes up in price by about 3%. BUT IT IS NOT THAT CHEAP! For my priority transaction that was crazy slow to verify, it cost me 0.00103953 Bitcoin in fees. That was $17.13 at the time of the transfer. And the amount being transfered has no impact on that price! So after buying my Bitcoin and making one transfer, I lost around $21. Now you can pay less but be prepared to wait a long long time before the money actually gets transfered and becomes usable. Judging by the averages I see in several Bitcoin wallet apps, they say priority confirmation should cost around 0.00104 bitcoin and take about 10 minutes. My experience took just under an hour to get all 6 confirmations. Normal confirmation should cost around 0.00093 ($14.96 at the time of my transfer) and should take 30 minutes (3 times as long). Then economic confirmation is down to 0.00063 ($10.16 at the time of my transfer) and takes about 2 hours (12 times as long as priority). Finally there is low-priority confirmation which 0.0000267 ($0.42 at the time of my transfer) and you can expect 3+ hours (over 18 times as long as priority).
Sixth, if the miners don't like the fee you are offering to pay or for what ever reason they don't think your transaction is important enough to process, they simply won't process it. The simple fact that any transaction could be started, sent and then rejected without any way for the funds to be returned to the originator is rediculous. Any sort of REAL banking system would either accept the transaction or reject it instantly. No REAL banking system would let you send funds and then MAYBE deliver them but never tell you one way or the other if they actually got where they were intended to go.
Seventh and finally, it is not secure. Bitcoins have gone missing in the past and just the other day a hacker got off with around $70,000,000 worth of Bitcoin. And if you for any reason lose access to your wallet, your money in it is gone. If you keep your Bitcoin online with a service, you are at their mercy. There is little to stop them from taking it or limiting how much you can cash out.
If you got into Bitcoin way back when it was cheap, you would be in good shape right now, if you can sell it. Or if you don't mind all of it at risk, hold on to it and see how crazy high this price will go. But honestly, I see a crash coming because of all the fake value hikes that are happening.
In short, if you put real money into Bitcoin or any cryptocurrency, be ready to lose it all. It is not safe. It only has value if the price keeps going up. It is totally unstable. And it will never replace government controlled banks or institutionalized credit cards because when things to wrong, there is no one to help your or protect your money. You are on your own.
Here are a few YouTube videos that you may enjoy on this subject: