Fiat is Effective: fiat for the crypto crowd [pdf]
Some of these arguments assume a single fixed-supply cryptocurrency, instead of the ecosystem of cryptocurrencies we actually have, which is more like Hayek&#x27;s proposal for competing privately-issued currencies. He thought it would be stable without the need for active management.<p>As a <i>payment system</i> I think cryptocurrency is vastly better; the more I use my hardware wallet, the more I&#x27;m horrified by legacy systems that work by giving vendors the ability to withdraw as much as they want. It&#x27;s a fundamentally insecure system, made sort of workable by layers of hacky mitigations.<p>In theory, fiat payment could use a hardware wallet that gives vendors the ability to withdraw only as much as specified in a signed transaction. I doubt that&#x27;ll happen unless crypto is successful enough to drag fiat providers kicking and screaming; in the meantime we could use fiat-backed tokens on a blockchain if governments didn&#x27;t make that near-impossible with AML&#x2F;KYC laws.<p>Reversibility could also be implemented in a token smart contract, if the market really does value that enough to put a central admin in control. So far that doesn&#x27;t appear to be the case, but maybe just because that market segment hasn&#x27;t been reached yet.