10 Decentralized Cryptocurrencies to Use as Cash Instead of CBDCs
Kristalina Georgieva, the Managing Director of the International Monetary Fund (IMF), spoke at the Singapore FinTech Festival 2023 on November 15. During her speech, she mentioned that Central Bank Digital Currencies (CBDCs) have the potential to replace cash in our society. Georgieva emphasized that CBDCs could offer resilience in more advanced economies and improve financial inclusion where few hold bank accounts.
“However, for those opposed to using CBDCs, several decentralized cryptocurrencies could serve as alternatives.”
— Kristalina Georgieva
Some individuals are skeptical about using a CBDC due to its highly controlled and centralized nature. To explore alternatives, Finbold asked ChatGPT-4 to mention 10 decentralized cryptocurrencies to use as cash instead of the rise of central banks’ digital currencies. In the prompt, we also asked GPT-4 to pick 3 out of the 10 and justify its pick in a brief paragraph.
The 10 Cryptocurrencies
Interestingly, the API used for this research is a Telegram bot that allows direct payments for each ChatGPT prompt. This ‘pay-per-use’ tool accepts multiple cryptocurrencies as cash and uses one of its picks, Nano (XNO), as the unit of accounting. The AI provided the following output and list:
- Bitcoin (BTC)
- Litecoin (LTC)
- Monero (XMR)
- Dash (DASH)
- ZCash (ZCH)
- Bitcoin Cash (BCH)
- Decred (DCR)
- Nano (XNO)
- DigiByte (DGB)
- PIVX (PIVX)
Bitcoin (BTC)
“Bitcoin is the first and most well-known cryptocurrency, often referred to as digital gold. Its wide adoption, strong security through its proof-of-work consensus mechanism, and the vast network of users and merchants make it a primary candidate for replacing cash for those seeking a decentralized option.”
— ChatGPT-4
Litecoin (LTC)
“Designed as the silver to Bitcoin’s gold, Litecoin offers faster transaction times and lower fees, making it an efficient medium of exchange for everyday transactions. Its longer track record and technological stability could gain the trust of users looking for cash alternatives.”
— ChatGPT-4
Monero (XMR)
“Monero’s focus on privacy and anonymity positions it as a strong contender for cash replacement. It uses sophisticated cryptographic techniques to obfuscate transaction details, which can appeal to users prioritizing financial privacy similar to that provided by cash transactions.”
— ChatGPT-4
The IMF stated that 11 countries have already adopted CBDCs as of June 2023, while 100 countries are exploring their own solutions. Despite this growing adoption trend, decentralized cryptocurrencies are facing a harsh regulatory environment, which hinders their growth as competitive tools for cash worldwide.
Hot Take: The Future Role of CBDCs vs Decentralized Cryptocurrencies
The future landscape might see a shift towards Central Bank Digital Currencies with growing global adoption. However, decentralized cryptocurrencies like Bitcoin, Litecoin, and Monero offer strong alternatives with their established networks and features catering to users seeking financial privacy and decentralization.
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